Xcel energy offers Colorado customers a rebate of $40 for purchasing a natural gas standard tank water heater with an Energy Factor (EF) of 0.62, $60 for an EF of 0.65 and $80 for an EF of 0.67 or higher. The City of Aurora will match Xcel energy rebates given to any Aurora residents.

Colorado has limited funding left to provide $200 rebates for gas tank water heaters with an EF of at least 0.67, and Source gas offers $50 rebates for gas tank water heaters with an EF of 62+.

Unfortunately, there are not any residential gas storage tank water heaters that qualify for the federal Energy Efficiency Tax Credit, which will cover 30 percent up to $1,500 of the cost of water heaters with an EF of 0.82. To reach this efficiency level, your water heater would need to be tankless.