Fort Collins, 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 property owner, and used to produce energy for that property is completely exempt from Colorado property taxation.

To qualify for this exemption, your solar electric generation system must be located on residential real property, primarily used to produce electricity for the residential improvements, and have a production capacity of no more than 100 kilowatts of AC electricity. This exemption only applies to the solar 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 for this incentive, making it available to all Colorado homeowners purchasing solar equipment.

Fort Collins Utilities offers solar rebates to residential customers who install solar photovoltaic (PV) systems. Homeowners can receive $200 per kilowatt of DC generating capacity installed, up to a maximum of $1,000. Battery storage installations are also eligible for $150 per kWh of capacity, up to $3,000. The combined maximum incentive for a new system with battery storage is $4,000.

To qualify, you must be a Fort Collins Utilities electric customer and use a contractor from their Participating Solar Contractor Network. Systems must be at least 500 watts, meet interconnection standards, and use new, UL-listed equipment. The system must be installed within six months of receiving the rebate reservation letter. In exchange for the rebate, homeowners assign 20 years of Renewable Energy Credits (RECs) to Fort Collins Utilities. The incentive is paid by check after the system passes final inspection.

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 deadlines that must be observed, so it’s important to plan accordingly. 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 additional financial incentives to help lower-income residents install solar panels on their homes, reducing both their environmental impact and monthly energy costs.

Participants receive production-based incentives (PBI) for the electricity their solar system generates, paid out monthly over a 10-year period. These payments come in addition to the regular bill savings from having solar power. To qualify, households must meet income requirements (typically at or below 80% of the area median income) and be Xcel Energy customers in Colorado. The solar installation must be completed by an approved contractor.

This program has limited funding each year, so interested homeowners should apply as early as possible. The application process requires income verification and a solar system proposal. As a special consideration, participants should understand that Xcel Energy will own the Renewable Energy Credits (RECs) generated by the system during the 10-year incentive period. After completing the program, homeowners continue to benefit from their solar system’s energy production for many years to come.

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 during peak demand periods, helping to stabilize the grid while providing homeowners with backup power security.

Participants receive both upfront incentives and ongoing performance-based payments for allowing Xcel Energy to discharge their battery during high-demand periods. The program helps offset the cost of battery installation while contributing to grid reliability. To qualify, you must be an Xcel Energy customer in Colorado with a compatible battery storage system connected to a solar installation. The battery must meet Xcel’s technical requirements and be accessible for utility control during specified times.

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 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, 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 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 – meaning you get credited at the same retail rate you pay for electricity. This essentially allows your meter to run backwards when you’re producing more than you’re consuming.

The specific handling of excess credits varies by utility company across Colorado. Most utilities like Xcel Energy, Black Hills Energy, and Colorado Springs Utilities offer customers a choice between rolling over credits indefinitely or receiving an annual cash-out payment. Cash-out rates typically range from 1.5 to 5.5 cents per kilowatt-hour depending on your utility provider, with annual true-ups usually occurring in March or April. For most homeowners, the rollover option provides better long-term value since using your credits for future electricity needs is more beneficial than receiving the lower cash-out rate. However, be aware that with the rollover option, credits may be forfeited if you move from your current residence.