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Heat pumps: Energy-efficient and running off electricity, Denver wants to make them more affordable too

Denver ready to help residents install heat pumps through rebate program
Denver rebate program ready to help pay for heat pumps
Posted at 7:29 AM, Jan 30, 2023
and last updated 2023-01-30 15:05:46-05

Denver Climate Action Rebates opened on January 9, and aims to make homes more energy efficient while trying to reduce monthly energy bills. Heat pumps were the most popular category last year, according to those with the city and county of Denver, and they expect even more interest in the technology this year.

The rebates offered in Denver for heat pumps range from $1,500 to $3,500, depending on the kind of heat pump.

"A heat pump can both heat and cool your home," said Grace Rink, the chief climate officer for the City and County of Denver. “It extracts heat from the air, warms it up, brings it inside the house and recirculates that air. In the summer, it actually brings in the air from the outdoors, cools it, and sends it through the house.”

Those with the Office of Climate Action, Sustainability and Resiliency said $3.5 million has been allocated for this year and next year specifically for heat pump technologies.

“We had planned on the program last year, lasting for three years. We spent all three years worth of money in one year," said Rink, speaking to the popularity of the rebates. "So, what we did was we added enough money for this year and next year to match what we spent last year.”

Rink believes this year will attract more interest to the heat pumps because of the Inflation Reduction Act providing tax credits for the same equipment. She also said federal rebates will be available later this year.

"Because there's so much funding coming out from the federal government to support this technology, we think that even more households will be aware of it and therefore interested in replacing their aging equipment or their equipment that has failed completely with this new technology," Rink said.

Rink also said heat pumps can help lower monthly energy bills since they run off electricity.

“Most homes in Denver are heated with natural gas, and the natural gas prices are what people are experiencing right now, which are really up close to 75% over last year," said Rink. “Electricity prices, on the other hand, are more regulated than natural gas prices and so they're more stable for households. They do go up over time, but they don't have significant fluctuation from one season to the next.”

Dan Esposito is one of the Denver residents who switched to a heat pump through the rebate program last year. In March of 2022, Esposito woke up to his furnace breaking, when the household also needed a new source of air conditioning after one of their swamp coolers also broke.

“Gas prices were just rising so much. So we started shopping for electric options, and heat pumps are super efficient," Esposito said. “Luckily for us, the Denver Climate Action Rebate program came out as we were still looking, and then that made it a no brainer.”

Denver ready to help residents install heat pumps through rebate program

Esposito said their household ended up paying $13,000 total for the heat pump to be installed. However, without a $7,000 rebate from the City and County of Denver, along with an $800 rebate from Xcel Energy, they would have paid around $21,000.

“By not burning natural gas in a furnace, we've cut our natural gas use about 90%. So, we just have a hot water heater left," Esposito said. "Our bills are quite a bit lower."

It can take up to four months from the initial call to a contractor about installing a heat pump to having it fully operating in a household, according to Rink.

Rink said in order to be eligible for the rebate, homeowners must use contractors who have been approved first by Xcel Energy.

"Xcel Energy requires that in order for a homeowner to qualify for their rebates, and we want our customers to also be able to receive the Xcel rebate," Rink explained. "So, we use the same contractors that they use, that way the household can stack the rebates together so they can get the maximum amount of financial assistance for their project.”

The home energy rebates through the City and County of Denver are open now, and will remain open for applicants until all of the money is used.

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