Colorado legislature takes key steps forward on climate, efficiency

Stumbles on advancing climate-friendly land use
May 9, 2023

Travis Madsen, Southwest Energy Efficiency Project (SWEEP)


[DENVER, CO] – At the close of the 2023 Colorado legislative session, the Southwest Energy Efficiency Project (SWEEP) staff are celebrating a significant slate of new policies aimed at reducing pollution, increasing efficiency, saving consumers money, and protecting Colorado’s climate; while lamenting the failure of land use measures to enable more efficient and affordable housing options near transit and jobs.

“With a glaring exception on the issue of pro-climate housing policy, this year’s legislature made meaningful progress in spurring a more efficient, sustainable, and affordable energy future for Colorado,” said Elise Jones, Executive Director of SWEEP. “New laws will incentivize cleaner vehicles and appliances, saving Coloradans money, reducing pollution, and creating green jobs.”

Assuming the Governor signs the adopted bills into law, Coloradans will have access to significant new incentives to purchase clean, quiet, efficient, and cost-effective tools to travel around the state and to make their homes more comfortable. The new policies offer meaningful benefits for all Coloradans, and will significantly amplify the value of the two main federal policies driving climate and efficiency progress: the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA).

Among the many new policies adopted this session, SWEEP sees the following as particularly significant:

HB23-1272 (Decarbonization Tax Credits) The legislature approved a package of tax credits for climate- and consumer-friendly technology, including electric vehicles, electric bicycles, and heat pumps (the amounts of which could be decreased by half in the event of an economic slowdown). These incentives will help more Coloradans access clean, efficient, money-saving technologies.

  • The bill raises the state light-duty electric vehicle (EV) tax credit to $5,000 starting July 1st, with an additional $2,500 available for vehicles with a manufacturer’s suggested retail price (MSRP) of $35,000 or less. In practical terms, a Colorado resident will be able to buy a new Chevy Bolt and get $15,000 off through state and federal tax credits. It also allows qualified participants to stack additional incentives on top of that, such as the Xcel low-income EV rebate or the Vehicle Exchange Colorado program. State tax credits will be available for EVs with an MSRP up to $80,000, but not more expensive models.
  • The bill also boosts the state tax credit for medium- and heavy-duty electric trucks to $12,000 through 2025, which will stack with a similar federal tax credit worth up to $40,000. This will help fleets access the vehicles that manufacturers will be supplying to Colorado to comply with the recently adopted Advanced Clean Truck rule package.
  • The bill creates a new statewide $450 point-of-sale incentive for electric bicycles, which begins in April 2024. The measure builds on the success of similar city and state programs, including Denver’s wildly popular e-bike rebate and the Can-Do Colorado program for essential workers.
  • To synergize with and maximize the impact of IRA programs aimed at accelerating building electrification, the bill increases and extends state tax credits for installing efficient home heating, cooling, and hot water systems. Starting in 2024, the tax credit for an air-source heat pump (an efficient, electric home heating and air conditioning appliance) will rise to $1,500; or $3,000 for a ground-source model. Heat pump water heaters will get a $500 credit. These will stack with federal and utility incentives, making it that much more affordable for residents and businesses to reduce pollution from their homes and workplaces.
  • The bill offers further state tax credits for industrial efficiency and electrification improvements and low-carbon aviation fuel.

HB23-1161 (Environmental Standards for Appliances) This bill will cut energy and water waste, reduce toxic mercury pollution, and reduce smog-forming pollution by setting tougher emission standards for new gas furnaces and water heaters sold in Colorado, phasing out the sale of mercury-containing fluorescent light bulbs, and setting new energy- and water-saving standards for common appliances. (More information available here.)

HB23-1233 (EV Charging and Parking Requirements) This bill will make it easier and more practical for more Coloradans, particularly those that live in multi-family buildings, to access the significant savings on fuel that EVs offer. The bill accelerates the implementation of new EV-ready building requirements currently being finalized by the state Energy Codes Board. It will increase the availability of EV charging options, particularly at multifamily apartment buildings and condos. It also standardizes the definition of “Disproportionately Impacted Community,” per the recommendations of the state’s Environmental Justice Action Task Force, to help guide the state’s efforts in targeting programs to the areas that they are needed most.

SB23-291 (Utility Regulation) Among many features aimed at addressing the long-term drivers of high utility costs, this bill will help accelerate building electrification and reduce Colorado’s dependence on natural gas by ending the practice of requiring utility customers to subsidize the cost of extending gas service to new construction. In addition, it requires the Public Utilities Commission to identify and remove barriers to building electrification in electric rates and remove charges for customers who choose to exit the natural gas system.

HB23-1134 (Requiring Electric Options for Home Warranties) This bill requires a home warranty service contract to allow a homeowner to replace gas-fueled equipment like furnaces with electric alternatives such as heat pumps, synergizing with the tax incentives in HB 1272 and federal incentives.

At the same time, SWEEP expressed disappointment at the General Assembly’s failure to adopt a sweeping land use proposal, SB23-213, designed to enable more housing choices near transit and jobs as a way to tackle Colorado’s affordability crisis and reduce transportation-related climate pollution.

SB23-213 (Land Use) This bill would have directed the state to complete a Housing Needs Assessment and local governments to develop Housing Needs Plans to increase housing production near transit and jobs and expand housing opportunities for all income levels. It also would’ve required cities in urban areas to legalize Accessory Dwelling Units and Middle Housing (duplexes, triplexes, and fourplexes) in single-family zones, and updated their zoning around rapid transit corridors to encourage more multifamily housing and walkable, mixed-use density. Lastly, state agencies were directed to align their planning and funding decisions with smart growth to support more energy, transportation, and water-efficient land use patterns. Learn more about the bill in SWEEP’s SB23-213 Bill Explainer here.

SWEEP would like to thank Governor Jared Polis, the Colorado Energy Office, Senate President Steve Fenberg, House Speaker Julie McCluskie, and the many legislators whose tireless efforts this session helped drive progress on energy efficiency and climate protection, particularly Representatives Mike Weismann, Junie Joseph, Tisha Mauro, Alex Valdez, Cathy Kipp, Jenny Willford, Chris deGruy Kennedy, Matthew Martinez; and Senators Lisa Cutter, Kevin Priola, and Faith Winter, who sponsored the above bills. Additionally, we thank the administration and legislators who helped spark a meaningful and timely conversation around addressing Colorado’s affordable housing and climate crises through land use reform — particularly Senator Dominick Moreno, Representative Iman Jodeh and Representative Steven Woodrow, sponsors of SB23-213. We look forward to continuing this important conversation next year.

SWEEP experts are available to assist with wrap-up coverage of the legislative session. Please contact us with any questions.


The Southwest Energy Efficiency Project (SWEEP) is a public interest organization promoting greater energy efficiency and clean transportation in Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming.