Fort Collins, CO Solar Panels

Colorado’s Property Tax Exemption protects homeowners from paying property taxes on residential solar systems. If you own a solar electric system (photovoltaic) installed on your home that produces electricity primarily for your household use, the value of that solar equipment is completely exempt from property taxation. This exemption applies to systems with a production capacity of up to 100 kilowatts of AC electricity, which covers virtually all residential installations.

To qualify, the solar system must be located on residential property, owned by you (the homeowner), and used primarily to generate electricity for your home. The exemption applies only to the solar equipment itself—not the underlying real property value. There are no application deadlines or time limitations; the exemption continues as long as you own the qualifying system. This means you won’t see an increase in your property tax bill due to adding solar panels, helping you maximize your long-term savings from clean energy.

Colorado offers a sales and use tax exemption on the components needed to install a solar energy system. This means you won’t pay the state’s 2.9% sales tax on eligible equipment like solar panels, inverters, mounting racks, wiring, and other essential system components. The exemption also applies to certain special district taxes, including the Regional Transportation District (RTD) and Scientific and Cultural Facilities District taxes.

The exemption automatically applies to state sales tax and most special district taxes. However, it does not automatically apply to city or county sales taxes unless your local government has specifically adopted the exemption. You’ll want to check with your city or county to see if they’ve passed an ordinance to include this benefit. The exemption covers equipment up to the point of generator step-up transformers at your property, but does not include labor costs, battery storage systems, or remote monitoring equipment. There are no application deadlines or time limitations—this exemption is available whenever you purchase qualifying solar components in 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. 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 system must be at least 0.5 kW in size (minimum 500 watts) and use new, UL-listed equipment from their eligible equipment list. The installation must be completed within six months of receiving your rebate reservation letter. In exchange for the incentive, you’ll assign the renewable energy credits (RECs) from your system to Fort Collins Utilities for 20 years.

It’s important to note that if your installation site has shading between 9 a.m. and 3 p.m., you’ll need to submit a shading analysis, and your rebate amount may be reduced if your system produces less than 90% of optimal output. Fort Collins Utilities recommends starting with a home energy assessment through their Epic Homes program before installing solar, as efficiency improvements often provide better financial returns. The utility also offers on-bill financing through the Epic Loan program to help make solar more accessible.

San Miguel Power Association (SMPA) offers solar rebates to help members in their Colorado service area offset the cost of installing solar photovoltaic systems. This utility program provides a straightforward cash rebate of $0.10 per watt for solar installations on both residential and commercial properties. The rebate is designed to make renewable energy more accessible as you invest in solar power for your home or business.

For residential solar installations, you can receive up to $300 (capped at 3 kilowatts). Commercial properties are eligible for a larger rebate of up to $1,000 (capped at 10 kilowatts). To receive this rebate, your solar contractor must complete and submit the application on your behalf using SMPA’s official rebate forms. Contractors need to meet certain eligibility requirements, and deadlines do apply, so it’s important to discuss the rebate process with your installer early in your project planning.

Keep in mind that this rebate is administered directly by SMPA and is only available to members within their service area in Colorado. For questions about eligibility, application deadlines, or to confirm your contractor meets the requirements, contact SMPA Member Services at (970) 626-5549 or [email protected] before moving forward with your installation.

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 higher upfront payments compared to the standard Solar*Rewards program, making clean energy more accessible to households that meet income requirements. The program is designed to reduce the initial cost of going solar while helping you lower your monthly electricity bills.

Eligible participants receive an upfront incentive payment based on the size of their solar system, with rates that are significantly higher than the standard program. To qualify, you must be an Xcel Energy residential customer in Colorado and meet income eligibility guidelines, typically at or below 80% of the area median income. You’ll need to provide documentation of your household income during the application process. The program operates on a first-come, first-served basis with limited annual funding, so it’s important to apply early in the year when funds become available. Your solar system must be installed by a qualified contractor and meet Xcel Energy’s technical requirements to receive the incentive payment.

The Xcel Energy Solar*Rewards Program – Renewable Battery Connect is a utility incentive that pays Colorado homeowners for allowing Xcel Energy to occasionally use stored energy from their home battery systems during times of high electricity demand. When you enroll your battery in this program, Xcel Energy can dispatch (draw power from) your battery during peak demand periods to help balance the electric grid. In exchange, you receive annual payments for making your battery available to support the community’s energy needs.

Homeowners receive $300 per year for each enrolled battery system. This payment is provided regardless of how often Xcel Energy actually uses your battery, simply for keeping it available in the program. The program requires you to have a qualifying battery storage system installed at your home and connected to Xcel Energy’s grid. Your battery must be capable of communicating with Xcel Energy’s systems and meet specific technical requirements for dispatch capability.

Enrollment is ongoing, but space in the program may be limited based on Xcel Energy’s grid needs. Participants typically commit to a multi-year contract term. It’s important to understand that when Xcel Energy dispatches your battery, it will reduce the stored energy available for your own use during that time, though the utility aims to minimize impact on your home energy needs. This program works best for homeowners who want to support grid reliability while earning steady income from their battery investment.

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 reduce the upfront cost 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 receive credit for the excess electricity your solar panels generate and send back to the grid. When your system produces more energy than your home uses, your utility meter essentially runs backward, and you earn credits on your electric bill. These credits are valued at the same retail rate you pay for electricity (1:1 net metering), meaning every kilowatt-hour you send to the grid offsets a kilowatt-hour you would otherwise purchase.

The specific benefits depend on your utility provider. Most Colorado utilities allow you to carry credits forward month to month, helping you offset higher usage during seasons when your solar production is lower. At the end of the year (typically in March or April), different utilities handle remaining credits differently. Some, like Xcel Energy and Black Hills Energy, give you a choice: either roll credits over indefinitely to use in future months, or cash them out at a lower rate (typically 1.5 to 5.5 cents per kWh). Others, like United Power and CORE Electric Cooperative, automatically cash out remaining credits at their avoided cost rate (around 4 to 5.5 cents per kWh). Colorado Springs Utilities offers either indefinite rollover or a 2 cent per kWh cash-out option.

Net metering is generally available to homeowners who install solar panels and connect to the grid through their utility company. There are no application deadlines, as this is an ongoing program required by Colorado law. However, it’s important to understand your specific utility’s rules, especially regarding annual true-ups and what happens to excess credits if you move. Most utilities recommend the rollover option when available, as using credits at full retail value later is more beneficial than receiving a small cash payment.