If you’re interested in upgrading to a cold-climate air-source heat pump, by now, you’ve gained an understanding of heat pump technology and how it efficiently warms and cools your home year-round. But what about the cost of purchase and installation? It’s a fair question. Answering it requires considering a number of important variables.
What you pay largely depends on two things:
- The size of the system your home requires
- The incentives you’re qualified to claim
By separating and then examining the two, you can ensure a relevant range of costs that is easier to understand.
Equipment cost
System size is the biggest driver of upfront cost. Many homes call for a unit falling into one of three common sizes:
| Size of system | Estimated cost |
|---|---|
| 2-ton system | $12,000 to $16,000 cost on average |
| 3-ton system | $18,000 to $24,000 cost on average |
| 4-ton system | $24,000 to $30,000 cost on average |
Note that the above figures include equipment and standard installation. They don’t include optional work like upgrades you may need to your electrical panel or ductwork. If this “sticker price” feels intimidating, it’s important to understand that it’s rarely the number people pay.
Available rebates
Savings through rebates and tax credits play a major role in reducing the amount of money most homeowners end up paying. Incentives can come from multiple sources, like local utilities, municipal and state energy programs, and tax credits. The amount you receive depends on factors like income, the type of equipment you’re installing—even the equipment you’re replacing. It’s no wonder two households can end up with very different out-of-pocket costs.
Average cost after rebates
Of the heat pumps in the table above, the most common size is the 3-ton system. For a homeowner installing a 3-ton cold-climate air-source heat pump:
- Installed cost: $18,000 to $24,000
- Available incentives: $1,800 to $17,000
- Out-of-pocket: $1,000 to $22,200
Rebate “stackability”
It’s important to note that many heat pump incentives are stackable. Don’t leave money on the table! Savings add up, increasing affordability and accessibility for Colorado residents.
And remember, income-qualified parties have access to expanded rebates. Be sure to measure your household income against your locale’s area median income (AMI) to see if you're eligible for additional financial help.
79% AMI household in Golden
3-ton cold-climate air-source heat pump replacing electric heating
| Incentive | Amount |
|---|---|
| Xcel heat pump rebate | $2,250 |
| City of Golden sustainability | $4,000 |
| Power Ahead Colorado heat pump rebate | $1,500 |
| Colorado heat pump tax credit | $333 |
| Total Savings | $8,083 |
100% AMI household in Longmont
4-ton cold-climate air-source heat pump replacing gas furnace
| Incentive | Amount |
|---|---|
| Efficiency Works heat pump rebate | $2,000 |
| Boulder County income-qualified rebate | $2,000 |
| Power Ahead Colorado heat pump rebate | $1,500 |
| Colorado heat pump tax credit | $333 |
|
Total Savings |
$5,833 |
Reach out
If you'd like to discuss costs and incentives as they relate to your own needs, geographic location, and income level, our team is ready to help with valuable personalized guidance.
Reach out to a Power Ahead Colorado energy advisor at 1-844-303-9333 or info@advising.poweraheadcolorado.org.
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