The city has multiple incentives to help those considering building electrification. Replacing central air conditioning and/or aging gas-fired systems with electric heat pumps creates better outcomes for occupants, owners, and the climate.
I know I want to electrify my building!
If you know you want to electrify your air conditioning, furnace, or water heating equipment and feel comfortable with your options, the Equipment Rebate would be the best option for you. These rebates directly offset a portion of the cost to install electric heat pumps in your building. Rebates are currently available for:
- Heat pump rooftop units (HP RTUs)
- Split air-source heat pumps (ASHPs)
- Mini-split air-source heat pumps (mini-splits)
- Heat pump water heaters
I am curious about building electrification, but I'm not sure if it's right for me.
If you are still not sure about converting your building equipment to electric alternatives, you may find value in pursuing an Electrification Feasibility Report. The city offers rebates to cover the cost of this process. The Electrification Feasibility Report:
- Gives you information about whether replacing your air conditioner or gas-fired heating equipment with a heat pump is cost-effective compared to a like-for-like replacement.
- Serves as a requirement when pulling a permit to install gas-fired space or water heating equipment.
I am curious about building electrification, but I'm not seeing the equipment rebate I need.
Consider applying for the Building Electrification Pilot Program if you are interested in upgrading your air conditioning system, furnace, or hot water heater to a heat pump, but you either:
- Don't see an Equipment Rebate that will work for you OR
- Aren't sure about which Equipment Rebate is right for you
This program will help you:
- Assess opportunities for electrification in your building.
- Choose appropriate equipment replacements.
- Assess price quotes and scopes of work from contractors.
- Offset the costs of assessing and installing electric equipment.
- Identify additional rebates and financing.
Please note that there are limited spots in our Pilot Program.
I still don't know what to do.
If you are unsure which program is right for you, please reach out to Michaels Energy, our electrification program administrator, at DenverElectrification@MichaelsEnergy.com or 720.782.7661. They will be happy to assist you.
Equity Priority Buildings
Equity Priority Buildings serve frontline communities with less access to resources and who may face more barriers adapting to a changing climate. If your building falls into this category, you could be eligible for additional funding and facilitation services.
Apply for a rebate to help offset the cost of upgrading your air conditioning system, furnace, or hot water heater to a heat pump. We have launched rebates for existing commercial and multifamily buildings to install:
- Split air source heat pumps
- Mini-split heat pumps
- Heat pump hot water heaters
- Heat pump roof top units
You do not have to complete an
Electrification Feasibility Report to take part in this program. But you may choose to if you’re not sure whether heat pump equipment makes sense for you.
Preapproval is required.
Start your Equipment Rebate Application
Process
- Submit an application.
- Michaels Energy, the program administrator will review your application to determine eligibility.
- Once Michaels Energy verifies your eligibility, the program administrator will issue an Equipment Rebate Preapproval. This reserves your rebate.
- Work with an eligible contractor to install the heat pump equipment. Contractors must be licensed with the City and County of Denver to be considered eligible.
- When the project is complete, you or your contractor will submit documents for the program administrator to review:
- The invoice(s)
- Final permit inspection document
- Any specification sheets
- After review is complete, you will receive an Equipment Rebate Approval Letter.
- The program administrator will issue the equipment rebate via check to one of the following:
- The building owner
- The tenant responsible for space conditioning or water heating equipment
- The contractor if the rebate has been signed over to them
Rebate amounts are subject to change. Rebates are currently available for:
- Heat pump rooftop units (HP RTUs)
- Split air-source heat pumps (ASHPs)
- Mini-split air-source heat pumps (mini-splits)
- Heat pump water heaters
Rebates for additional equipment types are forthcoming.
Rules
- The program administrator must preapprove your application before they can reserve a rebate for you.
- We recommend that you wait until you receive your application preapproval before you buy equipment. Preapproval reserves a rebate for you.
- Rebate amounts are capped at:
- $60,000 per building owner/tenant per calendar year for standard buildings
- $120,000 per building owner/tenant calendar year for equity priority buildings
- Rebate amounts cannot exceed total project costs. If total project costs are less than the rebate, we will adjust the rebate.
- You may not receive a rebate from Denver’s Climate Action Rebate Program or Healthy Homes Program for the same equipment.
- Minority- and/or women-owned small businesses may qualify for both Certifiably Green Denver Equity Funding and Equipment Replacement Rebates. We will review these applications on an on-going basis to help place applicants in the best program for their needs.
- You must inform the program administrator if you are receiving another rebate or tax credit from:
- The state
- The federal government
- Xcel Energy
- Any other gas or electric utility
- Any other entity
- Building owners/tenants/contractors must submit IRS W9 forms and an Xcel Energy (or other utility) Data Release form to receive a rebate.
- For the program administrator to issue the rebate, you or your contractor must submit the following for approval:
- The project invoice(s)
- Equipment spec sheets
- Other supporting documents
- Building owners or tenants who are responsible for their own space conditioning or water heating equipment can sign the rebate over to their contractor.
- After Michaels Energy preapproves your application, your contractors will have 180 days to install the equipment. If this timeline is problematic for your project, especially considering current supply chain issues, please reach out to us before the 180 days is up:
- After 180 days, you will have to reapply unless you are granted an extension to the timeline in writing.
Eligibility
Participant Eligibility
To be eligible for the Equipment Rebate, you must confirm that your building:
- Is located within the City and County of Denver.
- Is a commercial or multifamily building with five or more units. Single family, duplex, triplex and four-plex buildings qualify for our Climate Action Rebates
- Has at least one of the following:
- Existing gas-fired space heating
- Existing gas-fired water heating
- Existing electric air conditioning equipment
You must also commit to:
- The program processes.
- The program rules.
- The program terms and conditions, including working with an eligible contractor.
Program participants will receive facilitation services, including, but not limited to:
- Technical support in selecting contractors to perform an Electrification Feasibility Report
- Translation and interpretation support
- Assistance with program processes and documents
- Program navigation support
- Vetting bids
- Advising on the best equipment options
- Assistance identifying additional incentives and rebates
Facilitation and service support will be capped at:
- 30 hours for Equity Priority Buildings
- 15 hours for Standard Buildings
Contractor Eligibility
- Are licensed with the City and County of Denver
- Properly pull a permit for the work
Any equipment installed without a permit or by a contractor not licensed with the City and County of Denver is not eligible for the Equipment Rebate.
Equity Priority Buildings
Equity Priority Buildings serve frontline communities with less access to resources and who may face more barriers adapting to a changing climate. If your building falls into this category, you could be eligible for additional funding and facilitation services. Equity Priority Buildings include:
- Deed-restricted multifamily affordable housing.
- Naturally occurring affordable housing (at least 66% of the building's units must have rents at or below 80% of area median income rent limits).
- Human service providers, defined as a non-profit tax-exempt entity that offers critical services.
- Individual condo or townhome unit owners who meet certain income requirements.
Eligible Equipment
The equipment you install must meet the following requirements:
| Equipment Type |
Equipment Classification |
Minimum Requirements |
Standard Rebate |
Equity Priority Rebate |
| Small Heat Pump Rooftop Unit, dual-fuel or all-electric (<135,000 Btu/h) |
Backup Heat - Electric Resistance (or none) |
- EER: ≥11.8
- IEER: ≥15.3
- ≥ 3.5 COP at 47ºF
- ≥ 2.4 COP at 17ºF
|
$5,000 for variable capacity equipment
$8,000 for ENERGY STAR compliant equipment
|
$10,000 for variable capacity equipment
$16,000 for ENERGY STAR compliant equipment
|
| Small Heat Pump Rooftop Unit, dual-fuel or all-electric (<135,000 Btu/h) |
Backup Heat - All Other |
- EER: ≥11.6
- IEER: ≥15.1
- ≥3.5 COP at 47ºF
- ≥2.4 COP at 17ºF
|
$5,000 for variable capacity equipment
$8,000 for ENERGY STAR compliant equipment
|
$10,000 for variable capacity equipment
$16,000 for ENERGY STAR compliant equipment
|
| Large Heat Pump Rooftop Unit, dual-fuel or all-electric (≥135,000 Btu/h) |
Backup Heat - Electric Resistance (or none) |
- EER: ≥11.1
- IEER: ≥14.5
- ≥3.4 COP at 47ºF
- ≥2.1 COP at 17ºF
|
$8,000 for variable capacity equipment with control strategies to maximize heat pump usage down to 30ºF
$11,000 for ENERGY STAR compliant equipment
|
$16,000 for variable capacity equipment with control strategies to maximize heat pump usage down to 30ºF
$22,000 for ENERGY STAR compliant equipment
|
| Large Heat Pump Rooftop Unit, dual-fuel or all-electric (≥135,000 Btu/h) |
Backup Heat - All Other |
- EER: ≥10.9
- IEER: ≥14.3
- ≥3.4 COP at 47ºF
- ≥2.1 COP at 17ºF
|
$8,000 for variable capacity equipment with control strategies to maximize heat pump usage down to 30ºF
$11,000 for ENERGY STAR compliant equipment
|
$16,000 for variable capacity equipment with control strategies to maximize heat pump usage down to 30ºF
$22,000 for ENERGY STAR compliant equipment
|
| Split Air Source Heat Pump (dual- fuel or all-electric) |
High Efficiency |
- SEER2: ≥15.2
- EER2: ≥11.7
- HSPF2: ≥7.8
|
$3,000 |
$6,000 |
| Split Air Source Heat Pump (dual- fuel or all-electric) |
Cold Climate |
|
$5,500 |
$11,000 |
| Mini Split Heat Pump (dual-fuel or all-electric) |
High Efficiency |
- SEER2: ≥15.2
- EER2: ≥11.7
- HSPF2: ≥7.8
|
$3,000 |
$6,000 |
| Mini Split Heat Pump (dual-fuel or all-electric) |
Cold Climate |
|
$5,500 |
$11,000 |
| Heat Pump Water Heater |
NEEA Tier 3 |
Cool Climate Efficiency: ≥2.6 |
$2,500 |
$5,000 |
| Heat Pump Water Heater |
NEEA Tier 3+ CTA-2045 B |
|
$3,500 |
$7,000 |
| Heat Pump Water Heater |
NEEA Tier 4 |
Cool Climate Efficiency: ≥3.0 |
$3,500 |
$7,000 |
Common Heat Pump Terms
| Backup/Supplemental/Auxiliary Heating |
A secondary heating system that works with your heat pump to provide heat below a specific outside air temperature. |
| Cold Climate Heat Pump |
Heat pumps with better efficiency and capacity at lower outside air temperatures, well below freezing. Cold Climate Heat Pumps operate reliably at 5°F, and some as low as -15°F.
Often abbreviated as CASH (Cold Climate Air Source Heat Pump) or ccMSHP (Cold Climate Mini Split Heat Pump)
|
| Coefficient of Performance (COP) |
A common efficiency metric, simplified for energy out / energy in. Higher is more efficient, indicating that more energy goes into the home relative to the energy supplied by the utility. Combustion appliances like furnaces always have a COP of less than 1, electric resistance heat has a COP of 1, while heat pumps can have a COP upwards of 4. |
| Dual Fuel |
An HVAC system that uses both electricity and gas to supply heat. |
| SEER/EER/HSPF and SEER2/EER2/HSPF2 |
SEER - Seasonal Energy Efficiency Ratio:
- An indicator of cooling energy efficiency throughout a cooling season, a higher value indicates better efficiency
HSPF - Heating Seasonal Performance Factor:
- An indicator of heating efficiency throughout a heating season, a higher value indicates better efficiency
EER - Energy Efficiency Ratio:
- A snapshot of cooling efficiency at 95° outdoor air temperature.
"SEER2/HSPF2/EER2" – as of 01/01/23, the Department of Energy has created new standards to reflect testing procedures that more closely mimic real-world conditions. This change should result in tested efficiencies that are closer to actual performance.
|
The Building Electrification Pilot Program will help you understand the costs, benefits, and barriers to installing electric heat pump technology in your building. We'll walk you through the process from start to finish and cover any cost difference between the gas and electric system types. We are still accepting a limited number of applications for the pilot program. We are especially interested in working with Equity Priority Buildings, and/or hospitals, hotels, and schools at this time. If you own one of these building types, we encourage you to apply today!
This program will help you:
This pilot funding will cover:
- The cost of the Electrification Feasibility Report
- At least the difference in cost between an electric system and a gas system
The pilot program may cover up to 100% of the costs to install the electric system. Equipment rebates included in the pilot are capped at maximums of:
- $75,000 for standard buildings
- $120,000 for equity priority buildings
Preapproval is required.
Fill out an Interest Form
Equity Priority Buildings
Equity Priority Buildings serve frontline communities with less access to resources and who may face more barriers adapting to a changing climate. If your building falls into this category, you could be eligible for additional funding and facilitation services. Equity Priority Buildings include:
- Deed-restricted multifamily affordable housing.
- Naturally occurring affordable housing (at least 66% of the building's units must have rents at or below 80% of area median income rent limits).
- Human service providers, defined as a non-profit tax-exempt entity that offers critical services.
- Individual condo or townhome unit owners who meet certain income requirements.
If you are not interested in participating in or not accepted to the Pilot Program, you can apply for a rebate to help with the cost of an
Electrification Feasibility Report. This rebate is available to both building owners and tenants. If you are
thinking about electrification, the Electrification Feasibility Report can help you decide on the most cost-effective option. A contractor can complete the Electrification Feasibility Report for you. The rebate will help offset that cost.
If you know you want to electrify your space or water heating equipment, you do not have to complete an Electrification Feasibility Report. You should instead jump straight to the
Equipment Rebates.
Process
- Fill out an application indicating one piece of equipment to look at with an Electrification Feasibility Report.
- Michaels Energy, the program administrator will review and preapprove your application.
- Select a contractor who has completed an Electrification Feasibility Report training.
- Work with your contractor to complete and submit the Electrification Feasibility Report.
- The program administrator will review and approve the completed Electrification Feasibility Report.
- The contractor will invoice the program administrator for the cost of the Electrification Feasibility Report.
- The program will pay up to $2,500 to the contractor to cover the cost of the Electrification Feasibility Report. Contractors are not permitted to invoice customers for any remaining balance.
Rules
- Your application must be preapproved before you can receive the rebate. Electrification Feasibility Reports submitted before the program administrator has processed and preapproved your application will NOT be eligible for a rebate.
- An Electrification Feasibility Report looks at one piece of equipment at a time. You will need to complete a separate Electrification Feasibility Report for each piece of equipment.
- Each building may submit up to three applications for Electrification Feasibility Report rebates per calendar year. These will cover three different pieces of equipment. If you would like to submit more than three applications, contact us.
- Only one contractor will be paid for an Electrification Feasibility Report for any single piece of equipment. Two or more different contractors cannot receive a rebate for the same piece of equipment.
- Contractors must invoice Michaels Energy for the cost of the Electrification Feasibility Report. They may not invoice the building owner.
- Your contractor has 120 days to complete the Electrification Feasibility Report and submit an invoice after your application has been processed and preapproved. After 120 days, you will have to reapply.
- Contractors must have an IRS W9 on file or submit an IRS W9 to receive the rebate.
Eligibility
Participant Eligibility
To be eligible for the Electrification Feasibility Report rebate, your building must:
- Be located within the City and County of Denver
- Not be owned by the City and County of Denver
- Owners or tenants applying must be responsible for their own space heating, cooling, or water heating equipment
- Be a commercial or multifamily building regulated by the Denver Commercial Building Code. This includes:
- Triplexes and bigger multifamily buildings
- Townhouses greater than three stories above grade
- All commercial buildings
- Be regulated by Denver's Building Code (for example, public schools are regulated by the State of Colorado Building Code and are not eligible for this program)
- Have one of the following:
- Gas-fired HVAC (space heating or cooling)
- Gas-fired water heating
- Electric cooling-only equipment
You must agree to follow the program rules, processes and terms, including working with an eligible contractor.
Contractor Eligibility
For contractors to be eligible to receive this rebate, they must be on our list of eligible contractors. To get on this list, you must have attended an Electrification Feasibility Report training and passed the comprehension quiz. If you missed the in-person trainings, you can now take the training online. Make sure that you also complete the comprehension quiz. This is the only way we can confirm that you have completed the training. After you pass the comprehension quiz, we will add you to the list of eligible contractors.
There will be one final in-person training in August. You can register today if you would like to attend.
Benefits
Eligible Participants will Receive:
- Up to $2,500 for an Electrification Feasibility Report paid to eligible contractors.
- Facilitation services, which include but are not limited to:
- Technical support in selecting contractors for Electrification Feasibility Report services
- Translation and interpretation support
- Assistance with program processes and documents
- Program navigation support
- Assistance identifying other incentives and rebates
- Facilitation service support will be capped as follows:
- Equity Priority Buildings: up to 30 hours
- Standard Buildings: up to 15 hours
Heat pumps are an energy-efficient alternative to central air conditioning, gas-burning space heating, and water heating equipment in all climates. That's right; heat pumps can heat AND cool your home. Like a refrigerator, heat pumps use electricity to transfer heat from a colder space to a warmer space rather than generating heat.
- In winter, heat pumps gather heat from the outdoors and move it into your building to warm it.
- In summer, heat pumps collect heat from your home and transfer it outside to cool your building.
- Heat pump water heaters collect heat from the area outside of the unit and use that heat to heat water.
Since heat pumps move heat instead of creating it, they achieve 200-300% efficiency. While natural gas is currently less expensive than electricity, more efficient heat pumps use 2-3 times less energy than gas heating systems.
Heat Pump Rooftop Units
A heat pump rooftop unit is a type of Heating, Ventilation, and Air Conditioning (HVAC) system. They are often installed on the roof of a commercial or industrial building, but they can also be ground mounted.
These units provide both heating and cooling to the building using heat pump technology. They extract heat from the outside air during the winter and release heat outside during the summer. Rooftop units usually either have a gas or electric resistance backup heat source. Heat pump rooftop units typically contain:
- A compressor
- A reversing valve
- A fan
- A heating and cooling coil
- A back-up heat system
- Controls that regulate the temperature and airflow
Split Air-Source Heat Pump
A split air-source heat pump system has two parts: an outdoor unit and an indoor unit. The outdoor unit contains a compressor, a fan, and a coil, while the indoor unit contains a fan and a coil. Refrigerant lines connect the two units to transfer heat between them. Often, these units use existing ductwork and air handlers in a building and replace a furnace and an air conditioner.
During the winter, the split air-source heat pump extracts heat from the outside air and transfers it to the indoor unit. The indoor unit then distributes heat throughout the building. During the summer, the process is reversed, and the heat pump extracts heat from the indoor air and releases it outside.
Mini-Split Heat Pumps
A mini-split system has two components:
- An outdoor heat pump unit
- Indoor head(s) that deliver hot or cold air
Refrigerant lines connect the two units to transfer heat between them. During the winter, a mini-split extracts heat from the outside air and transfers it to the indoor head(s) via the refrigerant. The indoor head(s) then distributes heat throughout the building. During the summer, the process is reversed: the heat pump extracts heat from the indoor air and releases it outside.
Often mini-split heat pumps are ductless, which means they need no ductwork to deliver heating or cooling to the building. Instead the indoor heads have fans and directly deliver the heating or cooling. They are often mounted on a wall or ceiling.
A mini-split is a great option to add heating/cooling to a single space in a building. They may be the most cost-effective heat pump option for buildings without ductwork or where adding ductwork is cost-prohibitive. Because each head is controlled individually, mini-splits allow you to keep different spaces at different temperatures. They can be suitable for infrequently used rooms.
Heat Pump Water Heaters
A heat pump water heater pulls heat from the surrounding air and uses it to heat water in a storage tank. They use the same technology as heat pumps that heat air and apply it to water heating instead.
