Denver, 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 residential property, primarily used to produce electricity for the residential improvements, and have a production capacity of no more than 100 kilowatts of AC electricity. The exemption only applies to the solar equipment itself, not the underlying real property. This means you won’t pay any additional property taxes on the value your solar system adds to your home, potentially saving you hundreds of dollars annually depending on your local tax rates.

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 key solar components including solar modules, supporting structures, inverters, wiring, and control systems. By eliminating the state sales tax (which is currently 2.9%) on these components, homeowners can save hundreds or even thousands of dollars on their solar installation costs depending on system size.

The exemption automatically applies to state-level taxes and certain special district taxes like RTD and Cultural Facilities District taxes. However, it’s important to note that most city and county sales taxes still apply unless those local governments have specifically adopted the exemption. Additionally, the exemption doesn’t cover labor costs, energy storage devices (like batteries), or remote monitoring systems. There are no application deadlines or expiration dates for this incentive, as it’s a permanent part of Colorado tax law.

Fort Collins Utilities offers solar rebates to help homeowners offset the cost of installing solar photovoltaic (PV) systems. Residential customers can receive $200 per kilowatt of DC generating capacity, up to a maximum of $1,000 for solar installations. Battery storage is also eligible for incentives at $150 per kWh of capacity, up to $3,000. The combined maximum incentive for a new system with both solar and battery storage is $4,000.

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 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 should also be aware that the incentive rate may be reduced for systems generating less than 90% of optimal production.

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 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]. This program complements SMPA’s other energy efficiency incentives, creating multiple opportunities for customers to save on renewable energy investments.

The Xcel Energy Solar* Rewards Program – Low Income is a special initiative designed to make solar energy accessible to Colorado households with limited financial resources. Through this program, Xcel Energy provides additional incentives to income-qualified homeowners who install solar panels, helping to reduce both the upfront costs of installation and ongoing energy expenses.

Eligible participants must meet income qualifications (typically at or below 80% of the area median income) and be Xcel Energy customers in Colorado. The program offers production-based incentives for the electricity your solar system generates, paid through monthly bill credits. Additionally, participants may qualify for reduced installation costs through partnerships with approved solar providers who work specifically with the low-income program.

This program operates on a first-come, first-served basis with limited funding each year, so interested homeowners should apply as early as possible. For the most current information on incentive rates, income thresholds, and application procedures, contact Xcel Energy directly or visit their website. By participating in this program, you can reduce your environmental impact while making solar energy financially accessible for your household.

The Xcel Energy Solar* Rewards Program – Renewable Battery Connect is a utility incentive program for Colorado homeowners who install solar panels with battery storage systems. 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 energy security.

Participants receive production-based incentives for the energy their solar system generates, plus additional compensation for allowing Xcel to discharge their battery when needed. The program helps offset the upfront cost of installing solar and battery systems while providing ongoing financial benefits. To qualify, you must be an Xcel Energy customer in Colorado with an eligible solar PV system paired with a compatible battery storage solution.

The City of Boulder Solar Tax Rebate program offers residents and businesses a financial incentive for installing solar electric or solar thermal (hot water) systems on their property. Established in 2008, this program rebates approximately 15% of the city sales and use tax paid on materials and permits for solar installations. This helps reduce the overall cost of going solar while supporting Boulder’s commitment to renewable energy.

To qualify for this rebate, applicants must submit their 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 these rebates are subject to funding availability, so interested homeowners should apply promptly after their installation is complete.

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 electricity than you’re using, that excess power is sent back to the grid, and you receive a credit on your utility bill at a 1:1 ratio. This means for every kilowatt-hour (kWh) you send to the grid, you get a full retail-value credit that can offset the cost of electricity you draw from the grid when your solar system isn’t producing enough power.

The specific handling of excess credits varies by utility company in Colorado. Most utilities allow unused credits to roll over month-to-month, but annual true-up policies differ. For example, Xcel Energy and Black Hills Energy customers can choose between indefinite rollover of credits or annual cash-out at a lower rate (approximately 1.5 cents/kWh). Colorado Springs Utilities offers similar options with a 2 cents/kWh cash-out rate, while CORE Electric Cooperative (formerly IREA) true-up occurs at the end of April at 5.5 cents/kWh. For most homeowners, the rollover option typically provides greater financial benefit than the cash-out option, especially if you consistently use all your generated electricity throughout the year.