Xcel Energy Heat Pump Rebates & Incentives (2026)
Xcel Energy serves customers in eight states, but its heat pump rebates depend entirely on which one you're in. Colorado pays up to $2,250 per heating ton for cold-climate systems, Minnesota pays up to $2,000 per system plus a $600 insulation bundle bonus, New Mexico offers installer-quoted rebates, and the other five states have no standalone Xcel rebate — Wisconsin customers use the statewide Focus on Energy program instead. This guide covers all major Xcel Energy heat pump incentives available in 2026, including the Colorado and Minnesota rebate programs, the New Mexico installer program, and territory-by-territory availability. Here's what's actually available.
Last verified: July 14, 2026
Rates and program availability may change after this date.
✓ Open — rebates available in 3 of 8 Xcel states
Heat pump rebates are open in Minnesota (program cycle through 2026), Colorado (installations through Dec. 31, 2026, applications through Sept. 30, 2027), and New Mexico (installer-administered). Colorado funding is first-come, first-served until the amount approved by the Public Utilities Commission is expended.
The Short Version
✓ Colorado: up to $2,250 per heating ton
Cold-climate heat pumps earn $2,250/heating ton at 5°F with the bonus (fuel-burning system required) or $750/ton standard. A typical 3-ton cold-climate system reaches ~$6,750 at the bonus tier.
✓ Minnesota: up to $2,000 per system
Cold-climate ASHPs earn $2,000 for combined or gas-only customers ($1,500 electric-only), with a $600 bonus for pairing insulation and air sealing with the heat pump.
✓ From Xcel alone: ~$2,600 in MN, ~$6,750 in CO
Before stacking any state programs: Minnesota reaches ~$2,600 with the bundle bonus, and a Colorado 3-ton cold-climate system reaches ~$6,750 at the bonus tier. State and HEAR programs may stack on top, subject to each program's rules — see the state guides.
✗ Federal tax credits ended
The Section 25C and Section 25D federal tax credits expired Dec. 31, 2025. There is no federal heat pump tax credit for 2026 installations.
⚠ Your rebate depends entirely on your state
Xcel offers heat pump purchase rebates in only 3 of its 8 states. Wisconsin customers use Focus on Energy instead. North Dakota, South Dakota, Texas, and Michigan customers have no Xcel heat pump rebate, and New Mexico amounts are quoted by participating installers rather than published.
Where Xcel Heat Pump Rebates Apply
Xcel Energy serves customers in eight states. Heat pump purchase rebates are available in three of them: Colorado, Minnesota, and New Mexico. Every territory is listed below so you can see exactly where your address stands.
| State | Heat pump rebate? | What's there |
|---|---|---|
| Colorado | Yes | $750–$2,250/heating ton by tier; income-qualified support up to full cost |
| Minnesota | Yes | $1,100–$2,000 per system by equipment and customer type |
| New Mexico | Yes | Installer-quoted amounts; electric customers only |
| Wisconsin | Via Focus on Energy | No standalone Xcel rebate; statewide program applies |
| North Dakota | No | Reduced electric heating rate covers heat pumps; no purchase rebate |
| South Dakota | No | Reduced electric heating rate covers heat pumps; no purchase rebate |
| Texas | No | Efficiency-services program and demand-response credits only |
| Michigan | No | Efficiency rebates route through statewide Efficiency United |
Why the same heat pump earns different rebates
Xcel Energy is one company, but each state's efficiency program is approved by that state's regulators and funded by that state's ratepayers. Colorado pays per heating ton of cold-weather capacity; Minnesota pays flat amounts per system. Identical equipment can earn $2,000 in Minneapolis and roughly $6,750 in Denver.
Rebate Details by State
Colorado
Colorado rebates are paid per ton under the 2025–2026 summary effective Nov. 16, 2025. Every heat pump measure has two tiers: a standard rebate available to Xcel electric or gas customers, and a bonus tier — roughly triple — for homes with a fuel-burning heating system. Invoices and installations must be completed by Dec. 31, 2026, with applications accepted through Sept. 30, 2027.
| Equipment | With bonus | Standard |
|---|---|---|
| Cold-climate ASHP (ducted, non-ducted, or mixed) | $2,250/heating ton at 5°F | $750/heating ton at 5°F |
| Standard ASHP | $900/cooling ton at 95°F | $300/cooling ton at 95°F |
| Ground source heat pump | $3,300/heating ton | $1,100/heating ton |
| Heat pump water heater | $2,250 | $750 |
⚠ Common mistake: assuming every home gets $2,250/ton
The bonus tier requires a fuel-burning heating system. Effective Nov. 16, 2025, homes with existing electric heating (baseboard, for example) no longer qualify for bonuses on heat pumps or heat pump water heaters — they receive the standard tier of $750 per heating ton.
Colorado also offers the $600 insulation-before-heat-pump bundle bonus, a 25% Whole Home Efficiency bonus on standard rebates when three or more qualifying measures are completed within two years, home energy audit rebates of $100–$200, and income-qualified Home Energy Squad support that can cover 50–100% of upgrade costs for eligible households. Gas furnace and boiler rebates were removed effective Jan. 1, 2026. Full state-level stacking is covered in the Colorado heat pump guide.
Minnesota
Minnesota rebates run under Xcel's 2024–2026 program cycle. Amounts depend on the equipment and on your customer type: homes with Xcel gas service (or both gas and electric) earn the higher tier, while electric-only customers earn a reduced tier on ducted systems. Applications must be postmarked by September 30 of the year following installation.
| Equipment | Key requirements | Rebate |
|---|---|---|
| Cold-climate ASHP (ducted) | 15.2 SEER2, 10 EER2, 8.1 HSPF2; COP ≥ 1.75 at 5°F; NEEP-listed | $2,000 combo/gas · $1,500 electric-only |
| Standard ASHP (ducted) | 15.2 SEER2, 9.6 EER2, 7.8 HSPF2; quality installation | $1,600 combo/gas · $1,100 electric-only |
| Cold-climate mini-split | 16 SEER2, 9 EER2, 9.5 HSPF2; COP ≥ 1.75 at 5°F | $2,000 |
| Standard mini-split | 15.2 SEER2, 9.3 EER2, 8.5 HSPF2 | $1,600 |
| Ground source heat pump | 16 EER2, 3.3 COP; quality installation | $500/heating ton |
| Heat pump water heater | ENERGY STAR rated | $400–$500 |
Minnesota adds a $600 bonus when qualifying insulation and air sealing are installed before a rebate-qualifying heat pump, within two years of each other. Mini-splits can be self-installed and still qualify. Customers using a heat pump as their primary heat source are also eligible for a reduced electric space-heating rate. Full state-level stacking is covered in the Minnesota heat pump guide.
New Mexico
Xcel's New Mexico territory (served by its Southwestern Public Service subsidiary) offers heat pump rebates to residential electric customers, but the program works differently: it is fully installer-administered. A participating installer quotes your rebate, handles the installation, and submits the application on your behalf. Xcel does not publish New Mexico rebate amounts — its own page directs customers to verify the amount with an Xcel-approved installer, so get the figure in writing before you sign. The current participating installer list is on Xcel's New Mexico heat pumps page. A reduced electric space-heating rate is also available. A dedicated New Mexico state guide is coming soon.
✓ Best positioned for Xcel rebates
Gas-heated Colorado homes replacing a furnace or boiler capture the full bonus tier, and Minnesota customers with both Xcel gas and electric service capture the top flat rebates. In both states, pairing insulation work with the heat pump adds the $600 bundle bonus.
Equipment Requirements
Both Minnesota and Colorado use the same cold-climate definition: a heating COP of at least 1.75 at 5°F, heating capacity at 5°F of at least 70% of the 47°F rated capacity, and a listing on the NEEP cold-climate heat pump directory (ashp.neep.org). SEER2, EER2, and HSPF2 minimums vary by state and by ducted versus non-ducted configuration — see the tables above. Equipment generally must appear in the AHRI directory, ducted systems in Minnesota require quality installation, and rebates are paid per outdoor unit, not per indoor head. Rebates cannot exceed installed cost, and eligibility is limited to single-family homes, duplexes, and four-plexes.
Federal Tax Credits Have Ended
The federal Section 25C credit (up to $2,000 for heat pumps) and Section 25D credit (30% for geothermal) both expired on Dec. 31, 2025. Xcel's utility rebates are now the largest incentives available to most of its customers, alongside state programs. See what the federal expiration means for your project.
What Xcel Rebates Add Up To
Xcel rebates are utility incentives, which means separate state programs — and, where open, income-based HEAR rebates — may stack on top of them, subject to each program's current rules and any total-incentive caps. The scenarios below show what Xcel itself pays; your full stack depends on your state's programs, covered in the state guides.
Minnesota — cold-climate ducted ASHP, combo customer
- Cold-climate ASHP rebate: $2,000
- Insulation + air sealing bundle bonus: $600
- Reduced electric space-heating rate: ongoing bill savings
Realistic maximum from Xcel: ~$2,600
Colorado — 3-ton cold-climate ASHP, gas-heated home
- Bonus-tier rebate: 3 heating tons × $2,250 = $6,750
- Insulation bundle bonus (if paired): $600
- Income-qualified households: Home Energy Squad support can reach 50–100% of upgrade costs
Realistic maximum from Xcel: ~$7,350 (income-qualified: up to full cost)
New Mexico — installer-quoted rebate
- Amounts are not published — the participating installer quotes and files your rebate
- Get the rebate figure in writing on the project quote
Realistic maximum: quoted per project
What Xcel actually covers
Depending on your state, equipment, and tier, Xcel pays anywhere from a few hundred dollars for standard-tier equipment to ~$7,350 for a bonus-tier Colorado cold-climate system with the insulation bundle — before counting any state or HEAR programs, which may stack subject to their own rules and caps. Your final out-of-pocket cost depends on that state-level stacking: see the Colorado and Minnesota guides for the full math.
Xcel does not offer a 0% heat pump loan program, and the federal 25C/25D credits ended Dec. 31, 2025.
How to Apply
Confirm your state's program
Check the territory table above. Rebates, tiers, and deadlines are set per state — Minnesota, Colorado, and New Mexico each run different programs.
Get a quote from a participating contractor
Use Xcel's Trade Partner Network in Minnesota and Colorado, or a participating installer in New Mexico (where the installer is required). Mini-splits in Minnesota and Colorado can be self-installed and still qualify. Have the quote list your rebate amounts.
Install and keep your documentation
Keep dated invoices and the AHRI certificate for your equipment. Rebates cannot exceed installed cost, and invoices must precisely match the application.
Submit before the deadline
Your contractor typically files for you, or use Xcel's digital application for DIY installs. Minnesota applications are due by Sept. 30 of the year after installation; Colorado installations must be completed by Dec. 31, 2026, with applications accepted through Sept. 30, 2027; New Mexico installers submit on your behalf.
What to Watch
Colorado funding is first-come, first-served
Xcel's own rebate summary states rebates are available until the funding approved by the Public Utilities Commission is expended or the program is discontinued. Confirm availability before signing a contract.
Minnesota's program cycle runs through 2026
Current amounts come from Xcel's 2024–2026 rebate summary. Rebate levels for the next program cycle have not been published, so installations planned for 2027 should not assume today's amounts.
New Mexico amounts are unpublished
Xcel directs New Mexico customers to verify rebate amounts with a participating installer. Get the figure in writing — and if Xcel publishes amounts later, this page will be updated.
IRA funding runway for stacked rebates
State-administered HEAR rebates that may stack with Xcel's (such as Colorado's income-based rebates) draw on finite federal IRA allocations. Check your state guide for current funding status before counting on the stack.
Frequently Asked Questions
What heat pump rebates does Xcel Energy offer in 2026?
Xcel Energy offers residential heat pump rebates in three of its eight states. Colorado pays $750 per heating ton standard, or $2,250 per heating ton with the bonus for homes with a fuel-burning system. Minnesota pays up to $2,000 per cold-climate system ($1,500 for electric-only customers), plus a $600 insulation bundle bonus. New Mexico offers rebates through participating installers, with amounts quoted by the installer rather than published. Xcel customers in Wisconsin use the statewide Focus on Energy program instead, and there is no Xcel heat pump purchase rebate in North Dakota, South Dakota, Texas, or Michigan.
Can I stack Xcel heat pump rebates with state or federal programs?
Often, yes — but not automatically. Xcel rebates are utility incentives and may stack with separate state-run programs such as Colorado's state incentives and income-based HEAR rebates, and with Minnesota state programs. The federal Section 25C and 25D tax credits ended December 31, 2025, so those no longer stack for new installations. Check the stacking rules on your state's incentive guide, since some programs cap total incentives at a percentage of project cost.
Why does Xcel pay $2,250 per ton in Colorado but a flat $2,000 in Minnesota?
Xcel Energy is one company, but its efficiency programs are separate state programs approved by each state's regulators and funded by each state's ratepayers. Colorado's program is structured per heating ton of capacity at 5 degrees F, while Minnesota's pays a flat amount per system under its 2024-2026 program cycle. The same heat pump model can earn very different rebates depending on which Xcel state it is installed in.
Does Xcel offer heat pump rebates in Texas, North Dakota, South Dakota, or Michigan?
No. Xcel's own pages for those states show no heat pump purchase rebate. North Dakota and South Dakota customers whose primary heat source is an electric heat pump can enroll in a reduced electric space-heating rate by phone. Texas offers a general efficiency-services program and demand-response bill credits. Michigan Xcel customers access efficiency rebates through the statewide Efficiency United program rather than through Xcel directly.
What counts as a cold-climate heat pump for Xcel rebates?
In both Minnesota and Colorado, a cold-climate heat pump must have a heating COP of at least 1.75 at 5 degrees F, must retain at least 70 percent of its 47-degree rated heating capacity at 5 degrees F, and must appear on the NEEP cold-climate heat pump directory (ashp.neep.org). SEER2, EER2, and HSPF2 minimums also apply and differ slightly by state and by ducted versus non-ducted configuration.
Sources
- Xcel Energy — Minnesota 2024–2026 Rebate Summary (PDF)
- Xcel Energy — MN Residential HVAC Rebate Application 24-01-506 (PDF)
- Xcel Energy — Colorado Heat Pumps (rebate page + 2025–2026 Rebate Summary 25-10-417)
- Xcel Energy — Minnesota Heat Pumps
- Xcel Energy — New Mexico Heat Pumps
- Xcel Energy — North Dakota Home Rebates
- Xcel Energy — South Dakota Home Rebates
- Xcel Energy — Texas Home Rebates
- Xcel Energy — Michigan Home Rebates
- Efficiency United (Michigan statewide program; Xcel is a participating utility)
- Focus on Energy (Wisconsin statewide program)
Disclaimer: This page covers the main Xcel Energy residential heat pump rebates available in Minnesota, Colorado, and New Mexico in 2026, and the absence of such rebates in Xcel's other territories. It does not calculate savings, guarantee eligibility, or represent Xcel Energy or any incentive program. Rebate amounts vary with equipment capacity and customer type, and Colorado funding is first-come, first-served. We verify status regularly but programs can change without notice. Always confirm current amounts and eligibility with Xcel Energy and your contractor before making decisions.