In a June 16 letter to key members of the U.S. Senate Finance Committee and Colorado’s congressional delegation, Governor Polis and Colorado Energy Office Director Will Toor highlighted the dire consequences of repealing these tax credits. They project that losing the credits would cause household energy bills to jump by approximately 10 percent, or roughly $180 annually per household by 2030. This is particularly concerning as nearly 30 percent of Colorado residents are already considered energy burdened, meaning a large portion of their income goes towards utilities. The elimination of the IRA’s electric vehicle credit would also drive up car-buying costs.
Economic Impact and Job Losses
Beyond individual household costs, rolling back these energy tax credits poses a significant threat to Colorado’s long-term economic health. The state stands to lose an estimated 10,800 new jobs and see its GDP reduced by nearly $1.78 billion by 2030. The letter emphasizes that such cuts would “jeopardize the more than $19 billion in IRA-related funding and investment flows projected for Colorado,” undermining the state’s progress toward energy independence and economic resilience.
Congressional Budget Proposals and Their Threat
While the Senate Finance Committee’s June 16 budget reconciliation bill proposes a slower repeal of some IRA credits compared to the House-passed version, it still includes significant cuts. For instance, the IRA’s clean vehicle credit would end just 180 days after the bill’s enactment, and credits for solar and wind production would begin phasing out as early as next year.
National Implications and Climate Goals
Nationally, the IRA’s direct-pay and transferable tax savings have already facilitated over $30 billion in private sector clean energy investments in 2024. The IRA was designed to combat climate change and bolster domestic clean energy production through various incentives, including those for solar, wind, electric vehicle purchases, and energy-efficient buildings.
Initially estimated to cost $270 billion over a decade, the Congressional Budget Office recently revised this estimate to $825 billion through 2035.
A Critical Juncture for Energy Resilience
With Colorado facing a potentially dangerous wildfire season, Governor Polis and Director Toor assert that “this is not the moment to consider cuts to essential investments in energy resilience and grid modernization.” Their plea echoes similar concerns from other states, including North Carolina, where Governor Josh Stein warned that repealing IRA energy tax credits could lead to a 13 percent increase in residential electricity prices and a 20 percent hike for businesses, costing the average household an extra $200 per year.
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