Rocky Mountain National Park

Welcome to the Colorado solar incentive and rebate information page!

We recommend starting here and reading up about what’s going on in the state as a whole, then exploring further into our local resources in Denver.

If you have any questions, our network of solar experts are on call to assist you! Simply sign up for personalized help. You can get discounted pricing as low as $5,000/kW! This is paired with the very strong Colorado solar incentives below.

Solar Legislator Score:

2012 Update

After paving the way forward in 2004 with the nation’s first statewide Renewable Energy Portfolio Standard, Colorado continues to display a refreshing foresight for our future and a healthy respect for its environment with strong overall incentives for residential solar power. While there is always room to improve (more performance-based payments and some state tax credits would be icing on the cake), Colorado’s strong solar rebate programs, tax exemptions, and net metering regulations ensure the Rocky Mountain State will remain high indeed on our list of solar-friendly places.

Performance Payments

Only two Colorado power companies will actually pay you in cash based on energy produced: Black Hills and Xcel Energy. Yes we said Xcel. That means that if you’re one of the millions of people in Denver, Boulder, Littleton, or any other Xcel-served city, in addition to helping fund your installation costs, your utility company will literally pay you cash for every kilowatt-hour of solar energy you produce! Just be sure not to miss out on the opportunity; Xcel will stop offering these incentives after residential-scale solar production goals have been met, and approximately 35% of available program space has already been claimed.

State Solar Rebates

A few Colorado localities offer solar incentives. The cities of Aurora and Lakewood, for instance, will refund 100% of the solar installation permit fee. Yes, it is the city charging the permit fee in the first place, but a refund is a refund! Residents of Eagle County receive rebates for the installation cost of solar systems ($1/watt up to $2,000) directly from the county government, and residents of the Roaring Fork Valley are eligible for solar rebates ($.50/watt up to $3,000) from the Community Office for Resource Efficiency, a Colorado non-profit organization.

Those solar power rebates are great, but the real vein of Rockies gold for solar comes from Colorado’s utility companies. Just check out the money you can save on solar system installation:

For every kilowatt of solar power you install, you will receive the amount of money listed next to your utility company, up to the cap.

State Tax Credit

Colorado has no state tax credit for solar power. Given all of the other awesome laws flying around this review, and all the areas of renewable energy policy Colorado has led the way in, we’re really not sure what happened to the state tax credits. Did someone forget?

Tax Exemptions

When you install a residential solar system in Colorado you are exempt from 100% of related sales and use taxes, and exempt from paying property taxes resulting from the increase in your home’s value. Now that’s how we like our renewable energy laws: simple, smart, and saving you money.

Net Metering

Net metering is one of the keys to successful solar policy, and Colorado may just have the best net metering laws in the country. In short, net metering makes sure that you get credit, either in energy or in cash, for every bit of energy you produce. Your utility will track how much solar power you produce and how much you use, and the utility will ‘store” any extra power your solar system produces. At night or on cloudy days, the utility credits your surplus power back to you.

In addition, Colorado requires utilities to pay you for the net excess energy that your system produces over the course of a year. So if you’re smart about your energy usage, your solar panel can actually turn a profit! The utility company will literally cut you a check at the end of the year for any extra solar juice you’ve contributed to the grid. Colorado makes taking advantage of those savings even easier, allowing you to opt either for the check or to simply roll your extra credit to any subsequent monthly bills. Have we mentioned how we like our renewable energy laws? You rock, Colorado.

PACE Financing for Solar

So you want to go solar but don’t want to get a second mortgage to finance it? Well, Colorado has already implemented municipal financing, otherwise known as Property Assessed Clean Energy (PACE) financing. This is where your upfront solar cost is paid for with a special property tax assessment. You slowly pay off the tax assessment over 20 years. If you move in 5 years, not a problem. The payments (and solar savings) get transferred to the new owner. It’s a huge win-win program. Unfortunately, these programs are sold out quickly, but check with a local installer if it’s available in your area.

Utility Policies

Colorado was the first state to pass a Renewable Energy Portfolio Standard (“RPS”), and they continue to have one of the best such standards with their laudable goal of 30% renewable energy by 2020. Colorado also mandates that by 2020 at least 3% of retail sales must come from distributed generation (“DG”), i.e., not from giant, environmentally destructive power plants. Even better, at least half of that DG energy must come from local sources.

A strong state RPS is a critical part of the total solar package. By setting a high RPS like 30%, Colorado is not only setting a strong policy standard for other states to follow, they’re also setting high targets for the utility companies to meet. It is, after all, the utilities that sell the electricity to all you Coloradans; a great deal of the burden of meeting the RPS standards falls on them.

What does all this mean for you? It means that you want to make the switch to solar now, while you are being offered all this free money! The utility companies don’t want to just give you cash. They need customers to switch to renewable energy sources to help them meet those state-mandated renewable, distributed generation, and locally produced energy goals. You can be certain that once the utility companies have met their share of those goals, they will stop supplementing your solar installation costs. That’s why Xcel, for instance, is only accepting a limited number of program entrants for it’s solar rebates and performance payments. You know you want all that free money to help you save your wallet (and the environment)!

Utility Prices

Colorado homeowners pay 10.54 cents per kilowatt-hour of energy, slightly below the national average. That’s cheap. Cheap enough that you may wonder why we are making all this fuss about solar power paying for itself in your electricity savings. Why is energy currently so cheap? Only because we create most of that energy from nonrenewable, environmentally destructive sources like coal and other fossil fuels. Sooner or … even sooner?! the economic and environmental costs associated with fossil fuels are going to become too much to ignore, and energy prices will go up. When that happens the payback timeframe on your solar investment will decrease dramatically, and you and your solar system are going to look really, really smart. We’re talking Einstein-level brilliant here – or at least some really famous economist or something.

Another Reason to Go Solar: Rising Utility Rates

Check out the chart below. If electricity were simply to increase at a rate of 5.5% for the next 20 years, we’ll be looking at a $0.39 kWh charge for electricity from the utility. Your power bill for 1200kWh of usage will now total an average $259 a month from what used to be $100/month. Don’t think it can happen? Think again. Utility rates in Colorado have been increasing at 9% per year over the past 10 years. It is happening already.

But as we said above, every home and everyone’s energy usage is different. The best way to see if solar is right for you is to connect with one of our installers on the ground. They’ll give you a free quote. Free is good. Costs you nothing but time, and if solar is right for you, well, you’re Golden. As in Colorado.

Example 5kW system return on investment

So right about now you’re asking yourself “just how much money are we talking about?” We’re glad you asked, because the answer is: boatloads of cash! Check out this breakdown of a 5kw system installed in Denver.

We calculated this Denver-based example using an average price of $5 per watt for solar installation. This is a solid national average, but solar panels may be a bit cheaper or more expensive in your area. That means the bill starts at $25,000 … but then we start subtracting a bunch of big numbers:

• State Solar Rebate: subtract $5,000 (5kw x $1,000/kw)
• Year 1 REC payments: subtract $667 (7410 kwh x .09/kwh)
• 30% Federal Solar Tax Credit: subtract $5,800 (calculated after subtracting state incentives)

• Annual electricity savings: subtract $781 annually, multiplied by an increase of electricity rates by 1.5% every year thereafter.
• Cost for solar panels after year 1: $12,752. You’ve already cut the price in half!
• Time to payback: At the current rate of annual electricity savings, you can expect your new solar system to pay for itself in approximately ten years. After that your solar system will start turning a profit, making you money while you save the planet.
• New electricity bill: While you wait for those profits to start rolling in, you are already saving $65 a month on your electricity bill at current rates.
• Greenhouse Gas saved: Did we mention you’re saving all this money while also saving the planet? It’s true. The 7410 kwh of electricity you produce will save 5.1 metric tons of carbon emission. That’s the same as not buying 572 gallons of gasoline or personally planting 131 trees.

As always, this quote is general and could be less…or more. Solar is not a one size fits all sort of deal. Your cost will depend on a lot of factors, including your utility, roof type, energy usage, and lots of other things. In fact, check out these 9 ways it could be more expensive.

Best way to find out exactly is to get one of our free customized quotes. Just saying.

Consensus

Not that many years ago, Colorado led the way in solar policy. While the state’s policies remain strong, they have not grown much over the last few years. We still rate Colorado an A based on solid solar power rebates and a fantastic net metering law, but to be perfectly honest, we are letting you rest on your laurels a bit here. We’d like to see a few more incentives push that time to payback down to 8 years or less, or Colorado’s solar grade is going to start slipping.

If you have more questions, you are welcome to ask them here, but honestly, your home is unique. The best way to determine how much money solar can save you is with one of our free customized quotes. One of our partner installers on the ground will be happy to explain all of this and more.  Heck, get 3 quotes and compare. Get 5! They don’t cost anything but a tiny bit of time. We like free. Especially free solar quotes. We’re pretty sure you’ll love free solar quotes too.