IRA Resource Guide: Colorado Residents

Hypothetical Scenario: Combining IRA Funding with Xcel Energy Resources
 

 Hypothetical Scenario: Combining IRA Funding with Xcel Energy Resources (Income-Qualified)  

• What is it?
  • Weatherization refers to any improvements you make to your home to reduce the amount of energy required to heat and cool it. Weatherization activities may include working with a contractor to improve air sealing, adding additional insulation, upgrading doors and windows, and other capital improvements focused on the building envelope.
• Why do it?
  • Weatherization reduces the amount of energy waste – significantly reducing your costs to heat and cool your home and reducing your home’s carbon emissions. It can also decrease the cost of replacing your heating and cooling systems or installing solar in the future as it may reduce the equipment sizes needed to meet your electricity needs and maintain home comfort.   
• Get started with a home energy audit
  • First, sign up for a visit from Xcel Energy’s Home Energy Squad. Through the Home Energy Squad Plus visit, you’ll receive direct installation of a variety of energy-saving equipment, a professional energy audit of your home, and a full summary report of recommendations. You can receive up to a 30% federal tax credit for completing an audit. Use Xcel Energy’s Home Energy Squad report to prioritize weatherization projects and take advantage of additional IRA funding support.
• Already know which weatherization projects you need to complete?
  • Take advantage of Xcel Energy’s upfront rebates for insulation and air sealing. Each service type has its own rebate to stack up to $950 from Xcel Energy. Federal IRA funding offers a 30% federal tax credit up to $1,200 per year for weatherization material purchase costs (not installation costs) after rebates are applied. We recommend you ask your contractor to quote the labor and material costs separately to make it easier to apply for this tax credit. Note that this $1,200 cap applies to weatherization projects and electric panel upgrades done in the same year.

• What is it?
  • A heat pump is a single electric appliance that can replace either your traditional air conditioner, home heating system, or both. At the simplest level, heat pumps use electricity to move heat from one place to another. Heat pumps designed for cold climates can keep your home warm even when outside temperatures are below -20°F (Rewiring America). Homes in colder climates with heat pumps should still consider a backup heat source such as an electric resistance heater, furnace, or boiler to provide extra heat on the coldest winter days.  
• Why do it?
  • Heat pumps are three to five times more efficient than most current fossil fuel heating systems which often translates to lower operating costs (Rewiring America). Additionally, since heat pumps run on electricity, they’re often much better for the environment.
• Get started
  • Take advantage of one of Xcel Energy’s heat pump rebates (up to $2,200 as of March 4, 2024). Xcel Energy also offers a $600 bonus rebate to customers who install qualifying insulation and air sealing measures within six months of installing a qualifying space-heating heat pump. Xcel Energy’s rebates are in addition to federal IRA rebates and tax incentives. 
  • The IRA offers a 30% tax credit for heat pumps and electrical panel upgrades, capped at $2,000 for the heat pump and $600 for an electrical panel upgrade. The tax credit is calculated as 30% of the total cost after rebates have been applied.

• What is it?
  • Rooftop solar provides zero-carbon electricity by turning sunlight into electricity. Solar photovoltaic (PV) panels can be bought or leased for installation on your roof or in your yard.  
• Why do it?
  • The energy produced by rooftop solar is completely free (after initial purchase/lease of equipment and installation) and can result in significant energy cost savings over the lifetime of the equipment. Additionally, solar energy produces no carbon emissions.  
• Get started
  • An IRA tax credit can help cover up to 30% of project costs. For help finding a solar contractor, consider visiting the Colorado Solar & Storage Association’s (COSSA) Member Directory for a list of professional companies.
  • Consider also applying for Xcel Energy’s Solar*Rewards. Through this service, you receive annual payments in exchange for Renewable Energy Credits (RECs) for the energy produced by the solar system, and you can sell Xcel Energy the excess electricity generated from your solar system. This excess energy credit is held in your virtual bank to be applied toward future bills. Note: Xcel Energy highly recommends that the construction of your system not commence until after your application receives full approval from the Xcel Energy engineering team and all final agreements are fully signed.

• What is it?
  • Fully electric vehicles (EVs) have a battery instead of a gasoline tank, and an electric motor instead of an internal combustion engine. Plug-in hybrid electric vehicles (PHEVs) are a combination of gasoline and electric vehicles, so they have a battery, an electric motor, a gasoline tank, and an internal combustion engine. Thus, an EV switches fuel costs from gasoline at the pump to electricity through home, workplace, or public charging.
• Why do it?
  • In Xcel Energy territories, the standard cost of electricity for driving an EV is about $1 per gasoline gallon equivalent, but vehicles charged on Xcel Energy’s off-peak rates can be refueled for less than $0.75 per gallon equivalent. EVs are nearly three times as energy efficient as gasoline vehicles (Xcel Energy). As Xcel Energy’s electricity fuel mix increasingly relies on renewable energy sources, the emissions produced during vehicle operation are significantly reduced.   
• Get started
  • With IRA funding, you can receive a federal point-of-sale rebate of up to $7,500 for a new EV or up to $4,000 for a used EV.
  • Additionally, you can receive a Colorado tax credit of up to $5,000 with the purchase or lease of a new EV with an MSRP of up to $80,000. Coloradans are eligible for an additional tax credit of $2,500 for EV purchases with an MSRP of up to $35,000.