When it comes to clean energy, President Donald Trump and Colorado aren’t just on different pages — they might be said to be on different planets.
By 2030, Colorado aspires to put almost a million electric vehicles on the road, cut its greenhouse gas emissions 50%, and shut down its remaining coal-fire power plants.
The state also aims to have 100% clean energy generation by 2040 and net-zero carbon emissions by 2050, while adding tens of thousands of rooftop solar arrays and electric heat pumps in energy efficient buildings.
To which Trump, in an executive order, said:
“For too long, the Federal Government has forced American taxpayers to subsidize expensive and unreliable energy sources like wind and solar. The proliferation of these projects displaces affordable, reliable, dispatchable domestic energy sources, compromises our electric grid, and denigrates the beauty of our Nation’s natural landscape.”
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Read moreThe message in the order is very clear, said KC Becker, the CEO of the Colorado Solar Energy and Storage Association, a trade group.
“Just the name of the order — Ending Market Distorting Subsidies For Foreign Controlled Energy Sources — is so inaccurate and it tells you that Donald Trump isn’t prioritizing what he ought to be,” she said.
Becker, the former Colorado House Speaker, was sponsor of House Bill 1261, or the Climate Action Plan, the 2019 law that set the state’s greenhouse gas reduction targets and called for “clean energy plans” from all the state’s utilities.
The Trump administration’s One Big Beautiful Bill Act and the president’s executive order will deal a blow to Colorado’s statutory climate and clean energy goals.
The state is already behind on its efforts to meet the 2030 target for a 50% reduction in greenhouse gas emissions over a 2005 baseline, and the end of subsidies for EVs will crimp the likelihood of getting 1 million on the roads by that year.
Coloradans will also lose access to credits for heat pumps to replace gas-fired furnaces, and other energy efficiency home improvements.
“It is too soon for us to be able to completely assess the impacts,” said Will Toor, executive director of the Colorado Energy Office. “They’re clearly all negative. We know that they’re going to have the effect of making energy more expensive for consumers.”
The state remains on pace to close its last six coal-fired power plants by 2030, allowing the state’s utilities meeting their 2030 greenhouse gas reduction target of 80%, but once again the Trump administration is seeking a delay citing concerns of grid reliability.
Nevertheless, state officials, industry representatives and energy analysts say the OBBA, as the act is known, and other Trump administration’s actions will not stop Colorado’s clean energy transition.
EVs will still be sold albeit at a slower rate. Wind and solar generation will still be built although with a higher price tag and energy efficiency improvements will be made with the support of the state, local and utility initiatives.
All thanks to a suite of state programs, policies, laws and mandates to utilities promoting clean energy and energy efficiency.
“Colorado’s energy industry and goals will ultimately weather the disastrous impacts of this bill, in part, because Colorado has already invested basically years and years in the right of policy leadership and business attraction,” said Emilie Olson, a principal at the energy industry trade group, Advanced Energy United.
One unavoidable impact for Colorado households, however, is going to be higher energy bills, according to several analyses of OBBA.
Energy Innovation estimates the act will increase electricity bills in Colorado by 14% to 21% with annual bills rising $170 by 2030 and $310 by 2035.
An analysis by the REPEAT Project — a collaboration between Princeton University and energy consultants Evolved Energy Research — estimates the average U.S. household energy costs will increase by about $165 a year in 2030 and by more than $280 by 2035 — an increase of 7.5% in 2030 and more than 13% in 2035.
What drives this the most is removal in the act of energy tax credits for utility-scale energy projects.
What’s being lost
The act accelerates the phaseout of two tax credits for wind and solar projects. Projects that begin before July 5, 2026, and are placed in service by the end of 2027 will still be eligible.
The Investment Tax Credit allows a deduction for 30% of the cost of a project and the Production Tax Credit provides a 2.75-cent deduction for every kilowatt-hour a facility generates in the first 10 years of operation.
The problem is that wind and solar, especially solar, has been the cheapest and quickest electricity generation to build. In 2024, 61% of all new utility-scale generating capacity was solar, with wind accounting for another 10%.
In the first four months of 2025, 95% of the 12 gigawatts of capacity installed was solar and wind. One gigawatt can power about 90,000 households.
The investment and production tax credits can account for 30% to 50% of project costs. “So it’s the equivalent of raising taxes on new electricity supply by about 30% to 50%,” Jesse Jenkins, a Princeton engineering professor and REPEAT principal, said in an email.
That will make some projects more expensive and some no longer economic. Enverus, an energy industry consultant, estimates that nationally only 30% of proposed solar projects and 57% onshore wind projects are expected to survive.
Tax credits for geothermal, battery storage and commercial solar projects were not cut.
Colorado has about 20 gigawatts of generation, with another 15 GW projected by 2030 (led by state-approved clean energy plans by Xcel Energy and the Tri-State Generation and Transmission Association).
The loss of the tax credits will trim that by 4 GW, or more than a quarter, according to an analysis by clean energy consultant Energy Innovation. Without the credits the prices of the projects that are built will rise and find their way into electricity bills.
In 2023, Xcel Energy increased its proposed clean energy plan to 7.1 GW in part, it said, to capture $10 billion worth of federal tax credits. The Colorado Public Utilities Commission trimmed the plan to 5.8 GW.
What will the loss of those tax credits mean? “Xcel Energy is reviewing the final law,” the company said in a statement. “We will continue to work with federal and state partners to understand the full impact of the new law and will provide further updates during our July earnings call.”
Xcel Energy’s top executives will review the company’s performance on a call July 31 with stock analysts and investors.
When asked about the impact OBBA may have on the 1.4 GW of wind, solar and battery storage it plans to build, Tri-State spokesman Lee Boughey said in an email that the association is awaiting final approval from the PUC on its plan to bid projects.
“With approval from the commission, we would then work to procure the resources approved by the commission,” Boughey said. Tri-State is a power wholesaler serving 40 electric co-ops in four states, including 18 in Colorado.
The story is similar for residential rooftop solar, where the 30% tax credit for new installations is set to expire at the end of this year.
Most of the residential photovoltaic, or PV, systems being installed are between 5 kilowatts and 10 kilowatts in size and range in price for a buyer from $14,000 to $35,000, depending on the size and design.
So after this year, a system costing $14,000 with the federal credit will cost $20,000.
Residential solar installers faced a tough market in 2024 due to inflation and high interest rates with some companies going out of business. Now they face the loss of the federal credit.
“The residential market is certainly going to be hit,” the solar and storage association’s Becker said. “The battery storage tax credit doesn’t go away. So that’s something certainly that the residential market can continue to leverage.”
Installing home batteries is becoming a bigger market, Becker said. The federal tax credit will defray 30% of the cost.
The tax credit was an “engine for ownership of solar panels on homes,” said Ian Skor, owner of Sandbox Solar, a Fort Collins solar installer.
“So the question now is how are we as a company, as an industry, as an independent contractor, going to try to make efficient processes, to deliver that 30% value, to keep prices the same?” Skor said.
One important measure for a homeowner is how long a PV system takes to pay back the investment. On that score the loss of the credit only extends the payback period three years to 13 years from 10 years, Skor said.
“So, that’s about where the solar industry was at, probably, 10 years ago, and we still had a successful solar industry,” Skor said. “But the market is definitely going to shrink.”
Some state and local programs will help bolster the market. Fort Collins offers a rebate of up to $1,000 for home solar and Denver and six neighboring local governments offer the Solar Switch program.
The program matches homeowners and installers and by packaging many projects it has been able to get 10% to 15% discounts.
Between now and the end of the year, however, Skor said he expects installers will be flooded with jobs.
“We’re going to see an insane spike in demand over the next six months,” he said. “People who have been wavering for years all of a sudden want to close on the projects.”
About those EV tax credits
The $7,500 federal tax credit for EVs is going away even faster, ending Sept. 30. Until then a buyer can get the federal credit plus a $3,500 state credit for a $11,000 saving.
The state credit will stay until the end of the year and were scheduled to step down to $1,500 for 2026. If the state’s budget woes continue, it — along with other clean energy incentives — could be cut in half, which would take the Colorado EV credit to $750 for the 2026 calendar year.
Still, other state programs are available. Vehicle Exchange Colorado, offers income-qualified Colorados who trade-in a combustion-engine vehicle up to $6,000 for the purchase of a new electric vehicle or $4,000 for a used EV or lease.
And while OBBA repeals the $1,000 tax credit for home EV chargers, the state “Charge Ahead Colorado” program still provides grants of up to $250,000 for community, business and local governments to install chargers.
In 2021, Senate Bill 260 set up a Clean Transit Enterprise, funded by a fee on package deliveries, to support a broad array of transportation projects such as the purchase of battery-powered buses and charging infrastructure. Since 2022, the fee has raised $38 million.
“There’s a bunch of tools that we have available to use to keep things headed in the right direction,” said Travis Madsen, transportation program director for the nonprofit Southwest Energy Efficiency Program.
So how will Colorado EV sales be affected by the loss of federal tax credits?
“We had a rush in late March prior to the tariff deadline for Mexico and Canada,” Matthew Groves, CEO of the Colorado Auto Dealers Association, said in an email. “I am not expecting as much of a rush in Colorado leading up to 9/30.”
The federal credit has, Groves said, many stipulations that limited the number of people who were able to take advantage of it.
“Colorado still has a nominal state tax credit and a healthy vehicle exchange program. Other states don’t have these,” Grove said. “We expect them to become a competitive advantage by comparison to other states in the national market.”
Tax credits, Grove said, are meant to incentivize a behavior until it becomes mainstream. EVs made up 31.4% of Colorado sales in the fourth quarter of 2024 and in the first quarter of 2025 over 25%. “I think this qualifies as mainstream,” he said.
Also gone in 2026 are home energy efficiency tax credits, $2,000 for heat pumps and hot water heaters and $1,200 for energy efficiency upgrades.
“That’s really a small sliver of the incentives available in Colorado, especially if folks are lucky enough to live in the Xcel service territory or have access to Denver’s rebates,” Madsen said.
In 2021, natural gas utilities in Colorado were mandated by Senate Bill 264 to cut their greenhouse gas emissions by 22% over 2015 levels by 2030 by developing “clean heat plans.”
Xcel Energy’s state-approved plan has $440 million in energy efficiency and electrification programs over three years. It includes heat pump rebates, with a bonus in 2025, of up to $2,500 for air-source heat pumps and $3,300 for ground-source heat pumps.
There is a $2,500 rebate for heat pump water heaters and Xcel Energy still offers a $500 rebate for home EV chargers.
Xcel Energy isn’t alone in offering rebates. Fort Collins offers a range of rebates including up to $600 for heat pumps; Boulder County has heat pump rebates of up to $400; and Holy Cross Energy, a Glenwood Springs-based cooperative, offers rebates of $3,000 ($7,500 for income-qualified households) for a range of energy efficiency improvements.
The Colorado Energy Office is working on final approval from the U.S. Department of Energy for two home energy rebate programs, Josh Chetwynd, an agency spokesman said in an email.
Tri-State, through six of its Colorado cooperatives, is offering a program providing low-interest loans for energy efficiency projects repaid as part of the electric bill. Xcel Energy has also proposed a $25 million on-bill-financing pilot.
“The big, beautiful bill is going to make the efficiency work we’re doing even more important,” SWEEP’s Madsen said. “I’ve seen some projections that electricity bills might go up 30%. … So one way to address that is to invest more in energy efficiency.”
Toor, the energy office executive director, said the shifting sands of politics is something with which Colorado just has to deal.
“In the first two years of the Polis administration, when we were doing a lot of the early work, setting emissions goals and really accelerating the clean energy transition, we faced a federal government under Trump that was not supportive,” Toor said.
“Then we had the Biden administration, where the federal government was very much rowing alongside,” he said. “Now we are back where the federal government is certainly not helpful. So it is a new set of challenges, but I think we will still continue to move forward as a state.”