Most Denver-area homes have a gas tank water heater, and a lot of what's online about water heater rebates doesn't apply to them anymore. This is what the programs themselves said in October 2026.
Replacing a gas or standard electric water heater
There's no Xcel Energy rebate for a gas tank, a gas tankless, or a standard electric tank water heater in 2026; Xcel's water heater rebates are only for heat pump units. The federal tax credit that used to help is gone too (more below). So for most replacements, the decision comes down to the right size, the right fit for the space, and how long the heater will last in your water.
Two things worth checking before you buy:
- Altitude rating (gas heaters). It varies by model. A.O. Smith says its ProLine atmospheric models are approved from sea level to 10,100 feet; Rheem says its Performance Plus atmospheric models are certified up to 6,000 feet, with some listed higher; Bradford White's Ultra Low NOx manual says those units are built for sea level to 2,000 feet unless the rating plate says otherwise. The rating plate on the heater is the final word (what to check at altitude).
- An expansion tank. Denver's code requires thermal expansion control when the cold supply runs through a check valve, a pressure-reducing valve, or a backflow preventer (when you need one).
What ended
The federal 25C energy efficient home improvement credit isn't allowed for anything placed in service after December 31, 2025, according to the IRS. Colorado's federally funded home energy rebate program (HEAR) is also closed for single-family homes in the Denver-area counties.
What's still available
| Program | What you get | Who qualifies |
|---|---|---|
| Xcel Energy, gas and standard water heaters | Nothing in 2026 | Xcel's water heater rebates are only for heat pump units |
| Federal 25C tax credit | Ended | Not allowed for anything placed in service after Dec. 31, 2025 |
| Boulder County EnergySmart | 50% of the cost, up to $2,000 a year; electric water heaters qualify | Income-qualified Boulder County households (at or below 100% of area median income), with preapproval |
| United Power | $100 for replacing a gas water heater with an electric one | United Power electric customers, in parts of the northern metro |
| Xcel Energy heat pump water heater rebate | $750, plus a limited-time bonus rebate Xcel lists at $1,500 | Xcel residential customers in Colorado, ENERGY STAR heat pump units only |
| Colorado heat pump tax credit | $250 per heat pump water heater in 2026, at least $83 to you | Claimed by a contractor registered with the Colorado Energy Office |
If you're looking at a heat pump water heater
Few Colorado homes have one, and they aren't a fit for every house: they need room around them, a drain for condensate, and usually a 240-volt circuit. If you're considering one anyway, Xcel's rebate doesn't require a registered contractor (it "can be self-install or by an independent contractor of the customer's choosing"), its application is due by September 30 of the year after installation, and Colorado's $250 credit only comes through a contractor registered with the Colorado Energy Office.
Whatever you choose, keep the receipt, the model and serial number, and the install date. When we replace a water heater, you get a receipt and photos of the finished job. Water heater repair and replacement →
Sources: Xcel Energy water heater rebates · Xcel Energy 2026 rebate summary · Colorado Energy Office heat pump tax credit · Colorado Department of Revenue · IRS 25C credit · Colorado home energy rebates · Boulder County EnergySmart · United Power water heaters · A.O. Smith ProLine spec sheet · Rheem Performance Plus · Bradford White manual. Checked October 22, 2026; programs change, so confirm with each one before you buy.