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Written by Tamara Jude + 1 other
Reviewed by Roger Horowitz Updated 06/27/2024
Tamara Jude is a seasoned content writer with more than seven years of experience in research and content production. She specializes in the solar energy, home warranty, and windows categories. Her interest in home improvement began as a child, when she regularly completed home projects alongsid…
Roger is the Director of Go Solar Programs at Solar United Neighbors. He has been in the solar industry for more than three years after a decade of entrepreneurship. With a background in community organizing, Roger is dedicated to empowering communities to go solar.
Roger combines his passion…
Colorado has been committed to clean energy production for more than 20 years. It was the first state to create Renewable Portfolio Standards (RPS) and to begin installing solar shingles. So Colorado is a great state if you are considering buying solar shingles. Most recently, the state government mandated that utility companies with 500,000 or more customers move to 100% clean energy by 2050.
Colorado offers one of the best net metering programs in the country, plus numerous incentives to lower solar system costs and help residents make the switch. According to EcoWatch, the average cost to install solar panels in Colorado is between $13,450 and $21,520, so homeowners should consider incentives to reduce this price. Our guide breaks down available incentives and rebates in Colorado, plus offers recommendations for the best solar panel companies in the Centennial State.
Get Estimates from Solar Experts in Your Area Totally free, no phone call requiredColorado’s incentive programs allow homeowners to invest in the best solar panels at an affordable rate. It has sales and property tax exemptions, plus additional city-based incentives to reduce your overall solar panel system costs . The list below includes the top solar incentives for Colorado residents.
Colorado’s sales tax exemption policy allows homeowners to avoid paying Colorado’s 2.9% state sales tax on their solar installation costs and equipment. You may still have to pay local city or county taxes, such as in Denver or Fort Collins. We recommend checking your city’s local sales tax policies. More resources: Check the Colorado Department of Revenue website for full details about the tax exemption for solar systems.
Installing a solar system boosts your property value . According to the National Renewable Energy Laboratory (NREL), your home value increases by $20 for each $1 saved on annual electricity bills. For example, a solar energy system that saves you $400 annually will add $8,000 to your home’s value. Higher property value usually means more property taxes owed on your home. However, Colorado’s property tax exemption prevents homeowners from having to pay taxes on this additional value. More resources: Review the Colorado Department of Local Affairs to learn more about the property tax exemption.
Net metering programs vary between each company but offer excellent benefits. Xcel Energy and Black Hills Energy are two of the state’s largest investor-owned utility companies (IOUs) and offer net metering program details on their websites.
More resources: Visit the Database of State Incentives for Renewables & Efficiency (DSIRE) to learn more about Colorado’s net metering program. We recommend checking with your local utility company for additional details on its net metering program.
Cities and municipalities offer additional rebate programs to their residents. We’ve highlighted a few programs below.
Some areas also offer special programs for low-income families to help make solar more accessible, such as the following:
More resources: Check DSIRE for a complete list of rebates and incentives offered in Colorado.
The federal solar investment tax credit (ITC) provides Colorado residents with additional savings on their solar installation costs. You could receive up to 30% of your installation cost as a tax credit. This credit applies to your federal tax liability to reduce or eliminate your owed balance. If you don’t have any liability or have remaining credit, the balance can be rolled over to the next tax year.
In 2022, Congress approved an ITC extension until 2034. It is now known as the Residential Clean Energy Credit (RCE). You’ll qualify for the credit if your system is installed between 2022 and 2032. The credit reduces to 26% in 2033 and drops to 22% in 2034.
Many of our survey takers do. Of the 1,000 recent solar buyers we surveyed in early 2024, 64% said they used the federal tax credit, 32% said they participated in a net metering program, and 30% said they enrolled in a local rebate program.
You must legally own your system to qualify for incentives. Ownership is determined by which solar financing option you select. Cash payments or solar loans make you the legal owner. Other options, such as solar panel leasing and power purchase agreements (PPAs), will disqualify you from receiving incentives because your solar company will retain ownership of the system. Consider this when weighing your payment options.
Nearly half (49%) of our 1,000 survey takers paid for their panels upfront, while 23% financed through a loan, 11% chose a solar lease, and 17% went with a PPA.
Colorado’s clean energy commitments and generous solar incentives make it an excellent state to go solar. Residents should review available incentives, rebates, qualifications, application process details, and potential roadblocks before purchasing a system. Keep in mind that your selected financing option could impact your eligibility for incentives and your long-term savings.
Request free quotes from at least three installers and compare their products and services. Below is a list of our three top Colorado solar companies :
