The Colorado Energy Office opened its first competitive application cycle for the state’s Geothermal Electricity Tax Credit Offering (GETCO).
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Colorado is rapidly transitioning to clean energy for electricity generation, which is a leading source of greenhouse gas pollution in the state. Colorado utilities are currently on track to reduce emissions from the power sector more than 80% by 2030 through a mix of clean energy sources, including wind, solar, and battery storage.
A recent CEO-commissioned study found that the lowest cost pathway to achieve 100% clean electricity in Colorado by 2040 will rely on geothermal, alongside wind, solar, storage, and clean hydrogen.
This tax credit is part of Colorado’s larger strategy to develop geothermal technology in the state, which also includes the heat pump tax credit and a $12 million investment through the Geothermal Energy Grant Program.
Eligible utilities, private businesses, local governments, and public-private partnerships can apply for two different types of tax incentives through this program: an investment tax credit (ITC) for exploring and developing geothermal electricity resources and a production tax credit (PTC) for producing geothermal electricity.
The ITC can cover up to 30%-50% of eligible costs for selected projects, not to exceed $5 million per project. A total of $35 million is available in ITCs through 2032.
The PTC provides a $0.003 credit for every kilowatt hour of geothermal electricity produced, up to $1 million per entity per year through 2032.
In awarding tax credits, CEO will prioritize projects based on workforce development potential; community resilience benefits, especially in rural or isolated communities; and proximity to disproportionately impacted and just transition communities and an ozone nonattainment area.
The first application cycle is open until June 30, 2024, at 5:00 PM MT. Application materials and information about how to apply are available on the GETCO webpage.
Applicants must apply through the online grant portal. Going forward, CEO will open applications twice annually in April and October until 2032, or until all tax credit funding is awarded. ■