HB23-1272 saves Coloradans money with approximately $65 million in annual tax credits and incentives for businesses and consumers for decarbonization investments
AURORA, CO – Today, legislation to implement tax incentives to reduce the costs of adopting clean energy technologies for Colorado residents and businesses was signed by Governor Jared Polis.
HB23-1272, sponsored by Senate President Steve Fenber, D-Boulder, Senator Lisa Cutter, D-Jefferson County, and Reps. Mike Weissman, D-Aurora, and Junie Joseph, D-Boulder, is part of a package of legislation to incentivize the adoption of clean energy technologies and build upon federal initiatives to save Coloradans money, create good-paying jobs, and help the state meet its climate goals.
The bill includes incentives to advance and adopt clean transportation methods, high-efficiency heat pumps, geothermal electricity development, and measures to reduce industrial emissions. Tax incentives in the bill are expected to average around $65 million each year with individual elements ramping up or down over time depending on available technologies and economic conditions.
“Colorado has become a national leader in promoting clean energy technologies, but there’s much more we can do,” said Fenberg. “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.”
“This 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 electric vehicles to heat pumps, this law creates clean energy tax incentives to improve our air quality and save Coloradans money. Colorado Democrats are committed to investing in innovative, clean energy solutions across the board to help power our economy and heat and cool our homes.”
“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 signed into law.”
“Under this law, more Coloradans can take advantage of clean energy technology in their homes, vehicles and businesses,” said Rep. Junie Joseph, D-Boulder. “A wide range of tax credits will soon be available to businesses and every day Coloradans that will save them money on energy efficient upgrades and streamline our transition to a clean energy economy in Colorado. With smart investments and strong clean technology adoption, we can move Colorado forward, reduce costs for consumers and protect our environment.”
Extends and expands electric vehicle tax credits and creates an additional $2,500 credit for electric vehicles under $35,000.
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 starting in 2024.
Creates a $450 consumer credit for qualified e-bike purchases while supporting local retailers.
Designs a refundable income tax credit for the installation of heat pump technology in residential and nonresidential buildings. The credits vary based on the type and use of the heat pump.
Extends incentives for industrial and manufacturing facilities in Colorado to reduce air pollution through various qualifying efficiency, onsite energy generation, carbon capture, electrification, and other eligible measures.
Creates the refundable sustainable aviation fuel (SAF) production facility tax credit worth up to $1-3 million annually for the costs of constructing a SAF production facility.
The law compliments and builds on incentives included in the Federal Inflation Reduction Act and the Infrastructure Investment and Jobs Act and helps Colorado residents and businesses maximize their ability to utilize federal investments.