Grand Junction, 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 means your property tax bill won’t increase due to the added value of your solar panels, even though they enhance your property.

To qualify for this exemption, your solar system must be located on residential property, owned by you (the homeowner), produce 100 kilowatts or less of AC electricity, and primarily serve your home’s energy needs. The exemption applies automatically to qualifying systems—the solar equipment itself isn’t taxed, though your underlying property continues to be assessed normally. This exemption has no expiration date and continues for as long as you own the qualifying solar system.

It’s worth noting that this exemption specifically covers the solar equipment (panels, inverters, and related components) as personal property. Your county assessor may still evaluate whether solar installations affect overall home values in your area during reappraisal years, but the equipment itself remains exempt from taxation. Some Colorado counties and municipalities also offer additional local incentives, so check with your local government to see if other property tax credits or rebates are available in your area.

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 applies to state sales tax and certain special district taxes (like RTD and the Scientific and Cultural Facilities District), which can result in significant savings on your solar installation.

All Colorado homeowners installing solar energy systems are eligible for this exemption on qualifying components. However, it’s important to note that the exemption does not automatically apply to city or county sales taxes unless your local government has specifically adopted it by ordinance or resolution. The exemption also doesn’t cover labor costs, energy storage devices like batteries, or remote monitoring systems. Check with your solar installer to ensure they apply this exemption at the time of purchase, and verify with your local municipality whether additional local tax exemptions are available in your area.

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 for solar systems. 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 solar system must be at least 0.5 kW in size (battery systems must be at least 6 kWh), and all equipment must be new and UL-listed. 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) generated by your system to Fort Collins Utilities for 20 years.

Before installing solar, Fort Collins Utilities recommends starting with a home energy assessment through their Epic Homes program to identify cost-effective efficiency improvements first. They also encourage homeowners to avoid removing healthy trees for solar installation, as trees provide significant energy savings and property value benefits. The utility offers on-bill financing through their Epic Loan program for qualified projects, making solar more accessible without upfront costs.

San Miguel Power Association (SMPA) offers cash rebates to members who install solar photovoltaic systems at their homes or businesses. This utility program provides a straightforward rebate of $0.10 per watt of installed solar capacity to help offset the upfront cost of going solar. The rebate is designed to support local renewable energy adoption in SMPA’s service area in Colorado.

For residential solar installations, homeowners can receive up to $300 (capped at 3 kilowatts of capacity). Commercial customers can receive up to $1,000 (capped at 10 kilowatts). To qualify, you must be an SMPA member, and your contractor must complete and submit the application on your behalf—contractors don’t need to pre-register with SMPA but must meet certain eligibility requirements. The program has application deadlines, so it’s important to work with your installer to submit paperwork promptly after installation. Contact SMPA Member Services at (970) 626-5549 or [email protected] for current deadline information and to confirm fund availability before starting your project.

The Xcel Energy Solar*Rewards Program for Low Income customers provides enhanced financial incentives to help income-qualified homeowners in Colorado afford solar energy systems. This utility program offers upfront cash payments for installing solar panels on your home, with higher incentive rates specifically designed to make solar more accessible for households that meet income requirements. The program is part of Xcel Energy’s commitment to expanding clean energy access across all communities.

Income-qualified participants receive premium incentive rates compared to the standard Solar*Rewards program. To be eligible, you must be an Xcel Energy residential electric customer in Colorado and meet specific income guidelines or participate in qualifying assistance programs. The incentive amount is based on your system size and is paid after installation and interconnection are complete. Program funding is limited and allocated on a first-come, first-served basis, so it’s important to apply early as the program can reach capacity. You’ll need to work with a qualified solar installer and complete Xcel Energy’s application process before installation begins to secure your incentive reservation.

The Xcel Energy Solar*Rewards Program – Renewable Battery Connect is a utility incentive that pays Colorado homeowners for allowing Xcel Energy to access stored energy in their home battery systems during times of high electricity demand. When you enroll your battery in this program, Xcel Energy can draw power from your battery during peak usage 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.

The financial benefit is structured as an annual payment based on your battery’s capacity and availability. Xcel Energy compensates participants for the ability to dispatch their battery storage when needed, helping to reduce strain on the grid during critical times. To be eligible, you must be an Xcel Energy customer in Colorado with an approved battery storage system installed at your home. Your battery must meet specific technical requirements and be able to communicate with Xcel Energy’s dispatch system. The program requires a multi-year commitment, and you’ll need to complete an enrollment application and interconnection agreement. Keep in mind that while Xcel Energy can access your battery during dispatch events, you maintain control over a reserve portion of your battery’s capacity for your own backup power needs.

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. For questions or to submit your application, contact the Finance – Tax & License Division at [email protected] or 303-441-3051.

Net metering in Colorado allows you to earn credits for the excess solar energy your system produces and sends back to the electric grid. When your solar panels generate more electricity than your home uses, your meter essentially runs backward, and you receive credits on your utility bill. These credits offset the cost of electricity you draw from the grid when your panels aren’t producing enough power, such as at night or on cloudy days.

The financial benefit depends on your specific utility company. Most Colorado utilities offer 1:1 net metering, meaning you receive full retail rate credit for each kilowatt-hour (kWh) you send to the grid. Your monthly credits typically roll over as either dollar credits or kWh credits. At the end of the year (or in some cases, in April), utilities handle remaining credits differently: some utilities like Xcel Energy and Black Hills Energy let you choose between cashing out at a lower rate (around 1.5-2 cents per kWh) or rolling credits over indefinitely, while others like United Power, CORE Electric Cooperative, and DMEA automatically cash out your excess credits at their avoided cost rate (typically 3-5.5 cents per kWh). Colorado Springs Utilities offers a choice between indefinite rollover or a 2 cent per kWh cash out at year-end.

Net metering is generally available to residential solar customers, though specific system size limits and requirements vary by utility. There are no application deadlines, as this is an ongoing program for solar customers. One important consideration: if you choose the rollover option with certain utilities and then move, you’ll forfeit any remaining credits. Most solar providers recommend the rollover option when available, as using your credits to offset future electricity bills at the full retail rate provides significantly more value than cashing out at the lower wholesale rates.