Grand Junction, 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 your home, and have a production capacity of no more than 100 kilowatts of AC electricity. This exemption applies only to the solar equipment itself, not to the underlying real property. There is no expiration date for this incentive, making it a permanent benefit for homeowners who install qualifying systems.

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, providing immediate savings when purchasing a solar system.

Eligible components include solar modules, supporting structures, inverters, wiring, control systems, and other essential equipment needed for solar electricity production. However, the exemption doesn’t cover labor costs, energy storage devices like batteries, or remote monitoring systems. It’s important to note that while state and special district taxes are exempt, most city and county sales taxes still apply unless the local government has specifically adopted the exemption by ordinance.

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 must 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, homeowners assign 20 years of Renewable Energy Credits (RECs) to Fort Collins Utilities. Systems must be installed within six months of receiving the rebate reservation letter. Additionally, homeowners may be eligible for the 30% federal tax credit for solar installations through 2032 (decreasing 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 3 kilowatts or $300. Commercial customers are eligible for the same rate of $0.10 per watt but with a higher cap of 10 kilowatts 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, so it’s important to check with SMPA Member Services at (970) 626-5549 or [email protected] for current timelines. For additional information about complementary energy efficiency rebates and other incentives, visit the energy efficiency section of SMPA’s website.

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 solar panel systems installed on homes of eligible low-income residents, helping to reduce electricity costs while supporting clean energy adoption.

Participants receive monthly payments from Xcel Energy based on the amount of solar energy their system produces. These payments come in the form of Renewable Energy Credits (RECs) that Xcel purchases from you at a predetermined rate. The program specifically targets households that might otherwise find solar installation financially challenging, making renewable energy more equitable and accessible across Colorado communities.

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 production-based incentives for the energy your battery system contributes to the grid during peak demand periods, helping to offset your installation costs while supporting grid stability.

To participate, you must be an Xcel Energy customer in Colorado with a qualifying battery storage system connected to a solar installation. The program requires you to allow Xcel Energy limited access to your battery during peak demand times. While specific incentive amounts may vary based on current program offerings, participants typically receive monthly bill credits based on how much energy their battery provides to the grid when needed. For the most current incentive rates and program details, it’s recommended to contact Xcel Energy directly or visit their website.

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 on city sales and use taxes paid on materials and permits related to your solar installation. This rebate helps reduce the overall cost of going solar while supporting Boulder’s commitment to renewable energy.

To qualify, you must submit your rebate application within 12 months of the city’s final inspection of your solar system. The application process requires completing the Solar Tax Rebate Application form and an Affidavit of Legal Residency, along with submitting receipts from your project and a photocopy of your identification. All materials should be mailed to the City of Boulder Finance office. Keep in mind that rebates are subject to funding availability, so it’s advisable to apply promptly after your installation is complete.

Net Metering in Colorado is a valuable program that allows solar homeowners to receive full credit for excess electricity their system sends back to the grid. When your solar panels produce more electricity than your home uses, this surplus energy flows to the utility grid, and you receive a credit on your bill at a 1:1 rate – meaning each kilowatt-hour (kWh) you export is worth the same as one you would purchase from the utility.

These credits can be applied to future electricity bills when your solar system isn’t producing enough to cover your needs, such as during nighttime or cloudy days. This effectively allows you to use the electric grid as a virtual battery, storing the value of your excess production for later use.

The specific handling of excess credits varies by utility company in Colorado. Most utilities allow 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 per kWh). Colorado Springs Utilities offers similar options with a 2 cents per kWh cash-out rate, while CORE Electric Cooperative (formerly IREA) automatically cashes out credits in April at 5.5 cents per kWh.

When considering solar with net metering in Colorado, it’s important to understand your specific utility’s policies. For most homeowners, choosing the rollover option rather than the cash-out is more financially beneficial, as using your credits directly offsets retail electricity rates (which are much higher than the cash-out rates). Additionally, if you plan to move, be aware that with the rollover option, any accumulated credits typically cannot be transferred and may be forfeited.