Colorado is committed to clean energy, which means there are lots of Colorado solar incentives and tax breaks to help residents switch to solar energy. Solar power is on the rise in Colorado, and it currently ranks the 12th in the nation for solar power generation. In fact, 5.7% of the state’s electricity is sourced from solar systems.
Continue reading to learn more about the benefits of switching to solar energy if you live in Colorado, including the financial gains you’ll receive if you use tax incentives.
Why Go Solar in Colorado?
Annually, Colorado has 300 days of sunshine, making it an ideal state to generate solar energy. It’s also one of the sunniest places in America to reside. The state also led the way in renewable solar power and provides enough energy to power 452,783 homes.
To this date, there have been over 93,000 solar panel installations, and the renewable energy industry has created over 6,000 jobs.
From February 2021 to February 2022, electricity rates in Colorado spiked 8.1 percent, and inflation rates are affecting all areas of life. Plus, with Colorado homes costing 67% higher than the national average, switching to rooftop solar energy to power your home can save you money on electricity bills and put more into your pocket.
According to ElectricRate, there are 354 solar providers in the state, so you’re not short of choice to provide professional solar installation.
Colorado Solar Cost
In Colorado, the cost of the solar panel ranges between $3.20–$4.76 per watt, depending on the system size. With this in mind, a typical solar panel installation costs between $13,302 and nearly $18,000.
How Much Can You Save on Solar in Colorado?
Solar panels can save you around $35,000 over 20 years. This figure depends on a few factors. This includes the size of the solar energy installation, the efficiency of the solar panels, the side and orientation of your roof, and more.
The Best Solar Incentives, Tax Credits, & Rebates in Colorado
|Federal Solar Investment Tax Credit (ITC)||Colorado homeowners can receive a 26% discount when they purchase home solar systems.||December 31st, 2022|
|Colorado Solar Sales Tax Exemption||Colorado will exempt you from paying any state sales tax when you purchase a solar panel system.||None|
|Colorado Solar Property Tax Exemption||This incentive excludes the added value of a solar panel system from a home’s value in Colorado.||None|
|Colorado Net Metering||This program allows homeowners to offset their unused solar generation on the grid for their next energy bill.||None|
|Cash Rebates||EnergySmart Colorado: Receive a cash rebate between $400–$2,500, depending on your location.Holy Cross Energy: This cash rebate incentive is calculated per kilowatt, and you can save as much as $3,000.||None|
Federal Solar Investment Tax Credit (ITC)
The ITC is a tax credit that homeowners in Colorado (and other states) can claim on federal income taxes for a percentage of the amount of money it takes to run a solar panel system. To be eligible, the energy-saving system must be installed during the tax year and generate electricity for a home (or homes) in the United States.
Congress passed an extension of the ITC, providing a 26% tax credit for any solar panel system installed between 2021- and 2022. This also applies for systems installed in 2023, though systems installed before December 31, 2019, were eligible for a 30% discount. Unless Congress renews the ITC, this tax credit expires at the beginning of 2024.
Colorado Solar Sales Tax Exemption
Colorado is focusing on powering the entire state with renewable energy by 2050. The Colorado Solar Sales Tax Exemption means that you don’t have to contribute to any state sales tax when you purchase a solar panel system.
Colorado Solar Property Tax Exemption
The state of Colorado has implemented a Property Tax Exemption. This means that you don’t have to pay any property tax on the increased property value when you sell your home due to the solar panel installation adding value.
Colorado Net Metering
The net metering program allows you, as a solar panel homeowner, to connect your solar energy production to your local public power grid and sell any excess solar energy that you don’t use, and apply for credit to your future electricity bills.
Commercial Colorado Solar Incentives
Solar Incentives for Nonprofits and Businesses in Colorado
The City of Boulder’s NonProfit Solar Grants Program assists nonprofits and businesses in helping with their solar needs.
- The PACE Solar Rebate allows Boulder County businesses and nonprofits to receive up to $15,000 towards their solar power systems.
- The Nonprofit Solar Equity Grant ensures that Boulder County nonprofits are eligible for a $5,000 equity grant.
USDA REAP Grant
The Rural Energy for America Program provides grant funding and loan financing to small businesses and agricultural producers for renewable energy systems to provide improvements in their energy efficiency.
To be eligible for this program, you must be a United States citizen or reside in the U.S. after receiving legal permanent residence. You must also demonstrate that all funds from a loan or grant will remain in the county.
You can use the funds for producing the following:
- Wind generation and solar generation (both small and large)
- Ocean generation
- Biomass (such as solid fuels, biodiesel, ethanol, and more)
Federal Solar Tax Credit for Businesses in Colorado
If you choose to install a solar photovoltaic system before 2032, you’ll receive 30% off the total cost of the solar system, which includes equipment and labor. At the end of 2032, this figure will fall to 26%.
Key Takeaways: The Best Colorado Solar Incentives
The above Colorado solar incentives provide ample reasons to invest in a solar energy system to decrease your electricity bills. With plenty of sun all year round, this state also provides a range of tax incentives for installation, running fees, energy costs, and more. With that in mind, there’s never been a better time to invest in a Colorado solar panel system.
Colorado Solar FAQ
Is solar worth it in Colorado?
Yes. Colorado has a host of tax incentives to help you save money when implementing solar panel systems. Plus, there are specific benefits to nonprofits and businesses in the state.
How much will my electricity bill go down with solar in Colorado?
You can save an average of $1,750 per year. Over 20 years, that equates to a $35,000 saving.
How much does it cost for solar panels in Colorado?
A typical solar panel system costs between $13,302–$17,998, with the average house costing $15,650.
Can you get solar panels for free in Colorado springs?
There currently aren’t any companies providing free solar panels in Colorado. Although there are many tax incentives to take advantage of.
What solar rebates are available in Colorado?
The solar rebates include Federal Solar Investment Tax Credit (ITC), Colorado Solar Sales Tax Exemption, Colorado Solar Property Tax Exemption for Residential Renewable Energy Equipment, Colorado Net Metering, and two cash rebates.
How many homes in Colorado have solar panels?
There are nearly 30,000 Colorado homes with solar panels installed, making the state the 12th in the nation for solar power.
Do solar panels increase property taxes in Colorado?
Thanks to the state’s Property Tax Exemption, you won’t have to pay a higher property tax if you choose to install solar panels.
Today's Homeowner’s Solar Companies Rating Methodology
At Today's Homeowner, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.
Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated all of each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all of the solar energy companies on the market so you can have the information you need to make the best choice for your home.
We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:
- Plan Options (30): Do they provide a variety of plan options? We looked at the number of plans each solar energy company offered and the flexibility of adjusting the plan.
- Services offered (20): How many services are offered in each plan? We looked at whether the company manufactures its own solar panels, whether it contracts out installation, and what additional products each company offers.
- Trust (10): What do customers say after their solar panels are installed? Does this company offer a guarantee? We considered how satisfied customers are post-service if the company does what it says it will, BBB accreditation, and service guarantees.
- Prices (10): How reasonable are the costs of the plan or service in comparison to the industry average? We compared the costs of each company to competitors that offer the same solar energy services.
- Unique perks (10): Does the company offer discounts or special services such as financial incentives, rebates, or a useful mobile app? We looked for extras each company offers that set them apart from the competition.
- Customer Service (10): How is the customer experience when contacting the company? We considered the speed of response, weekend/holiday availability, and ease of communication through phone calls, email, and online chat functions.
- Nationwide availability (10): How many states does the company offer its services? Companies that operate nationally and in all zip codes are favored over those with limited availability.