How a heat pump differs
A heat pump is an air conditioner that can run backward. In July it cools the house the same way an AC does. In January a reversing valve flips the refrigerant flow, and the outdoor unit pulls heat in from the outside air and sends it through your ducts.
Put one where the old AC sat and most of the system stays: the furnace, the ducts, the registers and often the line set. The furnace becomes backup heat for the coldest days.
What gets replaced
A new AC means a new outdoor unit and a new indoor coil matched to it. The thermostat usually stays.
A heat pump replaces the same two parts and adds a control that runs both heat sources and picks one by outdoor temperature.
What each one costs
A new AC in the same spot typically costs $6,800 to $8,500. A ducted heat pump costs most Xcel gas customers in the Denver metro $15,300 to $19,000 out of pocket, from $21,000 to $28,000 before rebates. Brand moves it within that range: a Mitsubishi ducted system sits near the top, at $17,700 to $19,000 out of pocket.
Only the heat pump can get heat pump rebates, and only on qualifying models. Homes with Xcel electric but not Xcel gas get about half of Xcel's part. Xcel Energy changed those rebates on October 1, 2026, so check current rebates before you compare final numbers.
How to choose quickly
If your furnace is young and you only want cooling, a new AC is the easy choice. If you want to burn less gas in winter, price the heat pump too. We can price both from the same three photos: the outdoor unit, its data label, and the furnace with the coil box on top.