Colorado Solar Incentives: Tax Credits, Rebates, Net Metering & More
The benefits of a solar energy system cannot be ignored. It can Reduce your energy bill and with a battery system, even keep the lights on during a power outage. While the high cost of setting up a system can be a roadblock, if you live in Colorado or are moving to a new home in the state, you can reduce the cost of solar panels by thousands of dollars thanks to federal tax credits.
But the savings opportunities don’t stop there. It can deliver even greater savings if you take full advantage of the tax breaks, rebates and favorable financing programs available to you. A wide range of national and local incentives can help lower the price somewhat. However, policies change from time to time.
We’ve done our best to list the available incentives (at the time of writing), but if you don’t see your municipality or utility on this list, please check for yourself to see if there is an incentive you are eligible for.
Comparison of Colorado Solar Incentives
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| Colorado stimulus | Description | Eligibility | Estimated value |
|---|---|---|---|
| Federal Solar Tax Credit | Receive an income tax credit worth 30% of the cost of your solar installation. | Anyone with a tax liability. | Varies (e.g. get a $7,200 credit for a system that costs $24,000.) |
| Solar energy tax exemption | VAT exemption on solar energy equipment | Residents of Colorado | 2.9% sales tax avoided |
| Energy Smart discount | A discount on the costs of energy efficiency improvements. | Residents of 18 Colorado counties | Varies per project and income level. |
| High Country Conservation Center Discount | Separate discounts for solar panels and energy efficiency. | Homes in Summit County | Up to 100% of project cost, up to $4,000. ($1,500 for solar.) |
| Energy Improvement Rebates at Cloud City Conservation Center | Discount on energy labels for homes. | Residents of Lake County | Up to 50% of total project costs, up to $300 per household. |
| Re-energize Garfield County | Discount on energy labels for homes. | Low and Moderate Income Households in Garfield County | The maximum rebate is $2,000 to $4,000, depending on income. |
| Residential CORE discounts | Compensation for energy improvements to your home. | Residents of Roaring Fork Valley (Pitkin County and parts of Eagle County) | Up to $7,500 or $15,000, depending on income. |
| Energy-efficient Colorado | A state-level initiative that partners with utilities and organizations | Homeowners in Colorado | Differs |
Colorado State Solar Tax Exemptions and Loan Programs
Below are some programs in the state that can help you save on the cost of installing a home solar panel system.
Solar Energy Tax Exemptions
Colorado does not charge a sales tax on purchases of solar energy and storage equipment. This includes not only solar panels and systems, but also system components and supporting structures and racks.
Colorado Residential Energy Upgrade (RENU) Loan Program
This special loan program is a partnership between the Colorado Clean Energy Fund and Colorado credit unions. Qualifying homeowners can borrow up to $75,000 for their home solar, battery storage or water heating systems. There is no down payment; low, fixed interest rates; and a 20-year term.
Local Incentives for Solar Panels in Colorado
Below is a summary of some of the local solar and energy efficiency rebates available in Colorado.
Energy Smart Colorado Rebates
Energy-efficient Colorado is a nonprofit organization that works with 10 community partners to make residential energy efficiency affordable in 18 counties across the state. This includes home energy assessments, special financing programs, and rebates for heat pumps, heat pump water heaters, electrical appliances, and weatherization projects. Homeowners can receive rebates of up to 25% or $300 off some projectsIf you live in a prefabricated home, you may qualify for higher discounts.
The Energy Smart programs are managed by these local partners.
Re-energize Eagle County
Walking Mountains Sustainability says information on the 2024 solar incentives is still available, but information is already available. information about energy efficiency rebates worth up to $1,000.
High Country Conservation Center Discount
You can up to 100% or $1,500 on your solar panel or solar thermal installation and up to $4,000 combined with other efficiency updates, depending on your income.
Cloud City Conservation Center Energy Improvement Rebates (Lake County)
You may be able to 50% discount on the total cost of a home energy assessment, up to $300 per household.
Re-energize Garfield County
This helps low and moderate income households in Garfield County to free home energy improvements and financial assistance to become more energy efficientThe program’s website says that lower-income households “typically receive 100% of the cost of recommended measures,” while middle-income households can receive a $2,000 to $4,000 rebate.
Residential CORE discounts (Roaring Fork Valley)
People who live in the Roaring Fork Valley, which includes Pitkin and Eagle counties, can get discounts for a series of energy efficiency improvementsDepending on income, the rebates can be as much as $7,500 or $15,000.
Utility Rebates for Solar Equipment in Colorado
A number of utilities in the Centennial State offer rebates on solar equipment.
Holy Cross Energy Renewable Energy Incentives
Holy Cross Energy customers may be eligible for discounts on their solar system: $250 per kilowatt for the first six kilowatts, then $100 per kilowatt up to 25 kilowatts. You can also get a rebate on your battery: $250 per kilowatt or $500 per kilowatt (up to 25 kilowatts), depending on how much you allow Holy Cross Energy to regulate the charge of your battery.
Incentives are offered on a first-come, first-served basis.
Discount on battery systems from the San Miguel Power Association
Customers of the San Miguel Power Association can discount on their battery systemsThe rebate is $750 for battery systems of 6 kWh or larger.
Federal Solar Tax Credits for Colorado Residents
There are two federal tax credits you can use to go solar or improve the energy efficiency of your home.
Clean energy credit for homes
You can claim a federal income tax deduction of 30% of the cost of installing solar panels and home batteries.
Energy-efficient home improvement loan
The federal energy efficient home improvement credit You can claim income tax credits for home energy efficiency upgrades: Up to a $3,200 credit per year through 2032. The credit is segmented by technology (up to $2,000 per year for heat pumps and $1,200 per year for other technology), and you can’t roll over the credit, so plan accordingly.
Net Metering Rules for Solar Energy in Colorado
Under Colorado law, net metering works differently based on the type of utility you have. You should be credited at the retail rate up to a certain point. For investor-owned utilities, that should be at least 120% of your usage. For municipal utilities or co-ops, the limit is set at 10 kilowatts of solar capacity. Above that, you can be credited at another rate. Excess credits are rolled over each month.
The details vary by utility, so make sure you understand your utility’s requirements before proceeding.
Community Solar Projects in Colorado
If you don’t have the financial resources to purchase or lease a home solar system, you can take advantage of the benefits of renewable energy through community solar projects across the state.
Solar Gardens from Empire Electric Association
The electric cooperative Empire Electric Association operates two community solar programs. People can lease a portion of the larger array for energy bill credits. One of the programs is for people who meet income criteria.
Xcel Energy Solar Rewards Community Program
Instead of installing a home solar system, homeowners who are Xcel Energy customers can: subscribe to a local, external solar garden and purchase electricity through the program. By subscribing, you will receive a Solar Community credit on your monthly bill.
Solar energy cooperatives
Solar co-ops, groups of people who pool their money to increase their purchasing power and get solar energy. Solar co-ops are member-driven and free to join.
Members receive bids to install solar panels on their homes from an installer chosen by the group. Once you receive a bid, you can decide to proceed.
Solar United Neighbors is looking for members for its solar cooperative for Routt and Steamboat Springs countiesMembership is open to homeowners and business owners through April 15, 2024.
