Boulder, CO

Colorado offers a Property Tax Exemption for residential solar systems that provides significant financial relief for homeowners who install solar panels. Under this state tax exemption, renewable energy personal property located on residential property, owned by the homeowner, and used to produce energy for that property is completely exempt from property taxation in Colorado.

To qualify for this exemption, your solar electric generation system must be located on your residential property, primarily used to produce electricity for your home, and have a production capacity of no more than 100 kilowatts of AC electricity. This means the value of your solar system won’t be included when calculating your property taxes, potentially saving you hundreds or thousands of dollars over the life of your system, depending on your local tax rates and system size.

It’s important to note that this exemption applies automatically to qualifying systems – no application is required. The exemption covers only the renewable energy equipment itself, not the underlying real property. There is no expiration date for this incentive, making it a long-term benefit for Colorado homeowners who invest in solar energy.

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, potentially saving homeowners hundreds of dollars on their solar installation costs.

Eligible components include solar modules, supporting structures, inverters, wiring, control systems, and other essential solar equipment. However, the exemption doesn’t cover labor costs, energy storage devices, 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 the local government has specifically adopted the exemption by ordinance. There are no expiration dates or deadlines associated with this incentive, making it continuously available to Colorado residents investing in solar energy.

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. 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 assign 20 years of Renewable Energy Credits (RECs) to Fort Collins Utilities. The system 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 in the SMPA service area who install renewable energy systems. For residential solar photovoltaic (PV) installations, SMPA provides a rebate of $0.10 per watt up to a maximum of 3 kilowatts (kW), resulting in a potential rebate of up to $300. Commercial properties can receive the same rate of $0.10 per watt but with a higher cap of 10kW, allowing for rebates up to $1,000.

To qualify, your contractor must complete and submit the required rebate paperwork on your behalf. While contractors don’t need to be pre-registered with SMPA, they must meet certain eligibility requirements. The program also extends to small wind systems for residential properties at the same rate and cap as solar PV ($0.10/watt up to $300). For specific deadlines or additional information about the program, homeowners should contact SMPA Member Services at (970) 626-5549 or email [email protected]. Remember that this rebate can be combined with other available incentives to further reduce the cost of your renewable energy investment.

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 systems installed on the homes of eligible low-income customers, helping to reduce their electricity costs while supporting clean energy adoption.

Participants receive monthly payments from Xcel Energy based on the actual electricity their solar 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 available to 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 a one-time upfront incentive based on the battery’s capacity, plus ongoing monthly bill credits for allowing Xcel to discharge their battery during high-demand periods. The program requires customers to have both solar panels and a compatible battery storage system installed by an approved contractor. Homeowners maintain control of their battery for backup power during outages, while Xcel can access the stored energy during peak times to support grid reliability.

To qualify, you must be an Xcel Energy customer in Colorado with a grid-connected solar system and compatible battery storage. The battery must meet Xcel’s technical specifications and be installed by a qualified contractor. Enrollment in the program requires signing an agreement that allows Xcel limited access to your battery system while ensuring you maintain backup power capabilities during outages.

The City of Boulder Solar Tax Rebate program offers financial relief to residents and businesses who install solar electric or solar thermal (hot water) systems on their property. Established in 2008, this incentive provides approximately 15% rebate on city sales and use taxes paid on materials and permits related to your solar installation. This can help reduce the overall cost of going solar while supporting Boulder’s commitment to renewable energy.

To qualify, you must submit your rebate application within 12 months of the city’s final inspection of your solar system. The application process requires completing the Solar Tax Rebate Application form and an Affidavit of Legal Residency, along with submitting receipts from your project and a photocopy of your identification. It’s important to note that rebates are subject to funding availability, so applying promptly after your installation is complete is recommended. Spanish-language application forms are also available for Boulder residents.

Net Metering in Colorado is a valuable program that allows solar homeowners to receive full credit for excess electricity their system produces. When your solar panels generate more power than your home uses, that excess electricity flows back to the grid, and your utility company credits your account at a 1:1 ratio. This means for every kilowatt-hour (kWh) you send to the grid, you receive a full credit to offset future electricity consumption.

The financial benefits vary slightly depending on your utility provider. Most Colorado utilities allow unused credits to roll over month-to-month. At the end of the annual period (typically in April), you’ll have two options with most providers: either cash out remaining credits at the utility’s avoided cost rate (ranging from approximately 1.5¢ to 5.5¢ per kWh depending on your utility), or continue rolling over credits indefinitely. Palmetto typically recommends the rollover option as using credits at their full retail value later is more beneficial than receiving the lower cash-out rate.

Important considerations: If you choose the indefinite rollover option, be aware that you won’t receive cash payments, and credits may be forfeited if you move. Some utilities like Grand Valley Power use Time-of-Use rates, meaning energy produced during specific time periods can only offset consumption during those same periods. Additionally, each utility has specific rules about when annual true-ups occur and how excess generation is valued, so it’s important to understand your specific utility’s policies.