Will homebuyers in Colorado be priced out by solar and EV-ready building codes?

Colorado is soon to implement House Bill 1362, a law passed in 2022 that directed the state to create an energy codes agency to develop mandatory codes for clean energy and energy efficiency adoption. 

Beginning July 1, in a rolling fashion across different towns and cities in the state, new buildings will be required to be constructed in a way that makes them readymade for the clean energy transition. The code requires that buildings have prewiring for on-site solar and electric vehicle charging infrastructure. The codes apply to single-family and multi-family homes, as well as commercial buildings.

Despite the long-term cost savings realized from energy-efficient appliances required by the code, home builders in the state are complaining that the moderate cost increase will “price out” many buyers.

“While we share the goals of reducing energy use and emissions, we must balance these goals with all housing costs,” said Ted Leighty, chief executive officer Colorado Association of Home Builders.

While Colorado construction firms likely don’t support any measure that adds to their costs, the arguments that EVs, solar and energy efficiency are neither desired nor cost-effective stand on shaky ground.

The new code is a forward-looking requirement that is expected to save home and business owners considerably in the long run. While preparing a home for an EV charger costs about $1,000 in the new construction process, it can cost up to $4,000 when retrofitting to an existing home, said Adam Berry, program manager, codes and efficiency, Colorado Energy Office.

Berry said the new building codes were negotiated down to being “EV-capable lite,” merely requiring a ground conduit and a higher capacity main electric panel, with wiring able to be added later on as EVs are adopted.

The Colorado Apartment Association claimed only about 1% of surveyed renters said they want an EV charger right now, yet the Colorado Automobile Dealers Association showed that 10.5% of new vehicle sales in Colorado in 2022 were electric vehicles.

State officials in Colorado have set aside $2 million in grant money for local governments to implement and administrate the new codes. The state is also directing hundreds of millions of dollars in incentives to buy new and used EVs, heat pumps and other energy efficient appliances.

The City of Denver is a leader in this regard, offering several rebates including $1,500 for a heat pump, $3,500 for a cold-climate heat pump, $3,500 for ground source heat pumps, $1,000 for heat pump water heater, and $300 for a standard electric bike, $500 for a cargo e-bike, and up to $1,200 for income-qualified buyers. Other cities and municipalities as well as utility companies offer clean energy and energy efficiency incentives, as well.

These incentives can be combined with those offered the state’s major utility Xcel Energy, including $1,500 for an efficient air-source heat pump, $2,000 for a cold-climate heat pump, and $1,300 for home wiring for a Level 2 electric vehicle charging station.

Additionally, Colorado offers among the highest EV tax incentives in the United States. Beginning July 1, the Colorado electric vehicle tax credit rises from $2,000 to up to $5,000. This can be added to the federal EV tax credit, which offers up to $7,500 in tax credits, combining for an impressive $12,500 in tax credits for the purchase of a new electric vehicle.

The Colorado Sun reported that the next round of code updates may be more contentious. While the new energy codes still require pathways for both natural gas and electricity service to buildings, the state board in 2024 is required to write “low carbon” codes.

This may spark a battle on whether new construction homes should be built electric-only, with no natural gas hookups allowed. While builders may welcome the lowered cost of having to integrate only one energy source, the natural gas industry would likely have a combative stance towards such requirements.