Colorado Warms to Geothermal Energy, Awards $14.4M in Project Funding

DENVER, Colo. — “The heat beneath our feet.” That’s how Colorado Gov. Jared Polis referred to geothermal energy when he made his recent announcement of $14.4 million in funding to support geothermal heating projects in his state.

The funding from the Geothermal Energy Grant Program and Geothermal Energy Tax Credit Offering will enable awardees to plan and install geothermal heat pumps and thermal energy networks that deliver low-cost, energy efficient heating and cooling to homes and buildings around the state.

“Geothermal is a clean energy option that will help save Coloradans money and protect our state for future generations,” Polis said.

The Colorado Energy Office made a total of 11 awards through the grant program and five through the tax credit offering. Some projects qualified for both incentives based on project eligibility. 

This round of GEGP provided grants for single-structure geothermal, thermal energy network studies, and thermal energy network construction projects.

GETCO recipients receive a refundable tax credit reservation that can be deducted from their income tax liability. Cycle two of GETCO provided tax credit reservations for geothermal electricity or thermal energy network studies and project installations. 

CEO Executive Director Will Toor said geothermal energy “provides a clean, firm energy source for both buildings and electricity generation.”

“Geothermal heat pumps and thermal energy networks reduce greenhouse gas pollution while improving indoor air quality and saving Coloradans energy and money on heating and cooling costs. We are pleased to support such a diverse array of geothermal projects around the state through these two key incentive programs,” Toor said.

The chosen projects utilize geothermal energy in a variety of ways. For example, the City and County of Denver will use its GETCO award to study the creation of a cutting-edge, multisource district thermal system that provides heating and cooling through a shared water loop for 5.5 million square feet of municipal buildings. 

Liberty School District will apply its funding to install a geothermal energy network for two buildings at Liberty School. This will replace a 60-year-old hydronic heating system with three cost-efficient heat pumps that will add cooling, improve ventilation, and enhance indoor air quality for better health and comfort.

The Karval School District will use its $225,000 grant to replace its failing HVAC system at its K12 school with a high-efficiency geothermal VRF system to address heating failures, add cooling, and improve indoor air quality. Due to the outdated electrical infrastructure, a costly upgrade to a three-phase power system is required, significantly increasing project expenses. The project is leveraging federal and state grants to make these critical improvements affordable while reducing long-term energy costs and emissions

And the Town of Bayfield will upgrade its 4,621 square foot Senior Center with a ground-source heat pump system with ten 500-foot deep close-loop boreholes. This project will be bundled with an Energy Performance Contract and will help reduce carbon emissions, improve indoor air quality, and enhance energy resilience while serving as a model for electrification in the community.

This announcement marks the second round of funding for GEGP and GETCO. For the first cycle of GETCO, SIMCOE LLC received a tax credit reservation of $1 million for the Florida Mesa Geothermal Project to support the development of up to 20 MW of geothermal electricity in Southwestern Colorado. This funding will help SIMCOE LLC determine the heat source in the project location.

The current application cycle for GETCO opened April 1 and will close June 30. GETCO applications will open twice annually through 2032 or until all $35 million in available tax credit reservations have been allocated. 

Last May, the Polis administration also announced $7.7 million in awards for the GEGP. Applications for the third GEGP funding round, which is the last planned round of funding for the program, closed March 31. The Colorado Energy Office expects to announce awardees in early summer. 

In addition to these funding opportunities, the Colorado Heat Pump Tax Credit can help reduce the cost to install eligible heat pump technology, including geothermal heat pumps and thermal energy networks, through 2032.

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