A Pathway to Pollution-Free Buildings 2026 Report
Xcel Energy can help Colorado achieve its clean energy future with greater investment in efficient electric buildings.
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A new report, A Path to Pollution-Free Buildings 2026—authored by Western Resource Advocates, NRDC, and SWEEP—outlines the greater investment in efficient electric technologies that is needed to decarbonize Colorado’s largest gas utility and help the state meet its climate goals while avoiding unnecessary costs.
Colorado’s nation-leading 2021 Clean Heat standard set an ambitious goal for the state’s gas utilities to reduce greenhouse gas emissions to at least 22 percent below 2015 levels by 2030. Since Xcel Energy, the state’s largest gas utility, began implementing its first Clean Heat Plan in 2024, it has provided incentives to tens of thousands of customers to install electric heat pumps and heat pump water heaters and improve the efficiency of their homes. While the program has been largely successful so far, Xcel will need to accelerate its efforts to meet the 2030 clean heat goal.
In this report, we present a detailed Pollution-Free Buildings (PFB) portfolio for Xcel that would drive significant emissions reductions to meet the 2030 goal and establish Colorado as a national leader in building decarbonization. We also provide recommendations to help regulators shape clean heat programming—and related utility policies and investments—to maintain affordability for customers.
Xcel has made important progress but is off track to meet its 2030 goal
The first Clean Heat Plan covered 2024 to 2027 and established robust budgets and programs to support beneficial electrification and efficiency in Colorado homes and businesses. Xcel has seen rapid customer uptake, but, despite these positive initial results, Xcel’s total 2030 emissions are currently projected to be 4 percent higher than its 2015 baseline and far higher than the goal in statute (a 22 percent reduction below 2015 levels).
Xcel must increase efforts to promote electrification and efficiency
Our analysis finds that Xcel can still meet the 2030 clean heat goal, despite the large gap between the goal and projection. The report shows that this is achievable if Xcel prioritizes and accelerates the adoption of efficient electric heat pumps and heat pump waters heaters and improves the energy efficiency of homes and businesses. The PFB portfolio exclusively focuses on energy efficiency and electrification, the cheapest forms of building decarbonization, and it finds that Xcel can achieve its 2030 goal by accelerating the replacement of gas appliances with electric equivalents at the end of their lives. The portfolio also focuses on incentives for measures consistent with whole-building electrification, particularly where gas system investments can be avoided.
Clean Heat programs should be designed to maintain long-term affordability
The report finds that, to meet the 2030 goal and maintain affordability, Xcel and the commission should:
- Align clean heat programs with reducing the size and cost of the gas system.
- Ensure Clean Heat programs are provided to low- and moderate-income customers and expand the funding of those programs to protect customers who are more vulnerable to future rising costs.
- Expand complementary programs and maintain electric service affordability.
- Manage and reduce gas system capital costs.
This Clean Heat Plan provides a critical opportunity to avoid unnecessary costs, improve customer affordability, and invest in the clean energy system of the future. The PFB portfolio charts a path forward to do exactly that while meeting Colorado’s climate imperative.
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