Colorado Springs, 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 in Colorado, meaning you won’t pay additional property taxes on the value your solar installation 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 no expiration date for this incentive. This permanent exemption helps homeowners avoid the property tax increases that might otherwise result from home improvements that increase property value.

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 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 the local government has specifically adopted the exemption. 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 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. Homeowners can also take advantage of the 30% federal tax credit for solar installations through 2032 (reducing 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 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 the electricity generated by your solar system, helping to make clean energy more affordable for those who might otherwise face financial barriers to adoption.

Participants receive monthly payments from Xcel Energy based on their system’s actual electricity production, with the utility purchasing 100% of the Renewable Energy Credits (RECs) generated by your solar panels. This creates an additional income stream that helps offset the cost of your solar installation while contributing to Colorado’s renewable energy goals.

To qualify for this program, you must be an Xcel Energy customer in Colorado with a household income that meets the program’s low-income thresholds. Your solar installation must be completed by a qualified contractor and meet Xcel Energy’s technical requirements. The system size is typically limited to what would offset your historical electricity usage.

The program operates on a first-come, first-served basis until the allocated funding is exhausted each year, so interested homeowners should apply as early as possible. Xcel Energy periodically updates the incentive rates and program capacity, so it’s advisable to check their website for the most current information before proceeding with your solar project.

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 monthly bill credit based on the capacity of their battery system. The program requires that you have a qualifying battery storage system installed by an approved contractor. To be eligible, you must be an Xcel Energy customer in Colorado with a grid-connected solar system. The battery must be able to communicate with Xcel’s systems to allow for occasional discharge during high-demand periods, typically limited to 10-15 events per year.

Before enrolling, homeowners should understand that Xcel will have limited access to their battery system during peak demand times, but the system will always maintain a minimum charge level for backup power needs. The program operates on a first-come, first-served basis, so interested homeowners should apply as soon as they’re considering a battery installation to secure their spot in this valuable incentive program.

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 city program rebates approximately 15% of the city sales and use tax paid on materials and permits for solar installations. This can help offset the initial cost of going solar while supporting Boulder’s climate action goals.

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 the excess electricity their systems generate. When your solar panels produce more power than your home uses, this surplus 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 benefit varies slightly depending on your utility provider. Most Colorado utilities, including Xcel Energy, Black Hills Energy, and Colorado Springs Utilities, allow unused credits to roll over month-to-month. At the annual true-up period (typically in March or April), you’ll have options for handling remaining credits. You can either cash them out at the utility’s avoided cost rate (ranging from approximately 1.5¢ to 5.5¢ per kWh depending on your provider) or continue rolling them over indefinitely. Palmetto typically recommends the rollover option as using credits for future electricity is more valuable than receiving the cash-out rate.

All residential solar customers in Colorado are eligible for net metering, regardless of system size. There are no specific deadlines to enroll, but it’s important to note that if you choose the indefinite rollover option, any accumulated credits will be forfeited if you move. Some utilities like Grand Valley Power Cooperative use time-of-use rates, which means energy produced during specific time periods can only offset consumption during those same periods.