Clean Energy Tax Credits: Creating Jobs, Cutting Costs, and Protecting Our Local Economy in Colorado

Congress is considering a devastating domestic policy bill that will slash programs and investments in working families in order to give tax breaks to the very wealthy. If passed into law, this economic disaster will undermine investments in workers and new energy infrastructure across the country–making everything more expensive, killing jobs, and preventing America from building a secure and independent energy future.

Federal tax credits for energy development are supporting dozens of projects in Colorado and could create thousands of good-paying jobs for working families in our state.

Tied to prevailing wage and apprenticeship utilization requirements, these powerful tax credits such as the technology neutral Investment Tax Credit (ITC) and Production Tax Credit (PTC), are supporting good local jobs for working families on a broad range of energy projects, including geothermal, nuclear, carbon capture, battery storage, hydropower, solar, and wind projects. Other provisions include an ‘elective pay’ or ‘direct-pay’ mechanism so that tax-exempt public and nonprofit entities–including schools and municipalities–can benefit from these tax credits, and a bonus tax credit for projects that meet domestic content standards.

Crucially, these tax credits are protecting lower costs for ratepayers and making Colorado’s grid more reliable by diversifying our homegrown energy portfolio. As demand grows for energy in Colorado, we need to bring diverse sources of clean energy to our state to strengthen America’s energy security. Through the tax credits, utilities are already investing in new sources of energy that boost our state’s economy with local prevailing wage jobs and career opportunities for apprentices. 

Projects supported by these critical investments are already bringing clean energy online and putting Colorado workers on the job. 

Statewide, there are 109 utility-scale projects in the development pipeline that could be eligible for federal energy tax credits, representing over 53,100 jobs, $54.9 billion in investment, and 31,500 megawatts of power generation and/or storage to supply Colorado homes and businesses with homegrown electricity. 

Repealing tax credits could increase the average family’s energy bill by as much as $400 per year within a decade, according to several studies published this year.

“In 2020, 34 million households reported difficulties in paying their energy bills or said they kept their homes at unsafe temperatures because of cost concerns. 

But many power companies and analysts argue that the clean electricity tax credits are essential for keeping a lid on power prices in the near term. That’s because companies were already planning to build a bunch of wind, solar and batteries in the next few years, which account for 95 percent of electric capacity waiting to connect to grids, and utilities can pass through savings from the tax credits for these projects to consumers. The Edison Electric Institute, a utility trade association, estimates that the tax breaks would save Americans $45 billion on their bills through 2031."

“Electricity Prices Are Surging. The G.O.P. Megabill Could Push Them Higher” The New York Times 

For communities and businesses in Colorado, abundant and affordable electricity is critical. For working families, a pipeline of good jobs is the difference between a middle-class livelihood and falling further behind. These investments have a real impact across Colorado and the country. As our region grapples with rising energy demand and Colorado families feel the crunch of inflation and high energy bills, the good-paying jobs and new energy sources these projects provide will boost security for working families and strengthen our state’s economy.

The federal incentives with associated labor standards include: 

  • Investment Tax Credit (ITC; § 48)

  • Production Tax Credit (PTC; § 45)

  • Clean Electricity PTC (§ 45Y)

  • Clean Electricity ITC (§ 48E)

  • Carbon Oxide Sequestration Credit (§ 45Q)

  • Zero-Emission Nuclear Power Production Credit (§ 45U)

  • Qualifying Advanced Energy Project Credit (§ 48C)

  • Alternative Fuel Vehicle Refueling Property Credit (§ 30C)

  • Clean Hydrogen PTC (§ 45V)

  • Clean Fuel Production Credit (§ 45Z)

  • New Energy Efficient Homes Credit (§ 45L)

  • Energy Efficient Commercial Buildings Deduction (§ 179D)