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Colorado is pushing hard to quickly approve a massive amount of renewable energy while the projects are still eligible for federal incentives.
The Republican tax and spending law that passed this summer drastically shortened the timeline for wind and solar projects to qualify for federal tax credits. Under the 2022 Inflation Reduction Act, developers had until at least 2033 to start construction; now they must begin before July 4 of 2026, or meet the abrupt deadline of commencing operations by the end of 2027.
This sudden change puts states in a tight spot: If wind or solar projects can’t get started within a year, they’ll be considerably more expensive. And power demand and utility bills are already rising nationwide.
All of these factors are putting pressure on state energy regulators, who typically move at an exceedingly deliberative pace, which is to say, very slowly. The usual months of back and forth and obscure bureaucratic wrangling could force customers to pay billions of dollars more, based on the new deadlines from the Republican majority in Congress.
In recent weeks, Colorado became one of the first states to try getting ahead of that damaging outcome, creating a playbook others could learn from. Gov. Jared Polis, a Democrat, kicked off the effort with an Aug. 1 letter urging state authorities to “eliminate administrative barriers and bottlenecks for renewable projects.” Polis, who campaigned on a strong clean energy platform, identified the immense financial stakes of the moment.
“Getting this right is of critical importance to Colorado ratepayers; by maximizing the utilization of tax credits while they’re available and reducing future tariff uncertainty, the State can avoid billions of dollars in additional energy costs for decades to come,” he wrote.
Taking up that call, key players in the Colorado energy establishment filed an official request with the state’s Public Utilities Commission on Aug. 22 to speed up decision-making for a “near-term procurement.” This effort would enable final approvals before mid-2026 for 4 gigawatts of renewables (which could include batteries), 200 megawatts of thermal power (like gas), and 300 megawatts that could be gas or energy storage. That’s a considerable amount for the state, which currently has around 5 gigawatts of wind and 4.5 gigawatts of solar installed.
On Aug. 27, the utilities commission approved an expedited timeline to decide on the joint proposal. Prospects seem favorable for its passage in the coming days, as it was put forward by the commission’s own staff, the Colorado Energy Office, the Office of the Utility Consumer Advocate, and the state’s largest utility, Xcel Energy.
Delivering on the faster schedule could save Xcel’s Colorado customers $5 billion over 20 years, said Michelle Aguayo, a spokesperson for the utility.
For several years running, solar, wind, and batteries have accounted for over 90% of new additions to the U.S. power grid. New turbines for gas-fired plants are more or less sold out until 2030. And all around the country, electricity demand is rising faster than it has in decades. For those reasons, experts still expect lots of renewable energy to be built even once subsidies expire.
But expediting projects now is still worthwhile. Federal tax credits can cut project costs by more than 30% — a fact that’s helping forge some unlikely coalitions.
“We are seeing, in states like Colorado, a coming-together of forces to try to execute on taking advantage of these incentives as quickly as possible,” said Sam Ricketts, a longtime climate policy advocate who recently cofounded S2 Strategies, a clean energy advisory firm. “Many of [these projects] are going to get built. It’s a matter of when: Will it be lower cost or higher cost?”
Indeed, it’s rare to find enthusiastic agreement between a monopoly utility and a ratepayer advocate, whose job is to contest utility spending that could raise bills for customers. In this case, the clear threat of higher energy prices from Trump administration policies has created an unusual alignment of interests. Ricketts refers to this catalyst as “the fierce urgency of commence construction,” the technical term for when developers can lock in the favorable tax credit rates.
Speeding up regulatory approvals is valuable on a number of levels. The typical pace of states’ energy infrastructure deliberations has been out of step both with the urgency of the climate crisis and the more recent spike in electricity demand. Faster approvals of cheap clean energy projects could push down prices compared to further reliance on expensive, aging coal and gas plants. But the exigencies of climate change, demand growth, or customer wellbeing haven’t prompted the kind of speed-up that Trump’s reworking of federal energy policy achieved.
That said, the acceleration will be limited in its scope. States will have to allocate time and effort to salvage just some of the energy benefits that had been promised for a decade to come. Aguayo, from Xcel, described this as a “one-time process in response to the current policy environment,” not a long-term change to the state’s “robust competitive resource planning process.”
Other states can learn from Polis’ timely response to the about-face in Washington. And, indeed, some are already taking action of their own. Maine fast-tracked its renewable procurement a few weeks after President Donald Trump signed his signature policy bill. California Gov. Gavin Newsom, a Democrat, signed an executive order Aug. 29 directing state agencies to do what they can to help clean energy projects meet the new federal deadlines.
As it stands, though, the list of states taking prompt action pales in comparison to those facing cost hikes on their wind and solar projects, which is to say, all 50. Eventually, state leaders across the country will have to grapple with a dire outlook: Trump came to office declaring an energy emergency, and then took one action after another to reduce the supply and raise the cost of American electricity production.
“Clean energy really is the lowest-cost, fastest to deploy resource now,” Ricketts noted. “We need more generation, and everyone knows it. … [But] the federal government is doing all it can to go in the wrong direction.”
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