Is Electrification Worth It in Colorado?

Denver: 300 sunny days, -5°F winter nights, and $0.14/kWh electricity.

Colorado is a weird mix. You need serious heating (6,000+ degree days in Denver, more in the mountains), but your winters are dry and sunny—perfect for cold-climate heat pumps. Natural gas is cheap ($0.95/therm) thanks to Wattenberg Field, but electricity isn't expensive either. Xcel Energy offers heat pump rebates, and the federal credit helps.

This one depends on your current system. If you're replacing an old AC + furnace, definitely go heat pump—you're buying new equipment anyway. If your gas furnace is only 10 years old, the math gets tighter. But the air quality angle matters too—Front Range ozone and winter inversions make electrification appealing even if the payback is 10+ years.

Updated December 2024Data from EIA, DSIRE, NREL
Heat Pump Payback
Not Recommended
With incentives
Annual Savings
$1,898
Full electrification
Available Incentives
$12,000
Federal + state + utility
CO₂ Reduction
14.3 tons
Per year

Colorado Energy Costs

Electricity Rate
$0.142/kWh
Natural Gas Rate
$1.08/therm
Average Electric Bill
$118/month
Average Gas Bill
$68/month
Climate Zone
cold
Heating Degree Days
6,100
Cooling Degree Days
750

Visual ROI Analysis

Payback Period Comparison

Lower is better • Shortest payback = fastest return on investment

Annual Savings Comparison

Higher is better • More annual savings = greater long-term benefit

Cumulative Net Savings Over Time

Point where line crosses $0 = payback achieved • Steeper line = faster savings growth

Return on Investment by Upgrade

🌡️

Heat Pump HVAC

Upfront Cost$12,000 - $22,000
Total Incentives-$3,200
Net Cost$8,800 - $18,800
Annual Savings$-245/yr
Payback PeriodNot Recommended
Lifetime ROI-18%
CO₂ Reduction4.7 tons/yr
☀️

Solar Panels

Upfront Cost$15,000 - $30,000
Total Incentives-$4,500
Net Cost$10,500 - $21,000
Annual Savings$920/yr
Payback Period18.0 years
Lifetime ROI119%
CO₂ Reduction3.1 tons/yr
💧

Heat Pump Water Heater

Upfront Cost$2,500 - $4,500
Total Incentives-$2,800
Net Cost$-300 - $1,700
Annual Savings$111/yr
Payback Period13.0 years
Lifetime ROI39%
CO₂ Reduction1.8 tons/yr

EV Charger + Electric Vehicle

Upfront Cost$800 - $2,500
Total Incentives-$1,500
Net Cost$-700 - $1,000
Annual Savings$1,112/yr
Payback Period0.2 years
Lifetime ROI1440%
CO₂ Reduction4.8 tons/yr

Full Electrification Package

Total Upfront Cost
$30,300 - $59,000
Total Incentives
-$12,000
Net Cost After Incentives
$18,300 - $47,000
Annual Energy Savings
$1,898/year
Lifetime Savings (18 years)
$34,158
Simple Payback
20.2 years
💡

Best ROI for Colorado

Based on your state's energy costs and climate, EV Charger offers the best return on investment with an average payback of 0.2 years and an ROI of 1440%.

0.0 years slower than average compared to the national average.

Ready to electrify your Colorado home?

Get free quotes from local contractors who specialize in heat pumps, solar, and electrification.

Get Free Quotes →