How Democrats’ Climate Bill Will ‘Energize’ Colorado’s Clean Energy Efforts

With a signature from President Joe Biden on Tuesday, Democrats’ $369 billion climate change spending package has become law — and federal officials say it won’t be long before Colorado and D other states are beginning to see the benefits.

“We will see impacts immediately,” Environmental Protection Agency Administrator Michael Regan said on a call with reporters Wednesday. “A good example is the tax credits for new electric vehicles – once the president signed the dotted line, that tax credit was made available to new vehicles nationwide.”

The new federal electric vehicle tax credit of up to $7,500 per vehicle — subject to a range of requirements and restrictions — is one of many clean energy incentives contained in the law. on Democrats‘ inflation-cutting bill, a scaled-down bill passed as a compromise with Sen. Joe Manchin of West Virginia which also includes corporate tax hikes and health care provisions.

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Other tax credits and investments in the bill will help boost wind and solar power generation, carbon capture and storage, clean heating technologies like heat pumps and more – all with the aim of reducing emissions of heat-trapping greenhouse gases in the atmosphere.

“We’re certainly very excited,” Colorado Energy Office executive director Will Toor said in an interview. “Although it will take some time to fully understand what the implications will be, it really does feel like it will accelerate and energize much of our efforts to move towards decarbonization.”

Under Toor, the Office of Energy coordinated the efforts of Gov. Jared Polis’ administration to meet emissions reduction targets set by legislation signed into law in 2019, including a 50 percent reduction nationwide. the state by 2030. The agency will be responsible for overseeing and distributing funds for some of the Cut Inflation Act clean energy programs, such as its $9 billion in rebates for improvements home energy.

“It will be something like $150 million to $180 million that we can use to support residential adoption of energy efficiency and home electrification,” Toor said.

The rebates will combine with new federal tax credits for electric heat pumps, rooftop solar and other home clean energy technologies, as well as state-level incentives passed by the General Assembly this year, to allow more homes and commercial buildings to move away from natural gas as a heating fuel, say supporters.

From day one, President Biden has made it clear that America will reclaim its position as a world leader on climate change… This law does that.

– Michael Regan, EPA Administrator

“You put it all together, and there really is going to be an opportunity to start moving towards wider adoption of heat pumps in commercial and residential properties,” Toor added.

A White House fact sheet released Wednesday predicts that more than 120,000 additional Colorado households will choose to install rooftop solar panels as a result of the bill’s incentives. Its grants to help local governments adopt the latest energy-efficient building codes, officials say, would help the average new homeowner in Colorado save $423 a year on their utility bills.

“From day one, President Biden has made it clear that America will reclaim its position as a global leader on climate change,” Regan said. “This law does that.”

$8 billion in federal investments

At an event last week to promote the adoption of electric school buses, Polis highlighted the importance of federal incentives for emerging clean energy technologies, which can send a powerful market signal nationwide. where more limited state-level programs cannot.

“The state program alone hasn’t been enough to get manufacturers ready to ramp up electric bus manufacturing,” he said. “The EPA program is because they know the demand will be there nationwide.”

Toor said the new federal climate law will “change the economics” for deploying new technologies, especially when it comes to less-developed sectors like electric trucks, buses and other heavy-duty vehicles.

“This is an area where we can do a lot to drive demand in the state, but we need supply. Federal action on heavy vehicles is really going to help bring in that supply,” Toor said. “I think this one is going to be pretty transformational.”

Substantial new tax credits for wind and solar energy could also further reduce emissions in Colorado’s electricity sector. Since Polis took office in 2019, his administration has secured commitments from major state utilities to cut emissions by about 85% by 2030. Toor said the additional credits could help utilities to achieve these goals as they begin their procurement processes, incentivizing new wind and solar projects. rather than natural gas production and may lead to greater emissions reductions in future electric resource plans filed with the Public Utilities Commission.

In total, industry group Advanced Energy Economy estimates Colorado will receive about $8 billion in federal investments from the IRA, adding about $53 billion in economic activity.

Administration officials have long expressed cautious optimism that the state is on track to meet the goals of its 2019 emissions law, despite skepticism from some of the law’s supporters about the Polis’ approach to achieving this. Now, with billions of dollars in federal aid on the way, officials are more confident than ever that Colorado will be able to meet or exceed the goals it has set, starting with a reduction of 26 % of statewide emissions by 2025.

“To combine the effects of the IRA and all of the policies that we’ve enacted in Colorado…we’ll try to figure out how those intersect and what trajectory we’re on right now,” Toor said. “We’re going to be very interested in trying to understand that in a more quantitative way.”

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