Do the work in this order: seal and insulate, check the panel, then heating and cooling, then the water heater. Each step makes the next one smaller or cheaper.
When something stops working
A furnace that quits in January comes first, and so does a failed water heater. Get it running, then pick up the plan. For a heat pump, the installer runs the panel load calculation as part of the job.
Two things change. Whole Home Efficiency counts upgrades done after you enroll, so an emergency replacement likely won't count toward the three. And the $600 insulation-first bonus needs insulation invoiced before the heat pump.
Before step 1
Have Xcel's audit and enroll in Whole Home Efficiency. Xcel requires enrollment before any upgrade starts.
1. Seal and insulate
ENERGY STAR puts the savings at up to 10% of a year's energy bills. A tighter house can need less heat, and Xcel pays $600 more when insulation and air sealing are invoiced before a heat pump.
We don't do this work. Hire from Xcel's Whole Home Efficiency contractor list.
2. Check the panel
Check the panel before any equipment is picked. A heat pump usually needs a 240-volt circuit, and a heat pump water heater may need another. A load calculation shows whether your panel can carry them. Checking is early; installing isn't. If you need a new panel, it goes in with the first job that needs it, sized once for the whole plan.
3. Heating and cooling
Replace what's old first: a heat pump or air conditioner past 10 years, a furnace or boiler past 15 (ENERGY STAR). When both are old, a heat pump and a 95% gas furnace can go in as one job.
At Xcel's rates since October 6, 2026, heat from a heat pump costs more than heat from a 95% gas furnace at every outdoor temperature. A heat pump earns its place by replacing the air conditioner and by its rebates. Against electric baseboards it cuts the bill: even at 5°F, a cold-climate heat pump gives at least 1.75 times the heat per kWh that baseboards do.
4. The water heater
A tank past 10 years can fail without warning, so choose its replacement before it goes. Against a standard electric tank, ENERGY STAR puts a heat pump water heater's savings at about $550 a year for a family of four.
Common questions
Do I have to do all four?
No. Do what's old or bothering you, in this order. Three qualifying upgrades within two years of enrolling could add 25% of each one's standard Xcel rebate.