The Real Deal on Home Electrification Rebates
Converting to heat pumps and an electric vehicle might be the two best things you can do right now for the planet’s climate emergency. The bottom line is: use less gas if you can. Gas is a fossil fuel that needs to be combusted to produce energy, and that combustion emits dangerous carbon into the atmosphere. Alternatively, if you can switch to electric power for your heating & cooling plus your driving, a lot of that electricity comes from renewable sources like solar, wind, and hydroelectric, which do not need to be burned to derive energy. Did you know that Boulder County’s electricity is nearly 50% from renewable sources?
The good news: since switching to electric is such a big deal, there are a ton of rebates and incentives out there to make conversion more affordable. Here’s a breakdown:
Heat Pumps
Federal
A new tax credit, the Energy Efficient Home Improvement Credit, was created for heat pumps as part of the Inflation Reduction Act, beginning January 1st, 2023. For most households, this works just like the Solar & Battery tax credit: 30% of a heat pump installation project cost can be deducted from your taxes. HOWEVER, unlike solar, there is an annual limit to this of $2,000 for most households. Low income households can get a higher annual limit – up to $8,000 – but few households will qualify for this.
How it works:
Complete your heat pump project and pay your full invoice. You can enter 30% of that invoice amount on IRS Form 5695 up to $2,000 the next time you file your taxes. If you have income and therefore owe taxes on that income, this amount will be reduced from the total taxes you owe. If income taxes are regularly taken out of your paycheck, you will likely receive a tax refund resulting from this credit.
Colorado
Colorado also created a new tax credit for heat pump installations, starting January 1st 2023, for 10% of the cost of heat pump equipment.
How it works:
Colorado has not yet shared the details of how to get this credit and we’re all waiting in suspense. Our best guess is that this will work very similarly to the federal tax credit. Complete your heat pump project and pay your full invoice. Ask your contractor to break out your invoice by labor and materials. Take 10% of the materials cost, and enter that amount into your Colorado tax return. If you have income in Colorado and therefore owe taxes on that income, this amount will be reduced from the total taxes you owe.
Montana
No special state incentives exist yet in Montana, though several have been proposed. We’re crossing our fingers that Montana gets on board by offering a tax credit and we think this will happen eventually!
Xcel Energy
If you live in Denver or Boulder, most likely your utility provider is Xcel Energy. They are also offering an incentive on heat pumps: a cash rebate up to $2,200.
How it works:
This all needs to go through your contractor. First, look up heat pump installer contractors (we’re one of them!) on Xcel’s approved contractor list: https://hvacree.net/xcel-co/public_search_proc.cfm. You will need to ask your contractor to apply for this rebate on your behalf and they will send you a form to sign. After your heat pump installation, your contractor will complete the application and you can expect to receive a check from Xcel in 8 to 10 weeks.
Poudre Valley Rural Electric
Fort Collins customers who get their electricity from Poudre Valley REA can get up to $2,800 in a cash rebate on heat pumps.
How it works:
After your installation, apply for your rebate here: https://poudrevalleyrea.formstack.com/forms/heat_pump_rebate_form. You will need to ask for the following from your installer: An invoice, commissioning form, AHRI Certificate, and Manufacturer Spec Sheets.
United Power
Denver customers who get their electricity from United Power can get up to $600 in a cash rebate on heat pumps.
How it works:
After your installation, apply for your rebate here: https://www.unitedpower.com/form/home-efficiency-rebate-2022.
NorthWestern Energy
Montana NorthWestern Energy customers can get a cash rebate on heat pumps of $125/ton (a typical home requires 3-5 tons of heating capacity).
How it works:
Work with your contract to fill out this form: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://northwesternenergy.com/docs/default-source/default-document-library/billing-and-payment/e-programs/e-rebate-electric-existing-home.pdf
Boulder County & City of Boulder
Residents in Boulder County can get $300 in cash rebates for a heat pump installation. Likewise, if you also live in the City of Boulder, you can get an additional $400 cash rebate.
How it works:
You must apply for these BEFORE your heat pump is installed. Apply here: https://energysmartyes.com/rebates-financing/
City of Denver
City of Denver residents are eligible for a cash rebate for 40% of the cost of your heat pump installation, up to $3,500.
How it works:
Your contractor will need to be registered with the City of Denver rebates program (we are!) and will apply for your rebates on your behalf.
EV Chargers
Federal
Just like with Heat Pumps, the Energy Efficient Home Improvement Credit allows you to get a tax credit of 30% of an EV charger installation project cost. This includes either hard-wired EV Charging Stations or an outlet installed to support your plug-in EV Charger, which typically comes with an Electric Vehicle purchase. There is an annual limit to this of $1,000 for most households. Low income households can get a higher tax credit and higher annual limit but few households will qualify for this.
How it works:
Complete your EV Charger project and pay your full invoice. You can enter 30% of that invoice amount on IRS Form 5695 up to $1,000 the next time you file your taxes. If you have income and therefore owe taxes on that income, this amount will be reduced from the total taxes you owe. If income taxes are regularly taken out of your paycheck, you will likely receive a tax refund resulting from this credit.
Xcel
Xcel offers a $500 “Home Wiring” rebate for most households and $1,300 rebate for income qualified households on installations of EV Chargers.
How it works:
Because nothing is simple with Xcel, you need to apply in 2 steps. First, you need to enroll in their “Optimize Your Energy” program which signs you up for time of use billing adjustments, essentially charging you more to use electricity during peak daytime hours: https://ev.xcelenergy.com/optimize-your-charge. Second, you an apply for your rebate by filling out the rebate form and sending it in via email or snail mail: https://www.xcelenergy.com/staticfiles/xe-responsive/Marketing/21-07-530_CO-EV-HomeWiring_app_P03.pdf
City of Denver
City of Denver residents are eligible for a cash rebate for 80% of the cost of your EV charger installation, up to $1,000. That almost covers the whole thing!
How it works:
Your contractor will need to be registered with the City of Denver rebates program (we are!) and will apply for your rebates on your behalf.
City of Longmont
If you are a resident of the City of Longmont, you can get a rebate of $500 for your EV Charger installation. One note – your project must be permitted.
How it works:
After you’ve completed your installation, passed inspection, and paid your invoice the installer, you can fill out this online form to submit for your rebate: https://cityoflongmont.wufoo.com/forms/r1c5pvtr0obvo08/
Service Panel Upgrades
Your service panel (aka electrical panel aka breaker box) was probably installed when your house was built and hasn’t been upgraded in a while. If your panel is rated for less than 200 Amps, adding all these modern electrical appliances, while great for reducing home pollution, may overload your panel and cause tripping breakers or even overheated wires. Not great. Upgrading your service panel to 200A is a bit of an inevitability. The good news is, there are rebates for that, too!
Federal
Under the Energy Efficient Home Improvement Credit, you can get a tax credit of 30% of your service panel upgrade up to $600. Low income households can get a higher annual limit – up to $8,000 – but few households will qualify for this.
How it works:
Complete your service panel upgrade project and pay your full invoice. You can enter 30% of that invoice amount on IRS Form 5695 up to $600 the next time you file your taxes. If you have income and therefore owe taxes on that income, this amount will be reduced from the total taxes you owe. If income taxes are regularly taken out of your paycheck, you will likely receive a tax refund resulting from this credit.
City of Denver
City of Denver residents are eligible for a cash rebate for 80% of the cost of your service panel upgrade, up to $2,000. That almost covers the whole thing!
How it works:
Your contractor will need to be registered with the City of Denver rebates program (we are!) and will apply for your rebates on your behalf.
Wow, that was a lot. We know this is complicated and we’re happy to help! Please reach out to sales@solarips.com to get your rebate questions answered and your home electrification project started!