Heat Pump ‘Triple Rebates’ in the Denver Metro Area Are Taking Off!
The national heat pump movement continues in the Denver Metro area as one of our major utility providers, Xcel Energy, announced on January 2nd of this year significantly higher rebates for a variety of high efficiency, residential heat pump products. Our team at Save Home Heat Company regularly installs many air source heat pumps (ASHP) that qualify for this program. Compared with recent years, the already substantial Xcel rebates for heat pumps have essentially been tripled – for just a limited time, this year.
In this post, our team at Save Home Heat will dive deeper into the details and qualifications for these valuable rebates, and we’ll also take a quick look at other heat pump rebates and incentives that may be able to save our customers even more money.
An Intro. to Xcel Energy Heat Pump Rebates
In this summary of Xcel’s current heat pump rebates, we’ll cover the two levels of qualifying central and mini-split heat pumps, as well as rebates for heat pump water heaters. We’ll break down their efficiency requirements and present the current rebate amounts available for these systems.
An important note regarding program timing: Xcel informed us in mid-January that these enhanced, ‘triple heat pump rebates’ will be available for approximately 8 to 12 months – so if your home is served by Xcel Energy in the Denver metro area, now’s an ideal time to get started if a heat pump may be in your plans for 2025.
Xcel Central & Mini-Split Heat Pump Rebates: Key Background
In this section, we’ll start diving into the key details of Xcel’s central and mini-split heat pump rebate program, including eligibility criteria and some important definitions.
‘Cold Climate’ vs. ‘Standard’ heat pump systems
As defined by Xcel Energy for their rebate program, a “Cold Climate” heat pump is designed to operate efficiently in colder temperatures than a “Standard” system can accommodate. Cold Climate systems provide full, efficient heating even when the outdoor temperature goes down to 5 degrees F. Partial heating continues as outdoor temperatures get even colder.
Cold Climate systems are an excellent fit for wintertime conditions in regions such as the Colorado Front Range. In comparison, the heating season limitations of Standard heat pumps become more noticeable the closer the outdoor temperature gets to freezing and below. Our team installs plenty of both systems, and we work closely with our customers to enable them to make informed purchasing decisions they feel good about.
What does ‘Quality Installation’ mean?
To qualify as a participating Quality Installation contractor for Xcel’s rebate program, contractors must register with Xcel and prove they follow “best practices” in several key areas. These include sealing ducts in central systems to minimize air leaks; performing precise heating and cooling load calculations in order to ensure the system is accurately sized for maximum efficiency and comfort; making sure the furnace or air handler blower is sized to do the job right, and doing the same for the ducting system; properly charging the system with the correct refrigerant; and fully testing the system.
Our team at Save Home Heat Company is certified as a Quality Installation HVAC contractor in Xcel’s rebate program.
Energy efficiency terms you should be familiar with
In all of the below cases, the higher the number, the more efficient the system is projected to perform:
- SEER2 (Seasonal Energy Efficiency Ratio 2) is a rating that measures the cooling efficiency of air conditioners and the cooling function of heat pumps. It helps you compare the overall performance of different brands and models of central and mini-split heat pumps. The “2” refers to updates made by the U.S. Department of Energy (DOE) in 2023. SEER2 ratings typically range from 14.0 SEER2 at the low end to 30.0+ SEER2 at the high end.
- EER2 (Energy Efficiency Ratio 2) is another efficiency measure that focuses on the cooling performance of a system – in this case, during peak demand conditions. EER2 ratings generally range from 9.5 EER2 to 12.0 EER2. Like SEER2, the “2” indicates changes instituted by the DOE in 2023.
- HSPF2 (Heating Seasonal Performance Factor 2) measures the heating efficiency of a heat pump over the course of the entire heating season. The HSPF2 measures how effectively the heat pump converts electricity into heat for your home. HSPF2 ratings usually range from 8.0 HSPF2 to over 13.0 HSPF2 (like the above, the “2” indicates the recent DOE updates).
Performance Criteria for Xcel’s Mini-Split & Central Heat Pump Rebate Program
Here’s a closer look at the guidelines setup by Xcel to differentiate Standard and Cold Climate heat pumps for their rebate program. The numbers below represent the minimum efficiency ratings that must be achieved in order for a system to qualify for a specific rebate level:
Standard air source heat pumps
- Standard Central Air Source Heat Pump (ASHP) with Quality Installation: 15.2 SEER2; 11.7 EER2; 7.8 HSPF2
- Standard Mini-Split ASHP: 15.2 SEER2: 11.5 EER2; 7.8 HSPF2
Cold Climate air source heat pumps
These units provide a higher rebate amount.
- Cold Climate Central ASHP with Quality Installation: 18.0 SEER; 11.7 EER2; 8.1 HSPF2
- Cold Climate Mini-Split ASHP: 18.0 SEER2; 11.5 EER2; 8.5 HSPF2
Central & Mini-Split Heat Pump Rebate $,$$$ Amounts from Xcel
According to their update earlier this year, the current, limited time, enhanced heat pump rebates from Xcel are as follows:
- Standard central or mini-split systems: $900 per cooling ton.
- Cold Climate central or mini-split systems: $2,250 per heating ton.
To help understand what the above rebate amounts could add up to, the heat pump systems that our team at Save Home Heat installs typically range from 2 to 5 tons in size. Here are a few examples of the potential rebates for some common size systems:
Standard systems:
- 3-ton system: $2,700
- 4-ton system: $3,600
- 5-ton system: $4,500
Cold Climate systems:
- 3-ton system: $6,750
- 4-ton system: $9,000
- 5-ton system: $11,250
Heat Pump Water Heater Rebates from Xcel
Xcel Energy also offers a $2,200 rebate for any qualifying heat pump water heater. In all cases, the heat pump water heater must be ENERGY STAR certified, but the criteria for this certification depends on the design of the heat pump water heater:
- Integrated Heat Pump Water Heaters: These units combine the heat pump and the water tank into a single, self-contained unit. ENERGY STAR certification requires that an integrated heat pump water heater have an efficiency rating of at least 3.3 UEF
- Split-System Heat Pump Water Heaters: As the name suggests, in this design the system is split into an outdoor condensing unit (similar in size to mini-split outdoor units) and an indoor storage tank. Split-system heat pump water heaters require an efficiency rating of at least 2.2 UEF to meet ENERGY STAR label requirements
Revisiting the UEF efficiency rating
Covering all bases in a layman fashion, the UEF (Uniform Energy Factor) number is the rating that allows you to compare the efficiency of many different types of water heaters, including standard electric and gas-fired tanks, power-vent units, tankless heaters, and heat pump water heaters, too. The higher the UEF, the more efficiently it operates according to DOE standards. The UEF rating typically ranges from .6 to .95 UEF for many types of gas and electric water heaters. However, due to their unique designs, heat pump water heaters – which, like all residential heat pumps, are electric powered – are unusual in that their UEF ratings are much higher, ranging between 2.0 and 4.0 UEF, with the more popular integrated units typically in the 3.0 to 4.0 UEF range. Please note: We recommend reading the next section very carefully.
UEF isn’t the end-all factor affecting water heater purchases
Make note, there are several other very important factors, such as recovery rates and FHR (first hour hot water rating) that go into the recommendations that our hot water team makes to our customers. The UEF rating is just one aspect and should not be considered the end-all criteria for a water heater purchasing decision. Our team routinely discusses all these factors with our customers during the initial fact-finding stage when providing an install quote. The bottom line: The water heater with the highest UEF rating isn’t always the best hot water solution for a family’s needs.
Combine Heat Pump Rebates from Lennox with Xcel Rebates for Greater Savings!
In addition to Xcel Energy rebates, our manufacturer partner Lennox Industries currently offers a range of valuable rebates on select high efficiency heating and cooling products that they build, including heat pumps. During the Spring 2025 Consumer Promotion period (thru early June), Lennox rebates on qualifying heating and cooling systems range as high as $2,000. There are individual equipment rebates and attractive financing options available from Lennox, as well.
Our team at Save Home Heat is very experienced at helping our customers combine Xcel and Lennox rebates to achieve truly impressive savings on their home comfort investments. Keep in mind that the Xcel triple heat pump rebates will probably be gone sometime this year, and there’s no telling if or when we’ll see them that high again – so now is the best time to get started!
Ask Your Tax Advisor About State and Federal Energy Efficiency Rebates & Tax Incentives
When starting the process, we suggest reaching out to your trusted tax adviser to inquire if there are other valuable incentives available from the state of Colorado or the IRS that can increase your savings even further. Of course, we can’t submit those papers for you, but we’re glad to help connect the dots on the equipment end of things.
All Rebate Submittals Are Handled by Our Team!
Our staff at Save Home Heat handles all rebate submissions and tracking for our customers—no forms to download or hoops to jump through on your end! If at any time you have questions or concerns about the process, our team is always glad to assist.
Interested in a Heat Pump System for Your Denver, Boulder, or Loveland Area Home?
All around the Metro Denver area, our team at Save Home Heat Company is glad to help homeowners make informed decisions about heating and cooling upgrades for their homes. Whether that means a new furnace, central AC, a heat pump system, central or mini-splits, or even a hot water boiler – in addition to reliable, efficient water heaters – our friendly comfort advisers are focused on listening closely to our customers and crafting recommendations and options that are the best fit for their specific circumstances.
Providing top-rated service for over 45 years, Save Home Heat is committed to providing our customers with efficient, reliable, durable products, and earning your trust and future business every time you give us the opportunity to serve you.
To receive a highly informative, low-pressure, free quote from one of our team, please contact our team today.
