Boulder, CO Solar Panels

Colorado’s Property Tax Exemption for residential solar systems means that homeowners don’t pay property taxes on their solar equipment. When you install a solar system on your home, the added value from that equipment is completely exempt from property taxation. This applies to the solar panels, inverters, and related equipment—though not to any structural improvements made to your roof or property.

To qualify for this exemption, your solar system must be located on residential property, owned by you (the homeowner), produce electricity primarily for use in your home, and have a capacity of no more than 100 kilowatts of AC electricity. Most residential systems are well below this limit, typically ranging from 5 to 15 kilowatts. The exemption is automatic and continues for as long as you own the system—there’s no time limit or expiration date.

It’s important to note that this exemption only applies to systems you own outright. If you lease your solar system or participate in a third-party ownership arrangement, the exemption may not apply since you don’t own the equipment. Additionally, if you’re selling your home, county assessors are instructed to adjust comparable sales data to account for solar systems, ensuring fair property valuations that recognize the exempt status of solar equipment.

Colorado offers a sales and use tax exemption for components used in residential solar energy systems that produce electricity from renewable sources. This exemption applies to state sales tax and certain special district taxes (like RTD and the Scientific and Cultural Facilities District), which means you won’t pay these taxes when purchasing qualifying solar equipment. The state sales tax rate in Colorado is 2.9%, so this exemption provides immediate savings on your solar installation costs.

Eligible components include solar panels (modules), inverters, mounting racks and support structures, wiring, control systems, switchgears, and other essential system components up to the point of connection. However, the exemption does not cover labor costs, energy storage devices like batteries, or remote monitoring systems. It’s important to note that while state and certain special district taxes are exempt, most city and county sales taxes still apply unless your local municipality has specifically adopted this exemption by ordinance or resolution. You should check with your installer or local tax authority to understand which local taxes may still apply to your solar purchase, as this varies by location throughout Colorado.

Fort Collins Utilities offers cash rebates to residential customers who install solar panels and battery storage systems. The program provides $200 per kilowatt (kW) of solar capacity installed, up to a maximum rebate of $1,000 for solar systems. Battery storage systems earn an additional $150 per kilowatt-hour (kWh) of capacity, up to $3,000. The combined maximum incentive for both solar and battery is $4,000 per installation. These rebates help offset installation costs, which typically range from $3,500 to $4,000 per kW in the Fort Collins area.

To qualify for the rebate, you must be a Fort Collins Utilities electric customer and work with one of their approved Participating Solar Contractors from start to finish. Your solar system must be at least 0.5 kW in size (battery systems must be at least 6 kWh), and all equipment must be new and UL-listed. The program requires you to assign the renewable energy credits (RECs) from your system to Fort Collins Utilities for 20 years in exchange for the incentive. Systems must be installed within six months of receiving your rebate reservation letter.

Before installing solar, Fort Collins Utilities strongly recommends starting with an Epic Homes energy assessment to identify cost-effective efficiency improvements first. The program also encourages homeowners to avoid removing healthy trees for solar installation, as trees provide significant energy savings and property value benefits. If your roof receives shade between 9 a.m. and 3 p.m., you’ll need to submit a shading analysis, and systems producing less than 90% of optimal output may receive reduced incentive rates. Financing is available through the Epic Loan program for qualified projects.

San Miguel Power Association (SMPA) offers rebates to members who install solar photovoltaic systems at their homes or businesses. This utility program provides a straightforward cash rebate based on the size of your solar system to help offset installation costs. The rebate is calculated at $0.10 per watt of installed capacity.

For residential solar installations, you can receive up to $300 (capped at 3 kilowatts). Commercial solar installations qualify for a larger rebate of up to $1,000 (capped at 10 kilowatts). Your contractor must complete and submit all rebate paperwork on your behalf using SMPA’s official application forms. While contractors don’t need to pre-register with SMPA, they must meet certain eligibility requirements, and deadlines do apply to rebate submissions. Contact SMPA Member Services at (970) 626-5549 or [email protected] with questions about the application process or to confirm current program availability.

The Xcel Energy Solar*Rewards Program for Low Income customers provides enhanced financial incentives to help qualifying Colorado homeowners afford solar energy systems. This utility program offers upfront cash payments for installing solar panels, with significantly higher rates than the standard Solar*Rewards program to make clean energy more accessible to income-qualified households.

Eligible participants receive an upfront incentive payment based on the size of their solar system, typically paid per kilowatt (kW) of installed capacity. The exact incentive rate varies by program year and available funding, but low-income customers receive substantially higher per-watt payments compared to standard program participants. To qualify, you must be an Xcel Energy electric customer in Colorado and meet income eligibility requirements, which are generally based on area median income guidelines or participation in qualifying assistance programs.

This program operates on a first-come, first-served basis with limited annual funding, so incentive rates may decrease or the program may close once funds are exhausted each year. Your solar installer must be approved by Xcel Energy and will typically handle the application process on your behalf. It’s important to apply before installing your system, as retroactive applications are not accepted. The combination of this enhanced utility incentive with other available savings can significantly reduce the upfront cost of going solar for qualifying households.

The Xcel Energy Solar*Rewards Program – Renewable Battery Connect is a utility incentive that pays Colorado homeowners for allowing Xcel Energy to access stored energy in their home battery systems during times of high electricity demand. When you enroll your battery in this program, Xcel Energy can draw power from your battery during peak usage periods to help balance the electric grid. In exchange, you receive annual payments based on your battery’s capacity and performance.

The program offers financial benefits in two ways: an upfront capacity payment based on your battery’s size (typically measured in kilowatts), and ongoing performance payments for the actual energy your battery provides to the grid during dispatch events. Payment amounts vary depending on your battery’s specifications and how often Xcel Energy calls upon your system. You’ll maintain control over a portion of your battery’s capacity for backup power during outages, while the utility accesses the remainder during grid events.

To qualify, you must be an Xcel Energy customer in Colorado with an eligible battery storage system that meets the program’s technical requirements. Your battery must be able to communicate with Xcel Energy’s systems and respond to dispatch signals. The program requires a multi-year commitment, and enrollment is subject to availability as Xcel Energy manages the total capacity enrolled across their service territory. It’s important to understand that during dispatch events, the portion of your battery dedicated to the program will be unavailable for your personal use, though you’ll still have access to your reserved backup capacity.

The City of Boulder offers a sales and use tax rebate for residents and businesses who install solar electric (photovoltaic) or solar thermal (hot water) systems on their property. This rebate returns approximately 15 percent of the city sales and use tax you paid on materials and permits for your solar installation. Enacted in 2008, this program helps offset the upfront costs of going solar by refunding a portion of the local taxes paid during your project.

To qualify, you must submit your rebate application within 12 months of the city’s final inspection of your solar system. You’ll need to complete the Solar Tax Rebate Application and Affidavit of Legal Residency, and provide receipts from your project along with a photocopy of your identification. Keep in mind that rebates are subject to funding availability, so it’s wise to apply as soon as your installation is complete and inspected. Contact the Sales Tax Division at 303-441-3051 or [email protected] with any questions about your eligibility or the application process.

Net metering in Colorado allows you to earn credits when your solar panels produce more electricity than your home uses. These excess kilowatt-hours (kWh) are sent back to the grid, and your utility company credits your account at a 1:1 rate—meaning each kWh you send to the grid offsets one kWh you use later. This helps reduce or even eliminate your monthly electric bills, especially during months when your solar production is lower than your energy needs.

How your credits work depends on which utility company serves your area. Most Colorado utilities let you carry credits forward month-to-month as either dollar or kWh credits. At the end of the year (typically in March or April), you’ll go through an annual “true-up” where any remaining excess credits are handled in one of two ways: you can either cash them out at a rate set by your utility (typically ranging from 1.5 to 5.5 cents per kWh), or choose to roll them over indefinitely. While the cash-out rate is lower than retail electricity prices, rolling over credits allows you to use them at full retail value whenever you need them—though you’ll forfeit unused credits if you move.

All Colorado homeowners with solar systems are eligible for net metering, though specific program details vary by utility provider. Some utilities like Grand Valley Power have time-of-use (TOU) rates, where credits earned during off-peak hours can only offset off-peak consumption. There are no application deadlines, but it’s important to understand your utility’s specific rules about credit expiration and true-up timing. If you’re considering solar, ask your utility about their net metering policies and whether the rollover or cash-out option makes more sense for your situation.