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COLORADO

Colorado Water Heater
Replacement

Licensing, rebates, running costs and local guides for 48 Colorado communities.

Local guides in Colorado

Denver–Boulder area

PlacePermit to replaceFeeElectricCompanies
DenverRequired$35+ by job valueXcel Energy16
AuroraRequired$99Xcel Energy15
LakewoodRequired$80Xcel Energy15
ThorntonRequiredBy job value (from $30)Xcel Energy, United Power10
ArvadaRequired$55Xcel Energy13
WestminsterRequired$40Xcel Energy11
CentennialRequiredBy job value (from $23.50)Xcel Energy, CORE Electric Cooperative13
BoulderRequiredBy job value (from $13.60)Xcel Energy11
Highlands RanchRequired (county)By job value (from $23.50)Xcel Energy12
LongmontRequired$40Longmont Power & Communications (LPC)10
Castle RockRequired$75CORE Electric Cooperative11
BroomfieldRequiredBy job value (from $23.50)United Power, Xcel Energy12
Commerce CityRequiredBy job valueUnited Power, Xcel Energy8
ParkerRequiredBy job valueCORE Electric Cooperative11
LittletonRequiredBy job value (from $25.85)Xcel Energy13
BrightonRequiredBy job value (from $23.50)United Power10
NorthglennRequiredBy job value (from $23.50)Xcel Energy7
EnglewoodRequiredBy job value (from $26.78)Xcel Energy11
ErieRequired$35United Power, Xcel Energy7
Ken CarylRequired (county)By job value (from $55)Xcel Energy2
Wheat RidgeRequired$60Xcel Energy11
LafayetteRequired$100Xcel Energy6
Four Square MileRequired (county)By job value (from $94.73)Xcel Energy17
LouisvilleRequiredBy job value (from $28)Xcel Energy7
GoldenRequiredBy job value (from $25.85)Xcel Energy15
SherrelwoodRequired (county)By job value (from $24)Xcel Energy4
WelbyRequired (county)By job value (from $24)Xcel Energy3
Greenwood VillageRequiredBy job value (from $1)Xcel Energy7
Lone TreeRequiredBy job value (from $23.50)Xcel Energy6
Federal HeightsRequiredBy job value (from $23.50)Xcel Energy5
Castle PinesRequiredBy job value (from $42)CORE Electric Cooperative, Xcel Energy5
SuperiorRequiredBy job value (from $28.50)Xcel Energy3
The PineryRequired (county)By job value (from $23.50)CORE Electric Cooperative1
BerkleyRequired (county)By job value (from $24)Xcel Energy2
Cherry CreekRequired (county)By job value (from $94.73)Xcel Energy3
GunbarrelRequired (county)By job value (from $38.95)Xcel Energy1

Colorado Springs area

PlacePermit to replaceFeeElectricCompanies
Colorado SpringsRequired$40Colorado Springs Utilities7
Security-WidefieldRequired (county)$40Fountain Utilities, Mountain View Electric Association2
FountainRequired$40Fountain Utilities, Colorado Springs Utilities, Mountain View Electric Association6
Cimarron HillsRequired (county)$40Colorado Springs Utilities, Mountain View Electric Association1
Black ForestRequired (county)$40Mountain View Electric Association4
MonumentRequired$40Mountain View Electric Association, CORE Electric Cooperative (listed by the town as IREA)5

Fort Collins area

PlacePermit to replaceFeeElectricCompanies
Fort CollinsRequired$65Fort Collins Utilities5
LovelandRequired—Loveland Water and Power4
WindsorCheck with cityWindsor charges SAFEbuilXcel Energy, Poudre Valley REA2
JohnstownRequiredBy job value (from $23.50)Xcel Energy, United Power, Poudre Valley REA1
BerthoudRequired$150Xcel Energy, Poudre Valley REA2
WellingtonRequired$75Poudre Valley REA, Xcel Energy1

Licensing in Colorado

Colorado licenses Residential, Journeyworker and Master plumbers through the Division of Professions and Occupations (DORA).

A Residential plumber license covers one- to four-family homes up to two stories; plumbing contractors work under a Master plumber. Many cities also require contractors to register or hold a city license.

Colorado DORA license lookup ↗ · DORA plumbing licenses ↗

Rebates and credits in Colorado

Colorado heat pump tax credit

Colorado Energy Office · Active for 2026 installs

$250 credit for an ENERGY STAR heat pump water heater installed in 2026, claimed by a state-registered contractor, who must pass at least $83 to you as an invoice discount.

Look for “State of Colorado Heat Pump Discount” on the invoice. You file nothing.

Program details ↗

Xcel Energy heat pump water heater rebate

Xcel Energy (Colorado) · Active

$750 for an Xcel customer who installs a qualifying heat pump water heater. A limited-time bonus of up to $1,500 applies when it replaces a natural gas or propane water heater.

Self-install or any contractor. Units over 80 gallons excluded. Apply by September 30 of the year after installation.

Program details ↗

Residential Water Heater Rebate – Heat Pump Water Heater

Colorado Springs Utilities · Active

Up to $750 for a qualifying ENERGY STAR heat pump water heater.

Colorado Springs Utilities customer; equipment must be ENERGY STAR; submit the application with an itemized receipt, postmarked by Jan 31 of the following year.

Program details ↗

Residential Water Heater Rebate – Natural Gas Water Heater

Colorado Springs Utilities · Active

$300 for a qualifying ENERGY STAR natural gas water heater; qualifying boilers get $1,200.

Colorado Springs Utilities natural gas customer; ENERGY STAR equipment; application postmarked by Jan 31 of the following year.

Program details ↗

Efficiency Works – Heat Pump Water Heater Rebate

Efficiency Works (Platte River Power Authority with Fort Collins Utilities, Loveland, Longmont and Estes Park) · Active

Up to $600 for an ENERGY STAR heat pump water heater replacing an electric (or propane) water heater, or up to $400 when replacing a natural gas water heater (2026 rates).

Electric customer of Fort Collins Utilities (or Estes Park, Longmont, Loveland); retail-product rebate applications are due within 45 days of purchase or installation; used or refurbished units not eligible. Efficiency Works says Xcel Energy gas customers may also get an Xcel heat pump water heater rebate on top.

Program details ↗

Efficiency Works – Service Panel Upgrade

Efficiency Works · Active

$500 toward a service panel upgrade or circuit-sharing device needed to add electrification equipment such as a heat pump water heater.

Existing panel under 200 amps; installed by a licensed electrician; one rebate per upgrade project.

Program details ↗

Federal Energy Efficient Home Improvement Credit (25C)

IRS · Ended

Covered improvements made through December 31, 2025. Not available for 2026 installations.

Program details ↗

Checked September 29, 2026. Utility rebates are only for that utility’s customers. Each city guide shows the rebates for its utilities.

What it costs to run in Colorado

Estimated yearly energy cost at Colorado’s average residential prices: 16.72¢ per kWh (year to date through July 2026) and $11.17 per thousand cubic feet of gas (2025 annual average).

Estimated yearly energy cost by water heater type in Colorado
TypeEfficiency (UEF)Energy per yearEst. cost per year
Gas storage tank0.64174 therms$188
Gas tankless0.93120 therms$129
Electric storage tank0.923,556 kWh$595
Heat-pump tank3.5935 kWh$156

Assumes the Department of Energy’s medium-use test: 55 gallons a day heated 67°F, and typical efficiency ratings for each type. Colder incoming water, larger households and your utility’s actual rates change the result. Sources: EIA Electric Power Monthly, Table 5.6.B ↗ · EIA Natural Gas Prices, residential ↗ · ENERGY STAR test conditions ↗.