DENVER, CO – Several new tax credits will go into effect on January 1, 2024 that will save Coloradans and businesses money on clean energy technologies that reduce greenhouse gas emissions and create a healthier environment. HB23-1272, sponsored by Senate President Steve Fenberg, D-Boulder, Senator Lisa Cutter, D-Jefferson County, and Representatives Mike Weissman, D-Aurora, and Junie Joseph, D-Boulder, incentivizes the advancement and adoption of clean transportation such as electric vehicles (EV), high-efficiency heat pumps, geothermal electricity development, and measures to reduce industrial emissions. Coloradans and businesses will save an average $65 million each year with specific tax credits ramping up or down over time depending on available technologies and economic conditions.
“This new law will save Coloradans and businesses money on electric vehicles, e-bikes, clean energy sources, and energy efficient technologies like heat pumps in order to improve our air quality and help us meet our climate goals,” said Weissman. “We’re committed to combating climate change, and this monumental legislation invests in clean, sustainable energy sources that will jumpstart Colorado’s clean energy economy.”
“Colorado has become a national leader in promoting clean energy technologies, but there’s much more we can do,” Fenberg said. “In order to further our commitment to our climate goals, we must do more to make adopting clean energy technology a feasible and attractive option for Coloradans – no matter their zip code or income level. The tax credits we passed this year will save Colorado residents and businesses money, help us meet our climate goals, and improve Colorado’s air quality.”
“Under this law, we’re reducing the cost of clean energy technologies so more Coloradans can use them in their everyday lives – from commuting to work to heating or cooling their homes,” said Joseph. “Starting in January, Coloradans and businesses will be able to claim an expanded tax credit for electric vehicles, heat pumps and energy efficient technologies. Through these smart investments, we’re boosting Colorado’s clean energy economy, creating jobs, and saving people money on the technologies we need to deploy to address our climate crisis.”
“Many Coloradans want to make the switch to electric vehicles or install heat pumps, but costs stand in the way,” Cutter said. “With these tax credits, we will lower the prices of clean energy technologies for Colorado families and business owners, helping us to improve our air quality, meet our climate goals, and bolster our economy. I’m proud to see this important legislation go into effect.”
A portion of HB23-1272 took effect earlier this year, including increasing the income tax credit for electric or plug-in hybrid vehicles to $5,000 and will decrease over time. Some of the specific EV tax incentives going into effect on January 1, 2024 include:
An additional $2,500 tax credit for electric or plug-in vehicles with a retail price of $35,000 or lower;
Boosting the tax credit for light-duty trucks to $5,000 (will decrease over time); and
Boosting the tax credit for medium-duty trucks to $12,000 (will decrease over time)
HB23-1272 also outlines specific tax incentives to encourage large-scale reductions of greenhouse gas emissions through new and innovative technologies. Some of the specific tax incentives going into effect on January 1, 2024 include new refundable tax credits for:
Geothermal energy project expenditures that meet certain criteria;
The production of geothermal electricity;
The installation of heat pump technology or a thermal energy network that meets certain industry standards; and
The creation of a sustainable aviation fuel production facility.
On April 1, 2024, an additional element of HB23-1272 will go into effect. It creates a $500 tax credit for e-bikes retailers.
Of the $500 tax credit, $450 will be passed along to the consumer. SB23-016, sponsored by Senator Chris Hansen, D-Denver, and Representatives Karen McCormick, D-Longmont, and Emily Sirota, D-Denver, aims to save Coloradans money by expediting electrification and updating Colorado’s greenhouse gas emission reduction goals to match the latest climate science.
It would add interim targets, including a 65 percent reduction in greenhouse gas emissions relative to 2005 levels by 2035, and a new goal of 100 percent emissions reduction by 2050.The portion of the SB23-016 going into effect on January 1 will help Colorado meet those goals by reducing the cost of electric lawn mowers, leaf blowers, trimmers, and snow blowers with a new income tax credit available to retailers and provided to purchasers as a discount.
“As the effects of climate change become more and more pronounced, it is obvious we must implement bold policies to reduce greenhouse gas emissions and mitigate the impacts on our climate and our environment,” Hansen said. “Coloradans are demanding we act, and we are tackling this challenge head on by implementing policy that will speed up electrification so we can reduce emissions and put our state on a path to climate sustainability for generations to come.”
“This tax credit will save Coloradans money on battery-powered lawn equipment to encourage their use over noisy and polluting gas powered equipment,” said McCormick. “This law will help keep Colorado on a strong path forward to combat climate change and bring us closer to meeting our state’s climate goals.”
“Coloradans are demanding climate action, and we’re committed to doing our part to protect the planet for future generations,” said Sirota. “With this law, we can help mitigate the effects of climate change and improve air quality by reducing the cost of electric lawn equipment including lawn mowers, leaf blowers and other tools. Electrifying lawn equipment is one piece of this important legislation that protects our environment and saves Coloradans and businesses money on clean energy that reduces greenhouse gas pollution.”
To help meet Colorado’s emissions goals, SB23-016 also requires the Public Utilities Commission and local governments to consider and prioritize upgrades and additions to the state’s electrical transmission infrastructure system, and conduct a study on transmission capacity to pave the way for electrification across the state.