Greeley, CO Solar Panels

Colorado’s Property Tax Exemption for residential solar systems means that homeowners don’t pay property taxes on their solar equipment. When you install a solar system on your home, the solar panels and related equipment are classified as personal property that’s exempt from taxation. This exemption applies specifically to the solar equipment itself—not the underlying real property value of your home.

To qualify for this exemption, your solar system must be located on residential property, owned by you (the homeowner), produce electricity primarily for use in your home, and have a production capacity of no more than 100 kilowatts of AC electricity. Most residential solar systems easily fall within this capacity limit. The exemption is automatic and ongoing—there’s no expiration date or time limitation, so you’ll continue to benefit from it for as long as you own the system. This means you can enjoy the energy savings from your solar panels without worrying about an increased property tax bill due to the added value of your solar equipment.

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 qualifying 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 (SCFD) taxes.

The financial benefit depends on your system size and equipment costs. For example, on a typical $25,000 solar installation, you could save approximately $725 in state sales tax. However, it’s important to note that this 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 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 for this exemption—it applies automatically at the time of purchase for all qualifying residential solar installations.

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, as efficiency improvements often provide better financial returns. 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 the Epic Loan program for qualified projects, making solar more accessible with competitive rates and no money down.

San Miguel Power Association (SMPA) offers cash rebates to members who install solar photovoltaic systems on their properties in Colorado. 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 both homeowners and businesses in their transition to renewable energy.

Residential solar installations are eligible for up to $300 (capped at 3 kW of capacity), while commercial systems can receive up to $1,000 (capped at 10 kW). To receive the rebate, your solar contractor must complete and submit the application on your behalf using SMPA’s official rebate forms. Contractors must meet certain eligibility requirements, and deadlines do apply, so it’s important to discuss the rebate process with your installer early in the planning stages. For questions about the program or to confirm your eligibility as an SMPA member, contact their Member Services team at (970) 626-5549 or [email protected].

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 higher upfront payments compared to the standard Solar*Rewards program, making clean energy more accessible to households that meet specific 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 offers. To qualify, you must be an Xcel Energy customer in Colorado and meet income eligibility guidelines, which are typically based on a percentage of the area median income or participation in certain assistance programs. The program operates on a first-come, first-served basis with limited funding available each year, so it’s important to apply early. Your solar system must be installed by an approved 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 based on your battery’s capacity and performance.

Homeowners receive $300 per kilowatt (kW) of battery capacity each year for participating in the program. For example, if you have a 10 kW battery system, you would receive $3,000 annually. These payments continue for the length of your enrollment in the program. 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 Xcel Energy’s technical requirements and be able to communicate with their dispatch system.

There are a few important considerations to keep in mind. During dispatch events, Xcel Energy will use a portion of your battery’s stored energy, which means it may not be fully available for your own use during those times. However, dispatch events are typically limited and scheduled during peak demand periods. You’ll need to sign a participation agreement that outlines the terms of the program, including how often your battery can be dispatched. This program works well alongside solar panels, as your system can recharge the battery between dispatch events, but solar panels are not required to participate.

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 offset the upfront costs 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. This rebate applies only to Boulder city sales and use tax—not state or county taxes.

Net metering in Colorado allows you to earn credits when your solar panels produce more electricity than your home uses. These excess kilowatt-hours (kWh) are sent back to the grid, and your utility company credits your account at a 1:1 rate—meaning each kWh you send to the grid offsets one kWh you use later. This arrangement helps you maximize the value of your solar investment by ensuring no solar energy goes to waste.

How net metering works depends on your specific utility company. Most Colorado utilities let you carry credits forward from month to month as either dollar credits or kWh credits. At the end of an annual period (typically in March or April), you’ll have options for any remaining credits. Some utilities like Xcel Energy and Black Hills Energy offer a choice: you can 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). Other utilities like United Power, CORE Electric Cooperative, and DMEA automatically cash out excess credits annually at their avoided cost rate, which ranges from about 3 to 5.5 cents per kWh.

If you’re a customer of Grand Valley Power Cooperative, you’ll be on time-of-use (TOU) rates, which means your credits are tracked separately for on-peak and off-peak periods. Energy generated during one time period can only offset consumption during that same period. Most utilities 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 receiving a small cash payment. Keep in mind that if you move, any rolled-over credits typically don’t transfer to your new home, so the cash-out option might make more sense if you’re planning to relocate soon.