Colorado Home Energy Rebates

Quick Facts

• Program purpose: Deliver Inflation Reduction Act rebates that make it affordable for Coloradans to electrify homes, cut greenhouse gas emissions, and reduce energy burdens.
• Core components: HOMES whole-home performance incentives and High-Efficiency Electric Home Rebates (HEEHR) for appliance upgrades.
• Priority populations: Households in disproportionately impacted communities, tribal nations, mountain towns with high energy costs, and renters in affordable housing.
• Stackable support: Can be paired with Colorado’s existing tax credits, utility rebates, the state’s Heat Pump Tax Credit, and local climate initiatives.
• Readiness actions: Schedule energy audits, evaluate electric panel capacity, and assemble documentation so you can secure reservations quickly upon launch.

Program Overview

Colorado is tackling climate goals under HB21-1286 and the Greenhouse Gas Pollution Reduction Roadmap, both of which emphasize electrifying buildings. The Colorado Energy Office (CEO) is designing the Home Energy Rebates to integrate with initiatives like the High-Efficiency Electric Homes Grant, the Weatherization Assistance Program, and Energy Smart Colorado. By aligning funding streams, the state seeks to simplify customer journeys while targeting assistance to households with the highest energy burdens.

Colorado’s geography presents unique challenges—high altitude, cold winters, and a mix of urban and rural housing stock. The program will support cold-climate heat pumps, insulation upgrades for manufactured homes, and solar-plus-storage strategies in wildfire-prone areas. CEO is also coordinating with tribal governments to deliver culturally competent outreach and bilingual materials.

Eligibility Criteria

Property Types

• Single-family homes: Including detached houses, townhomes, and manufactured homes that are permanently installed and individually metered.
• Multifamily properties: Both small (2–4 units) and large (5+ units) buildings qualify. Larger properties may work through aggregator partners such as housing authorities or nonprofit developers.
• Rentals: Renters can access appliance rebates with landlord permission. Whole-building projects require owner participation and compliance with tenant protection policies.

Income Limits

• Low-income (≤80% AMI): Eligible for maximum rebates; CEO may offer pre-weatherization grants to address barriers like roof repair or knob-and-tube wiring.
• Moderate-income (≤150% AMI): Eligible for substantial rebates but may need to contribute 20–30% of project costs.
• Above 150% AMI: Can access HOMES rebates with lower incentive rates based on energy savings.

Contractor Participation

• Contractors must register with the state rebate portal, hold appropriate licenses, and complete cold-climate heat pump training. They must offer transparent pricing, warranty coverage, and adhere to consumer protection rules that prohibit aggressive sales tactics.

Technical Requirements

• Heat pumps must meet cold-climate performance standards (e.g., maintain heating capacity at 5°F). Manufacturers like Mitsubishi, Daikin, and Fujitsu have qualifying models.
• Projects must comply with local building codes and the 2021 IECC or local equivalents.
• HOMES measured savings pathways require utility bill data sharing; expect to sign consent forms.

Incentive Structure

HOMES Rebates

• Low-income households can receive up to $8,000 for 35%+ energy savings, $4,000 for 20–34% savings, and $2,000 for 15–19% savings.
• Moderate-income households may receive $4,000 for 35%+ savings and $2,000 for 20–34% savings.
• Higher-income households can access $2,000–$4,000 tiers based on savings, with per-square-foot or per-kWh incentive rates yet to be finalized.
• Multifamily projects calculate incentives per dwelling unit, with caps similar to single-family tiers.

HEEHR Appliance Rebates

• Up to $8,000 for cold-climate heat pump HVAC.
• $1,750 for heat pump water heaters.
• $840 for induction stoves and $500 for heat pump clothes dryers.
• $1,600 for weatherization bundles (insulation, air sealing, ventilation).
• $4,000 for electrical panel upgrades, including service upgrades needed for mountain communities with older infrastructure.
• Household cap is $14,000; multifamily per-unit cap is $8,000.

Bonus Incentives

• Additional funds for projects located in Disproportionately Impacted Communities as defined by SB21-264.
• Adders for pairing electrification with demand-response controls or battery storage that supports resilience during wildfires or grid outages.

Application Process

1. Energy assessment: Contact an Energy Smart Colorado partner, local utility, or private auditor to conduct a comprehensive assessment. Gather blower-door test results, insulation levels, and equipment inventory.
2. Project scoping: Prioritize measures that maximize savings. Consider simultaneous envelope upgrades and heat pump installations to reach higher HOMES tiers.
3. Contractor selection: Choose a participating contractor from the CEO directory. Request itemized bids specifying labor, materials, permits, and anticipated rebates.
4. Reservation submission: Contractors submit project details through the state portal, including household income documentation, proof of property ownership or lease, and estimated energy savings.
5. Income verification: Provide tax returns, pay stubs, or public benefit participation proof (e.g., LEAP, SNAP, WIC). Self-attestation may be allowed with random audits.
6. Installation: Ensure contractors pull permits and coordinate inspections. Take before-and-after photos, especially of panel upgrades and equipment nameplates.
7. Completion and rebate payment: Contractors or homeowners upload final invoices, commissioning reports, and permit closeout documents. Rebates may be issued as direct deposits or checks, with some measures delivered as instant discounts.

Documentation Checklist

• Energy audit report with baseline metrics.
• AHRI certificates for heat pumps and water heaters.
• Manual J/S calculations demonstrating proper sizing.
• Proof of income and residency.
• Utility data release forms for each adult on the account.
• Permits, inspection approvals, and compliance certificates.
• Photos of installations, removed fossil-fuel equipment, and panel upgrades.
• Lease agreements or tenant notifications for rental properties.

Coordination with Other Colorado Programs

• Heat Pump Tax Credit: Colorado offers a state tax credit for heat pump installations. Document rebate amounts to calculate tax credit eligibility on net costs.
• Utility rebates: Xcel Energy, Black Hills Energy, and municipal utilities provide rebates for heat pumps, insulation, and thermostats. Coordinate application timing to avoid missing deadlines.
• Weatherization Assistance Program: Low-income households can receive no-cost weatherization and may use IRA rebates for additional electrification measures.
• Rural Electric Associations (REAs): Many REAs offer on-bill financing and rebates. Contact your co-op to align benefits.
• Home Energy Scorecards: Colorado encourages use of the Home Energy Score to document improvements for property resale value.

Strategies for Mountain and Rural Communities

• Plan for cold-climate performance by choosing heat pumps rated for high-altitude operation.
• Address power reliability by considering battery storage eligible for resilience adders, especially in wildfire-evacuation zones.
• Utilize local workforce development programs like the Western Colorado Community College HVAC training to identify skilled contractors.
• For homes with propane heating, document fuel consumption to illustrate cost savings when switching to electricity.

Multifamily Considerations

• Aggregators such as housing authorities or energy service companies can bundle units to streamline applications.
• Tenants should be notified of construction timelines and provided temporary heating/cooling solutions if systems are offline.
• Landlords receiving rebates must comply with tenant protection requirements, potentially including rent increase caps or sharing utility savings.
• Data collection may include benchmarking via ENERGY STAR Portfolio Manager to track savings and qualify for performance bonuses.

Example Projects

• Denver Bungalow: A family earning 70% AMI replaces a gas furnace with a cold-climate heat pump, installs attic insulation, and upgrades to a 200-amp panel. With $8,000 HOMES rebates, $6,500 HEEHR rebates, and $2,000 utility incentives, their $27,000 project nets down to $10,500 before tax credits.
• Durango Manufactured Home: A retired couple adds skirting insulation, air sealing, and a ducted heat pump. CEO partners with a local nonprofit to provide pre-weatherization repairs. Rebates cover 95% of costs, enabling the couple to stay in their home despite rising propane prices.
• Boulder Multifamily Retrofit: A 12-unit building electrifies domestic hot water with central heat pump water heaters and adds rooftop solar. Aggregated HOMES incentives reach $96,000, while HEEHR rebates cover panel upgrades for each unit. Tenants sign income attestations, and the owner agrees to maintain affordable rents for ten years.

Tips for Successful Participation

• Start early: High demand will deplete funds quickly. Initiate assessments and contractor interviews well before the portal opens.
• Bundle measures: Combining insulation, air sealing, and electrification increases savings percentages and unlocks higher rebates.
• Monitor timelines: Reservations may expire after 180 days. Build realistic project schedules with contingency for permitting delays.
• Track expenditures: Maintain spreadsheets documenting costs, rebates, and tax credits to simplify tax filing and potential audits.
• Engage community resources: Organizations like Energy Outreach Colorado, GRID Alternatives, and local governments offer navigator services.
• Consider financing: Explore Colorado Clean Energy Fund loans, on-bill financing, or credit union energy loans to cover remaining costs.

Frequently Asked Questions

• When will applications open? CEO anticipates early 2025 after DOE approves program plans. Pilot projects may begin sooner in select communities.
• Can I receive rebates for DIY projects? Most measures require professional installation. Retailer-administered rebates may cover certain appliances if purchased through participating vendors.
• Do rebates apply to new construction? HOMES focuses on retrofits. Some electrification rebates may support new affordable housing if energy savings are compared to baseline code.
• How do rebates affect tax credits? Federal and state tax credits apply to net costs after rebates. Keep documentation showing rebates applied as line-item discounts.
• What if my contractor withdraws? Contact the CEO helpline immediately to transfer reservations to another participating contractor.

Additional Resources

• Colorado Energy Office – Home Energy Rebates
• Energy Smart Colorado
• Colorado Clean Energy Fund Financing
• Xcel Energy Residential Rebates
• Energy Outreach Colorado
• Colorado Heat Pump Tax Credit Information