Power Ahead Colorado, a program of the Denver Regional Council of Governments, is offering a $1,500 rebate for qualifying cold-climate heat pumps and free energy advice to homeowners and businesses across the metro Denver area.

The rebates apply to ENERGY STAR-rated equipment installed by verified Power Ahead Colorado contractors and can be combined with other available incentives, according to a press release. Energy advisers are available by phone or email to help residents plan projects and maximize savings.

“We know the decision to switch to a heat pump can feel like a big one,” said Mac Prather, Power Ahead Colorado Rebates and Incentives manager, in the release. “By lowering the upfront cost of a heat pump and by offering free energy advising, we want to make this decision as easy as possible for homeowners and businesses with aging heating and cooling systems.”

Over the next four years, Power Ahead Colorado plans to invest $40 million in incentives to make energy upgrades more affordable.

“When it comes to heating and cooling, customers want options that are both practical and cost-effective,” said Emmett Romine, vice president of customer energy solutions at Xcel Energy, in a statement. “We’re excited to see Power Ahead Colorado launch a heat pump rebate that, when combined with Xcel Energy rebates and others, helps make upgrading to a heat pump more affordable.”

In its program launch materials, the Denver Regional Council of Governments estimates that before rebates and incentives, average installed costs for cold-climate heat pump systems in the Denver area generally range from $12,000 to $30,000, depending on home size and system needs.

Officials highlight that the new $1,500 Power Ahead Colorado rebate can be stacked with Xcel Energy incentives that can significantly lower out-of-pocket costs by thousands of dollars.

According to local installer data from UniColorado, a Denver-area HVAC and energy efficiency contractor/installer, gross installed costs for a cold-climate air-source heat pump system typically range from $8,500 to $25,000 or more, with many whole-home replacements falling in the $10,000-$18,000 range for a standard home.

After common rebates, out-of-pocket costs often land around $9,000-$15,000. UniColorado reports a median near $12,900 in recent Denver metro projects.

The Denver Regional Council of Governments (DRCOG) is a voluntary association of local governments founded in 1968 to coordinate regional planning on transportation, growth and development and related issues across 10 counties representing 3.3 million residents.

As the designated metropolitan planning organization for the Denver area, it facilitates collaboration on infrastructure, land use and environmental challenges that cross city and county lines, according to the release.

In recent years, the organization has expanded its focus on climate and air quality. Power Ahead Colorado is supported by a nearly $200 million federal Climate Pollution Reduction Grant awarded to DRCOG in 2024, one of the largest of its kind, aimed at reducing building-sector emissions.