How much does it cost to heat and cool a 2,000 sq ft home in Colorado?

In Colorado (17.1¢/kWh via Xcel Energy Colorado), a 2,000 sq ft home averages $883/year ($74/month) with a high-efficiency heat pump, $761/year with a natural gas furnace and central AC, and $2,665/year with electric baseboards.

Are heat pumps cheaper to run than gas furnaces in Colorado?

At Colorado's natural gas rate of $1.25/therm, the economic break-even electricity price for a COP 3.1 heat pump is 14.4¢/kWh. Comparing this against Colorado's residential electricity rate of 17.1¢/kWh determines annual operating savings.

Colorado Heating & Cooling Cost Calculator (2026)

2,000 Sq Ft Heat Pump Bill

$74/mo

CO Electricity / Gas Rate

17.1¢ / $1.25

15-Yr Savings vs Baseboard

+$23,130

Colorado Annual Heating & Cooling Bills by Home Size

In Colorado, a 2,000 sq ft home averages $883/year ($74/mo) using a cold-climate heat pump ($828/yr winter heating + $54/yr summer cooling), compared to $761/year with a natural gas furnace and $2,665/year with electric baseboards.

Home Size	Heat Pump (COP 3.1)	Gas Furnace + AC	Baseboard + Window AC	15-Yr Heat Pump Savings
1,000 Sq Ft	$441/yr ($37/mo)	$381/yr ($32/mo)	$1,333/yr ($111/mo)	+$9,780
1,500 Sq Ft	$662/yr ($55/mo)	$571/yr ($48/mo)	$1,999/yr ($167/mo)	+$16,455
2,000 Sq Ft	$883/yr ($74/mo)	$761/yr ($63/mo)	$2,665/yr ($222/mo)	+$23,130
2,500 Sq Ft	$1,103/yr ($92/mo)	$951/yr ($79/mo)	$3,332/yr ($278/mo)	+$29,835
3,000 Sq Ft	$1,324/yr ($110/mo)	$1,142/yr ($95/mo)	$3,998/yr ($333/mo)	+$36,510
3,500 Sq Ft	$1,544/yr ($129/mo)	$1,332/yr ($111/mo)	$4,665/yr ($389/mo)	+$43,215

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Verify 2026 Federal 25C Tax Credit & Xcel Energy Colorado rebate eligibility and compare turnkey contractor pricing for a 3.0-Ton system (2,000 sq ft).

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