Replace your water heater
Simple flow diagram – if your std electric or propane water heater is more than 10-12 years old, replace with a heat pump water heater (HPWH). If gas and you are willing to spend more money and have energy costs stay the same, also fine.
The new HPWH will cost about $3,500. In addition, if you are replacing a gas or propane water heater, you will need a new 220 V circuit but probably not a panel upgrade. The new circuit will cost about $1,000.
Below is a summary of state and federal tax credits available.
| Tax Credits | Tax Credit Amount | Requirements |
|---|---|---|
|
Federal tax credit
|
30% up to $2,000
|
Energy Star certified
|
|
State tax credit
|
$500 (min. of $170 to customer)
|
Energy Star certified
|
Go here to search for your utility or local government rebates. (Note: these rebates are in addition to the tax credits.)
In addition, if your household income does not exceed 80% of the Area Median Income (AMI) (which you can check here); in late 2024 the Colorado Energy Office will offer additional rebates for HPWHs.