Aurora, CO

Colorado offers a Property Tax Exemption for residential solar electric generation systems, providing significant financial relief for homeowners who install solar panels. This incentive completely exempts qualifying residential solar systems from property taxation, meaning you won’t pay additional property taxes on the value that solar adds to your home.

To qualify for this exemption, your solar system must: be located on residential property, be owned by the residential property owner, produce electricity primarily for use in your home, and have a production capacity of no more than 100 kilowatts of AC electricity. The exemption applies automatically to eligible systems with no application required, and there is currently no expiration date for this incentive. This permanent tax exemption helps homeowners avoid the property tax increases that might otherwise result from the added value of solar improvements.

Colorado offers a Sales Tax Exemption for solar equipment that eliminates state sales tax on components used in solar energy systems. This exemption applies to the state’s 2.9% sales tax as well as certain special district taxes like RTD and Cultural Facilities District taxes, providing immediate savings when purchasing solar equipment.

Eligible components include solar modules, supporting structures, inverters, wiring, control systems, and other essential parts of your solar installation. However, the exemption doesn’t cover labor costs, energy storage devices like batteries, or remote monitoring systems. It’s important to note that while this exemption applies at the state level, most city and county sales taxes still apply unless they’ve specifically adopted the exemption by local ordinance. Homeowners should consult with their installer about which specific components qualify and which local taxes might still apply to their purchase.

Fort Collins Utilities offers solar rebates to residential customers who install solar photovoltaic (PV) systems. The program provides $200 per kilowatt of DC generating capacity (up to $1,000) for solar installations and $150 per kilowatt-hour of battery capacity (up to $3,000) for battery storage systems. The maximum combined incentive available is $4,000 per residential property.

To qualify, homeowners must be Fort Collins Utilities electric customers and use a contractor from the Participating Solar Contractor Network. Systems must be at least 500 watts, meet interconnection standards, and use new, UL-listed equipment. In exchange for the rebate, customers agree to assign 20-year Renewable Energy Credits to Fort Collins Utilities. Systems must be installed within six months of receiving the rebate reservation letter. Additionally, homeowners may be eligible for the 30% federal tax credit for solar installations through 2032 (decreasing to 26% in 2033 and 22% in 2034).

The San Miguel Power Association (SMPA) Solar Rebates program offers financial incentives to homeowners and businesses installing renewable energy systems in their service area. Residential customers can receive $0.10 per watt for solar photovoltaic installations, up to a maximum of 3kW or $300. Commercial customers are eligible for the same rate of $0.10 per watt but with a higher cap of up to 10kW or $1,000. The program also includes similar rebates for small wind systems.

To apply for these rebates, your contractor must complete and submit the necessary paperwork on your behalf. While contractors don’t need to be pre-registered with SMPA, they must meet certain eligibility requirements. The application process has specific deadlines that must be followed. For more information about the program or assistance with the application process, you can contact SMPA Member Services at (970) 626-5549 or email [email protected].

The Xcel Energy Solar* Rewards Program – Low Income is a special initiative designed to make solar energy accessible to income-qualified households in Colorado. Through this program, Xcel Energy provides production-based incentives for solar installations on homes of eligible low-income customers, helping to reduce electricity bills while supporting clean energy adoption.

Participants receive monthly payments from Xcel Energy based on the amount of solar energy their system produces. These payments come in the form of Renewable Energy Credits (RECs) that Xcel purchases from you at a predetermined rate. The program specifically targets households that might otherwise find solar installation financially challenging, making renewable energy more equitable and accessible across Colorado communities.

The Xcel Energy Solar* Rewards Program – Renewable Battery Connect is a utility incentive program for Colorado homeowners who install battery storage systems alongside their solar panels. Through this program, Xcel Energy offers financial incentives to customers who allow the utility to access their battery storage during peak demand periods, helping to stabilize the grid while providing homeowners with backup power security.

Participants receive production-based incentives for the energy their battery systems contribute to the grid during high-demand times. The program requires that you be an Xcel Energy customer in Colorado with a qualifying battery storage system that meets their technical specifications. The battery must be able to communicate with Xcel’s systems to participate in grid services when needed.

Before enrolling, homeowners should understand that Xcel will have limited access to their battery system during specific times, though the program is designed to ensure you maintain sufficient backup power for your home’s needs. Contact Xcel Energy directly for current incentive rates, eligibility requirements, and application procedures, as program details may change periodically.

The City of Boulder Solar Tax Rebate program offers residents and businesses a rebate of approximately 15% of the city sales and use tax paid on materials and permits for solar electric (photovoltaic) or solar thermal (hot water) system installations. This incentive, established in 2008, helps reduce the overall cost of going solar by returning a portion of the taxes paid during installation.

To qualify, applicants must submit their rebate application within 12 months of the city’s final inspection of their solar installation. The application process requires completing the Solar Tax Rebate Application form and an Affidavit of Legal Residency, along with submitting receipts from the project and a photocopy of identification. It’s important to note that rebates are subject to funding availability, so interested homeowners should apply promptly after their installation is complete to ensure they don’t miss out on this opportunity.

Net Metering in Colorado is a valuable program that allows solar homeowners to receive full credit for excess electricity their system sends back to the grid. When your solar panels produce more electricity than your home uses, this surplus energy flows to the utility grid, and you receive a credit on your bill at a 1:1 rate – meaning each kilowatt-hour (kWh) you export is worth the same as one you would purchase from the utility.

These credits can be applied to future electricity bills when your home needs more power than your solar panels are producing, such as during nighttime or cloudy days. This effectively allows you to use the electric grid as a virtual battery, storing the value of your daytime solar production for later use.

The specific handling of excess credits varies by utility company in Colorado. Most utilities allow unused credits to roll over month-to-month. At the end of an annual period (typically in April), any remaining credits are either paid out at the utility’s avoided cost rate (generally between 1.5-5.5 cents per kWh) or can continue to roll over indefinitely, depending on the utility and which option you select.

For maximum financial benefit, Palmetto typically recommends selecting the indefinite rollover option when available, as using your credits directly for electricity is more valuable than receiving the lower cash-out rate. However, be aware that with the rollover option, credits may be forfeited if you move. There are no specific system size limitations for net metering eligibility in Colorado, making this incentive accessible to most residential solar customers.