As of January 1, 2024 Colorado provides an income tax credit on eligible heat pump installations installed by Registered Contractors. This income tax credit is claimed by Registered Contractor who provides a point-of-sale discount to the consumer on an eligible installation. All Colorado residents, businesses, and other organizations who install an eligible heat pump through a registered contractor may receive a portion of the tax credit (at least 33.33%) as a discount at the time of installation.
Installing contractor must be an approved, Registered Contractor with the Colorado Energy Office. To be eligible, heat pumps must be Energy Star certified, Air-Conditioning, Heating, and Refrigeration Institute (AHRI) matched, installed as a primary heat source (capable of providing 80% of total annual heating), and must be capable of providing heat to all conditioned space within the building.
Types of eligible equipment include, air-source heat pump, ground-source heat pump, water-source heat pump, combined-source heat pump, heat pump hot water heater, thermal energy network, variable refrigerant flow heat pump systems.