Colorado is pausing plans to launch a pair of federally funded rebate programs worth $140 million to help residents cut their energy bills and climate impact.
The Colorado Energy Office was set to open applications for the rebates in the first half of 2025. If it had gone forward, low- and middle-income households could have qualified for thousands of dollars in discounts for heat pumps, induction stoves, electric service panel upgrades and additional projects to shift homes away from fossil fuels. Other rebates would have cut the cost of home energy-efficiency upgrades like packing an attic with insulation or installing weather stripping around doors.
The plans, however, are on hold due to the state’s difficulties working with the newly elected Trump administration, said Ari Rosenblum, a spokesperson for the Colorado Energy Office.
That means that Colorado's low-income residents may have to wait indefinitely to access money appropriated by Congress to help them shift away from planet-warming fossil fuels.
Those issues started after the White House froze funds authorized by the Inflation Reduction Act, the major climate law signed by former President Biden in 2022. Since then, Colorado has joined other states in court to challenge the Trump executive orders pausing the funding, claiming the president lacks the legal authority to cut off money for congressionally approved programs. Two federal courts have blocked the spending freeze and repeatedly ordered money to start flowing again.
Rosenblum said Colorado regained access to its funding earlier in March, and it's now moving ahead to launch the discount programs “as soon as possible.” The state, however, won’t commit to a launch date due to ongoing communication issues with the U.S. Department of Energy, which has also removed basic information about the programs from its websites.
“Much of the timeline is out of our control,” Rosenblum said.
A spokesperson for the U.S. Department of Energy did not immediately return a request for comment from CPR News.
An uneven rollout gets more complicated
The rebate programs could provide one of the most visible benefits of the 2022 Inflation Reduction Act. By signing the law, former President Biden created $8.8 billion in up-front discounts or refunds on new appliances or home energy-efficiency upgrades.
The goal was to help less-wealthy households cut climate-warming emissions, shrink their energy bills and improve indoor air quality. Last October, Colorado expected its upcoming Home Electrification and Appliance Rebates program would provide up to $8,000 in discounts for a cold-climate heat pump — a potential replacement for a natural gas furnace and an energy-efficient source of all-electric heating and cooling. A qualifying resident could receive up to $840 for electric stoves or clothes dryers.
A complementary program, known as Home Efficiency Rebates, would incentivize energy-efficiency projects for multifamily buildings and manufactured homes. If the initiative gets off the ground, the exact rebate amounts would depend on household income and expected energy savings.
Even though the federal government authorized the programs, it left each state to set up systems to administer the discounts. That’s led to an uneven rollout across the country.
“Some states have been running similar programs for years,” said Lowell Ungar, director of federal policy at the American Council for an Energy-Efficient Economy. “Other states historically have almost nothing and have to start from scratch to build up all the elements to make a successful program.”
Every state except South Dakota applied for federal funding for the rebates. Before President Trump took office, 12 states had launched some version of the federally funded programs, according to a U.S. Department of Energy spreadsheet since removed from the federal department’s website.
Colorado counts among those states since it greenlit a preliminary version of the federal rebate programs last October. While it hasn’t offered any consumer rebates, it spent $7.6 million of its federal grants to fund the state’s Weatherization Assistance Program, an existing set of free services to help low-income residents cut their energy bills.
Other states — including New York, California, North Carolina and Maine — have tapped federal dollars to offer direct discounts for income-qualified residents. California, however, briefly paused its program in late February due to the funding freeze imposed by the Trump administration. North Carolina and Maine continue to operate their programs, according to a recent report from CNBC News.
A lack of resources for low-income households
The federally funded programs could offer another tailwind for Colorado’s growing electrification industry.
DR Richardson is a co-founder of Elephant Energy, a Boulder-based company helping households ditch fossil fuels in favor of all-electric appliances. If the state eventually launches its planned home energy rebates, he said his business could offer its services to less wealthy customers currently unable to afford a new heat pump or induction stove.
“We have a lot of low-income customers who were really looking forward to this money,” Richardson said.
Richardson, however, wasn’t counting on the programs to sustain his startup. In Colorado, local governments like Denver and Boulder County offer rebates for all-electric appliances. State utility regulators also recently signed off on Xcel Energy’s $440 million Clean Heat Plan, which provides further discounts to help Colorado customers cut gas usage and shift to all-electric appliances.
Most Colorado households can access those programs and incentives. Richardson said that’s great for his business, but the federally funded rebates are critical to ensure low-income households can access the same services.
He’s also frustrated it’s taken Colorado so long to launch the rebates. If the programs were already up and running, he said small businesses like his could have greater clarity about whether their potential customers could expect state financial assistance.
“I just wish everybody had moved a little faster,” Richardson said. “As a small business, uncertainty is really hard to plan for.”
