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April 6, 2023

Clean Energy Tax Incentives Win Committee Approval

HB23-1272 saves Coloradans money with more than $60 million in annual tax credits and exemptions to businesses and consumers for decarbonization investments

DENVER, CO – The House Energy & Environment Committee today passed legislation to save Coloradans’ and businesses money by expanding tax incentives for clean transportation, heat pumps, geothermal energy, and industrial emissions reductions. This bill is part of a broader legislative package to incentivize the advancement and adoption of clean energy technologies that build upon federal initiatives to maximize Colorado’s ability to benefit from federal funds, create good-paying jobs and help the state meet its climate goals. 

“This monumental legislation is pivotal in helping Colorado reach its climate goals while significantly lowering energy costs for businesses and families,” said Rep. Mike Weissman, D-Aurora. “From e-bikes and electric vehicles, to geothermal heating and cooling systems, this bill shepherds clean energy tax incentives to improve our air quality and save Coloradans money. We’re committed to investing in innovative clean energy sources to power our economy and heat our buildings, and this bill builds upon federal investments to help Colorado utilize the latest technology to meet our climate goals and transition to more sustainable energy sources .”

“Our bill makes it easier for Coloradans to implement some of the impressive clean energy tools and technologies that not only save them money, but bring us closer to reaching Colorado’s climate goals,” said Rep. Junie Joseph, D-Boulder. “This bill offers consumers significant tax credits to reduce the cost of electric vehicles, prioritizes incentives for clean energy sources, and will attract new businesses to create good-paying jobs. This bill is good for consumers, businesses, the economy and our planet.”

Tax Incentives to Advance Decarbonization: HB23-1272 passed committee by a vote of 8 to 3. This bill would reduce the costs of clean energy technologies for residents and businesses across Colorado through tax incentives. This includes incentives for investments in geothermal electricity development and high-efficiency heat pumps, and for measures to reduce industrial pollution. It would also extend and expand tax credits for electric trucks and passenger vehicles and discounts on electric bikes to help increase adoption of cleaner transportation methods. Specifically, this bill builds upon the federal incentives available through the Inflation Reduction Act and the Infrastructure Investment and Job Acts to help Colorado maximize the impact of federal dollars. 

Tax incentives in HB23-1272 are expected to exceed $60 million with individual elements ramping up or down over time depending on available technologies. The bill:

  • Extends and expands the innovative motor vehicle tax credits and creates an additional $2,500 credit for certain electric passenger vehicles.

  • Continues the innovative truck tax credit for electric and plug-in hybrid electric trucks, with the credit ranging between $5,000 and $12,000 depending on the truck’s weight until 2032.

  • Creates a refundable income tax credit for the sale of qualifying e-bikes if the retailer offers a $700 discount to the customer.

  • Designs a refundable income tax credit for the installation of heat pump technology in residential and nonresidential buildings. The credits will vary based on the type and use of the heat pump.

  • Establishes the refundable industrial clean energy tax credit to implement greenhouse gas emissions reductions at qualifying large facilities.

  • Creates the refundable sustainable aviation fuel (SAF) production facility tax credit worth up to $1-5 million annually for the costs of constructing a SAF production facility.

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