Heat Pump Incentives Are Heating Up!
What is a heat pump? Will it work in Leadville? Is it the right choice for me? And how do I save 60% and get $12,000 back!?
💸 What’s Available?
Thinking about upgrading your home’s heating system? Now might be the perfect time! Xcel Energy has dramatically increased its rebates for heat pumps in 2025, committing over $850 million to its Clean Heat Plan & Demand Side Management Rebate Programs.
These new rebates, combined with state and federal tax credits, can save you up to $12,000 and cover more than 60% of the total costs of installing a new heat pump!
Current incentives for a cold-climate heat pump in Leadville include:
Xcel rebates of $2,250 per ton, for a total of $6,750–$9,000 for a typical home
30% Federal Tax Credit, up to $2,000
State Tax Credit of $1,500
Additional local incentives may be available—stay tuned for updates!
⌛ What’s the Rush?
With limited funding, Xcel plans to reassess these rebates in 8-12 months. Act now to upgrade your home and maximize your savings before funding runs out!
The Technology Behind Heat Pumps
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Heat pumps are a proven technology that have been used in homes commonly since the 1960s, but have seen huge improvements in design, efficiency, and cost in the last few years.
A heat pump works like an air conditioner in reverse. Rather than generating heat from burning fuel or using electricity, it moves existing heat from outside air into your home. While it may seem strange that it can pull warmth from sub-zero outside air, as long as temps are above absolute zero (-459º F !), there is still heat in the air that can be moved inside and provide you with reliable, cost-effective heating.
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Yes! While older heat pumps struggled in extreme cold, modern cold-climate heat pumps are designed to work efficiently — even in places like Leadville.
All heating systems (not just heat pumps) are designed to function optimally within a certain temperature range. Generally heating systems are not designed for coldest temps ever experienced - it wouldn’t be practical or be cost effective to design for those most extreme conditions.
Instead, systems are designed to operate effectively for 99% to 99.6% of expected conditions, meaning they are built to efficiently handle all but the coldest 1% to 0.4% of temperatures.
Based on AHSRAE Climate Design Conditions tool (the gold standard for designing heating systems), the 99.6% design temp in Leadville is -7.8ºF. Many parameters go into designing a heating system, including the size of the home, the insulation values, the desired indoor temperature, and many other factors. The 99.6% design temperature of -7.8 ºF means that standard design practice would be to size the heating system so that it would heat the house to the desired indoor temperature when the outdoor temperature is as low as -7.8 ºF, and when outdoor temperatures fall below this then indoor temperature might fall a few degrees lower than the indoor design temperature.
The popular Mitsubishi H2i heat pumps are even designed down to -13 ºF, well below Leadville’s 99% and even the 99.6% design temperatures! The -13 ºF rating on the Mitsubishi means that it will put out it’s full rated design power down to -13 ºF.
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The reality is that temperatures that low are pretty rare. In fact, Leadville averages less than three days per year where temperatures ever get below -13ºF.
But even if it DOES get that cold, your heat pump you’ll still be able to heat your house, just maybe not quite to the toasty temperatures you’d usually prefer.
Below -13º your heat pump won’t stop working altogether, it just wont be able to put out quite the same amount of heat.
Worst case scenario, this might mean that your home might briefly dip to around 60º on the coldest nights in Leadville.
Is a Heat Pump Right for Me?
There are many different scenarios where a heat pump may (or may not!) be a good investment in your home.
✅ If you have traditional electric heating and want to save $$$ on energy bills
If you use electric resistance heating like baseboards or in-floor radiant, heat pumps may be a great alternative for you. On average a heat pump in Leadville will be 2.5x more efficient than traditional electric heating, helping you cut costs by up to 60%.
✅ If you want to ditch expensive propane
If you heat with propane (which is 2-3x as costly as natural gas) switching to a heat pump could cut your heating costs by 50%.
Wall-mounted pumps can free up space.
✅ If you want to maximize interior space
Tired of a gas or pellet stove taking up valuable floor space in your home? With units that can be mounted on walls or ceilings, heat pumps can free up space in your home’s footprint. That said, they do require some exterior space (ideally protected from snow) for the outdoor unit.
✅ If you’re building a new construction
While current costs for natural gas and electricity may be comparable, available incentives can make a heat pump the more affordable upfront choice. Additionally, natural gas prices are typically more volatile than electricity, meaning long-term energy costs are riskier and could rise faster for gas users.
❓If you currently use a natural gas furnace or boiler
Most data shows that monthly costs are about the same between the two technologies, making it more difficult to predict any significant savings. But if your furnace or boiler is nearing the end of its lifespan, switching to a heat pump could make sense for the same reasons as for new construction—lower upfront costs with incentives and more stable long-term energy pricing.
I’m Interested. What’s Next?
An energy assessment can identify the most effective next steps for your home's unique needs.
💡Get a Home Energy Assessment
Before installing a heat pump, C4 recommends a home energy assessment to help you determine the best energy-saving upgrades for your home.
A $500 value, offered for just $50 through C4!
Get a customized list of recommended improvements and available rebates.
Identifies insulation & air-sealing upgrades to improve heat pump efficiency.
Support applying for and accessing available rebates and incentives.
Learn more and sign up today or email at energyaudits@c4leadville.org
*Even if you’ve already had a home energy assessment, please still reach out! We can connect you with contractors and incentives that may not have existed when you had the assessment completed.
🏡 Find a Qualified Installer
You can always talk directly to a heat pump installer and determine what a heat pump would cost and what design considerations you would need to take into account in your home. C4 has a list of qualified local contractors here.
📞 Reach out to C4!
Have questions? We’re here to help! Call, email, or stop by our offices to:
Discuss options for reducing your home’s energy usage and costs
Get unbiased advice about whether a heat pump might be the right choice for you
Schedule your home energy assessment
Connect with available rebates and qualified contractors