Denver, CO & the surrounding area
Xcel Energy Furnace Rebates in Denver
Xcel Energy pays a $225 rebate on a natural gas furnace at 95% AFUE in Denver right now. If a contractor has told you furnace rebates no longer exist, that is not what Xcel's own rebate page says. Call (303) 226-1486 for a free estimate from one insured local heating pro who will quote the qualifying equipment properly.
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What Xcel actually pays right now
Straight from Xcel Energy's heating equipment rebate page:
| Equipment | Requirement | Rebate |
|---|---|---|
| Natural gas furnace | 95% AFUE | $225 |
| Natural gas boiler | 95% AFUE | $225 |
| Natural gas boiler + indirect water heater | 95% AFUE | $325 |
That's the complete gas heating list. A standard-efficiency furnace — the 80% AFUE units that vent up an existing chimney — does not qualify for any rebate. The threshold is the whole point of the program.
Why you may have read that furnace rebates ended
Search "furnace rebate Denver" and you'll find contractor pages stating flatly that there are no utility rebates for furnaces in 2026, that rebate programs favor heat pumps exclusively, or that gas furnace and boiler rebates expired January 1, 2026.
We checked Xcel's own live rebate page rather than taking those claims at face value, and the $225 furnace rebate is listed and active.
Here's how the confusion probably started, because it isn't malicious. Xcel is reducing rebates — but the reduction applies to the heat pump bonus, a different program covering different equipment. On October 1, 2026 the heat pump bonus falls from three times the standard rebate to two times. Separately, on November 16, 2025, bonus eligibility was removed for customers with existing electric systems. Somewhere in the retelling, "Xcel is cutting heat pump bonuses" became "there are no furnace rebates."
It's $225 on an $8,000 job — it won't decide your purchase. But you should get it if you're buying qualifying equipment, and it's worth knowing when a company tells you money doesn't exist when it does.
The heat pump rebates are much larger
If you're weighing equipment types rather than just buying a furnace, the scale difference matters:
| Equipment | Standard | With bonus | After Oct 1, 2026 |
|---|---|---|---|
| Cold-climate ASHP (ducted or ductless) | $750/heating ton | $2,250/ton | $1,500/ton |
| Air source heat pump | $300/cooling ton | $900/ton | $600/ton |
| Ground source heat pump | — | $3,300/ton | $2,200/ton |
| Heat pump water heater | — | $2,250 | $1,500 |
On a typical 3-ton cold-climate system that's roughly $6,750 back at current bonus levels, against $225 for the furnace.
The bonus requires you to be an Xcel natural gas customer with a gas furnace or boiler as your primary heat. Deadlines: installed and invoiced before October 1, 2026, application submitted by October 15, 2026.
If that gap is large enough to make you reconsider, heat pump vs furnace in Denver works through where each one actually makes sense — including the cold-weather performance question and the panel-capacity cost that can erase the advantage.
Does the 95% furnace pay for itself?
The rebate is a rounding error on the decision. The efficiency is the real question.
A 95% AFUE furnace burns roughly 15% less gas than an 80% unit. Over a 15-to-20-year life in Colorado winters, that adds up meaningfully.
The offset is venting. A condensing furnace can't use your existing chimney — it exhausts cool, acidic condensate and needs PVC pipe run to the outside, which costs $899 to $1,965 on a conversion. So the honest comparison is:
- 95% furnace: $7,500 – $11,200 installed, plus $899 – $1,965 venting if converting, minus $225 rebate, minus ~15% on heating gas every year after.
- 80% furnace: $6,650 – $8,600 installed, no venting conversion, no rebate, higher gas bills for the life of the unit.
Staying 15 years, the high-efficiency unit generally wins. Selling in three, it generally doesn't. That's the entire calculation, and any contractor who tells you high efficiency is always the answer isn't doing it.
How to actually claim it
- Confirm the model qualifies before installation. Get the specific model number and its AFUE rating in writing on the quote. 94.5% is not 95%.
- Keep the itemized invoice. It needs to show equipment model, AFUE, and installation date.
- Submit through Xcel's rebate application portal after the work is finished.
- Ask about instant credit. Some participating contractors deduct the rebate from your invoice directly instead of making you wait for a check — more common on the heat pump side, but worth asking.
- Check the federal credit separately. A qualifying high-efficiency furnace may earn 30% of project cost up to $600 as a tax credit. Terms shift annually; verify the current year.
What this page is not
We're a referral service, not Xcel Energy and not your contractor. Rebate amounts and eligibility rules change, sometimes mid-year — the October 1 heat pump reduction is the live example. Confirm current amounts on Xcel's own site before you make a purchase decision. Everything here reflects Xcel's published figures as of this writing, and we'd rather you verify than take our word for it.
Get a quote that specs the qualifying equipment
Call (303) 226-1486 or send the form. One insured local heating professional will quote your options and confirm in writing whether the equipment meets the 95% AFUE threshold.
More detail: furnace installation cost in Denver, high-efficiency furnaces in Denver, and Colorado's low-NOx rules and permits.
Questions
Frequently Asked Questions
Does Xcel still offer a furnace rebate in 2026?
Yes. Xcel Energy's heating equipment rebate page lists $225 for a natural gas furnace at 95% AFUE, $225 for a 95% AFUE natural gas boiler, and $325 for a 95% boiler paired with an indirect water heater. These are current as of this writing. Some Denver contractor pages state that furnace rebates ended — that claim does not match Xcel's own published rebate page.
How much is the Xcel gas furnace rebate?
$225 for a natural gas furnace meeting 95% AFUE. Standard-efficiency furnaces below that threshold do not qualify. It's a modest amount against a $6,300 to $8,650 installation, but it's real money and it's one of the reasons to weigh a 95% unit against an 80% one.
What does 95% AFUE mean?
AFUE is Annual Fuel Utilization Efficiency — the share of the fuel's energy that becomes usable heat in your home over a season. A 95% AFUE furnace turns 95 cents of every gas dollar into heat and sends about 5 cents up the flue. An older 80% unit loses roughly 20%. The efficiency jump is why the rebate exists.
Do I need a specific contractor to get the Xcel furnace rebate?
For the gas furnace rebate you submit the application yourself through Xcel's rebate portal after installation, with your itemized invoice showing the equipment model and AFUE rating. Some heat pump rebates do require a participating contractor, and certain contractors will credit the rebate directly off your invoice — worth asking about before you sign.
Can I combine the Xcel rebate with a federal tax credit?
Generally yes. A qualifying high-efficiency gas furnace can be eligible for a federal tax credit worth 30% of project cost up to $600, and that's separate from the utility rebate. Tax credit rules change year to year, so confirm the current terms — or ask a tax professional — before counting on the amount.
Why are the heat pump rebates so much bigger?
Colorado is deliberately encouraging electrification. Xcel pays $2,250 per heating ton for a cold-climate heat pump with the bonus, which on a 3-ton system is roughly $6,750 against the furnace's flat $225. That bonus drops to $1,500 per ton on October 1, 2026, so the gap is narrowing, but it stays very large.
Is there a deadline for the furnace rebate?
The gas furnace rebate has no announced reduction date, unlike the heat pump bonus, which drops October 1, 2026. Utility programs do change from year to year, so confirm the current amount on Xcel's site before you make the purchase decision rather than assuming this page is still current when you read it.
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