As major renovations are underway for Colorado Springs’ oldest high school, a state tax credit will help modernize its heating and cooling system.

Through Colorado’s Geothermal Energy Tax Credit Offering, the Colorado Energy Office announced $7.3 million in awards for projects throughout the state. The largest individual recipient of this funding, Palmer High will receive $5 million to install a thermal energy network connecting a new and existing building on its campus.

The award also marks the first in Colorado Springs.

Geothermal energy is heat beneath the Earth’s surface that is extracted and generated into renewable energy, which can control temperatures in buildings for costs lower than carbon energy sources like coal and natural gas.

The tax credit has been awarded since last year and used to fund feasibility studies and programs like ground-source heat pumps, bore-hole thermal energy storage systems and new HVAC systems throughout the state.

“Colorado is at the forefront of using the heat beneath our feet to heat our homes and save Coloradans money,” Gov. Jared Polis said in a press release.

“Geothermal is the future, and by tapping into this natural renewable resource, we are able to provide innovative clean energy technology to our businesses, schools, and local governments, while improving our air quality, decreasing pollutants, and saving people money.”

In Palmer’s case, the thermal energy networks will connect its buildings via underground pipes to share heat. With underground temperatures constant throughout the year, geothermal energy can potentially provide cost-efficient heating and cooling to buildings during the hottest and coldest months.

In the Energy Office’s project description, they noted that it “will show how geothermal can save taxpayer money by lowering energy costs in schools.”

Jennifer Hotaling, capital program manager for District 11, told Gazette news partner KOAA that these reduced energy costs can also allow the district to make greater investments into its classrooms.

“The reduction in CO2 emissions, the cleaner air in the school, the quieter system, all of those things support cognitive function in classrooms, (and) help our students do the best work that they can do in our schools.”

Recent talks to upgrade Palmer’s air conditioning date back to 2022, and roughly $30 million was set aside to install air conditioning in the main building. District leadership opted instead to earmark $100 million in overall renovations and upgrades for the school. Demolition of its east buildings began this summer and is slated to be completed in 2028.

The school district has been installing geothermal heating and cooling systems in its schools since 2007.

The funding for the tax credit comes from House Bill 23-1272, which concerns tax policy to reduce carbonization in Colorado. In addition to geothermal energy projects and production, tax credits are also available for individuals purchasing or leasing electric vehicles and industrial facilities reducing their greenhouse gas emissions.

“Heating buildings with fossil fuels is a leading source of greenhouse gas pollution in Colorado,” said Will Toor, executive of the Colorado Energy Office.

“We are seeing growing interest in geothermal heating and cooling across the state, not only to help us achieve our climate goals, but also to reduce energy costs, improve indoor air quality, and ease demand on the electric grid on hot summer days. We are proud to continue supporting these innovative projects, which show what’s possible using the heat beneath our feet.”

Other projects recently awarded funding include a thermal energy network installation to connect the Vail Public Library and the Dobson Ice Arena in Vail; network installation to retrofit two 1948 buildings into a wellness facility in Denver’s La Alma neighborhood; and a feasibility study on installing a ground-source loop thermal energy network to heat and cool municipal buildings in Steamboat Springs. 

A total of $35 million in tax credit reservations is available through the Geothermal Energy Tax Credit Offering program, with about $13.8 million dollars in funding remaining. The state Energy Office will open applications twice annually in the spring and fall through 2032 or until all tax credits are reserved. Applications are currently open for the fall 2025 funding cycle until Dec. 31.