Colorado Solar Panels

Colorado’s Residential Energy Storage System Tax Credit allows homeowners to claim a 10% state income tax credit on the cost of a qualifying battery storage system, including battery components, sales tax, and shipping. To qualify, the system must be installed in a residential building in Colorado and have a minimum capacity of at least 3 kWh. The credit is available for tax years 2023 through 2026 and is filed using Colorado Form DR-1307 with your state income tax return for the year the system was installed.

For example, if your battery system costs $10,000, you could receive a $1,000 credit directly reducing your Colorado state income tax liability. Unlike a deduction, a tax credit reduces your tax bill dollar-for-dollar, making this a highly valuable incentive.

Important Deadline: This credit expires on December 31, 2026, with no announced extension. Homeowners considering battery storage should act before the end of 2026 to take advantage of this incentive.

Colorado offers a 100% sales tax exemption on the purchase of qualifying solar and renewable energy equipment, meaning homeowners pay zero Colorado state sales tax (2.9%) on their solar installation. Qualifying components include solar modules, inverters, mounting racks and structures, wiring, control systems, switchgear, and other system components directly related to the solar installation.

This exemption applies at the point of sale, so the savings are immediate — you simply won’t be charged state sales tax when purchasing eligible equipment. On a $20,000 solar system, this exemption could save you approximately $580 in state sales tax alone.

Note that this exemption covers the Colorado state sales tax only. Local city and county sales taxes may still apply depending on your municipality, though some localities offer additional exemptions or rebates (such as the City of Boulder’s Solar Tax Rebate Ordinance).

Under Colorado Revised Statutes § 39-3-102, independently owned residential solar electric generation facilities (photovoltaic systems) are fully exempt from Colorado property taxation. This means that even though adding solar panels increases the value of your home, that added value will not be included in your property’s assessed value for tax purposes — so your property tax bill will not go up because of your solar installation.

To qualify, the solar system must be located on residential real property, used to produce electricity from solar energy primarily for use in the residential improvements on that property, and have a production capacity of no more than 100 kilowatts (kW) AC. The vast majority of residential systems fall well within this limit.

This is a permanent, ongoing benefit — not a one-time credit. Over the life of your solar system, the property tax exemption can save homeowners hundreds or even thousands of dollars depending on their local mill levy and the added value of their system.

Colorado’s net metering policy requires investor-owned utilities (IOUs) like Xcel Energy, as well as most electric cooperatives, to offer net metering to customers with qualifying solar systems. When your solar panels produce more electricity than your home uses, the excess is sent to the grid and your utility credits your account at the full retail kilowatt-hour (kWh) rate. These credits roll over from month to month, effectively using the grid as a battery to bank summer solar production for use in winter months.

Systems sized up to 200% of the customer’s annual average consumption are eligible for net metering in investor-owned utility service territories. At the end of each calendar year, IOU customers may choose to roll over any remaining credits or receive a payment at the utility’s average hourly incremental cost. Colorado law (S.B. 18-009 and S.B. 261) also establishes that solar-plus-storage systems and standalone renewable energy storage systems are eligible for net metering.

Note that small municipal utilities serving fewer than 5,000 customers may have different net metering rules or credit rates. If you are served by a municipal utility, check directly with your provider for their specific net metering policy. Net metering is one of the most financially valuable ongoing benefits of going solar, as it can dramatically reduce or even eliminate your monthly electricity bill.

Xcel Energy’s Solar*Rewards Program provides eligible residential customers with an upfront cash rebate of $1 per watt of installed solar capacity, up to a maximum of $7,000 for a 7 kW system. For a typical 5 kW residential solar installation, this translates to a $5,000 rebate that directly offsets the cost of going solar. Pre-approval from Xcel Energy is required before installation begins, and a $100 filing fee applies for Level 1 systems.

In addition to the upfront rebate, Solar*Rewards participants can receive ongoing monthly payments in exchange for Renewable Energy Credits (RECs) generated by their system. For systems under 25 kW, the performance-based incentive is $0.005 per kWh produced. While modest, this provides a small ongoing income stream over the life of the system.

This program is available exclusively to Xcel Energy residential customers in Colorado. Because funding is limited and awarded on a first-come, first-served basis, early application is strongly recommended. Contact Xcel Energy or visit their website to check current funding availability and begin the pre-approval process before contracting with an installer.

Xcel Energy’s Solar*Rewards Income-Qualified and Disproportionately Impacted Communities (IQDIC) program offers a significantly enhanced rebate for eligible customers. Qualifying homeowners can receive $1,000 per kilowatt (kW) of installed solar capacity, up to a maximum of $10,000 for a 10 kW system. This is ten times the standard Solar*Rewards rebate rate, making solar dramatically more affordable for lower-income households and those in designated disproportionately impacted communities.

To qualify, customers must be served by Xcel Energy and meet income qualification thresholds or reside in a Colorado-designated Disproportionately Impacted (DI) community. Income qualification is generally based on household income relative to the Area Median Income (AMI) for your county. Xcel Energy can help determine eligibility during the application process.

As with the standard Solar*Rewards program, pre-approval is required before installation, and funding is limited and awarded on a first-come, first-served basis. This program historically fills quickly, so eligible customers should apply as early as possible. Visit Xcel Energy’s website or call their renewable energy team to check current funding availability and begin your application.

Xcel Energy’s Renewable Battery Connect Program provides upfront cash rebates to residential customers who install qualifying battery storage systems. Standard customers receive $350 per kW of battery capacity, up to a maximum of $5,000 per application. Income-qualified customers and those residing in Disproportionately Impacted (DI) communities receive an enhanced rebate of $800 per kW, up to 75% of the equipment-only cost. Eligible battery models include the Tesla Powerwall 2, Tesla Powerwall+, Tesla Powerwall 3, and SolarEdge Home Battery.

In addition to the upfront rebate, enrolled customers receive $100 annually for up to five years in exchange for allowing Xcel Energy to dispatch stored energy back to the grid during peak demand events. This brings the total potential benefit to $5,500 for standard customers over the full enrollment period.

Program Status (2026): The 2025 program budget was fully exhausted and the current funding cycle closed in February 2026. Xcel Energy has indicated the program may reopen with new funding mid-year 2026. Interested customers should monitor Xcel’s website for updates on funding availability before proceeding with installation.

Xcel Energy’s Public Safety Power Shutoff (PSPS) Battery Rebate provides up to $10,000 for qualifying customers who install a home battery storage system. This program is specifically designed to protect vulnerable customers who depend on electricity for life-sustaining medical equipment and who live in areas prone to Public Safety Power Shutoffs due to high wildfire risk.

To qualify, homeowners must be enrolled in Xcel Energy’s Medical Certification Program or the Colorado Medical Exception Program, and must reside in a Tier 2 or Tier 3 wildfire risk zone within Xcel’s Colorado service territory. The battery storage system must meet Xcel’s technical requirements for the program.

This rebate can be combined with other Xcel battery incentives where applicable, and may significantly offset the cost of a battery system for eligible customers. Contact Xcel Energy directly to confirm your eligibility, verify your wildfire risk tier, and begin the application process before purchasing or installing a battery system.

Holy Cross Energy’s WE CARE Program provides cash rebates to members who install net-metered solar systems. Effective April 1, 2026, all new solar net metering interconnection applications receive a flat incentive of $100 per kW of installed capacity, up to a maximum system size of 25 kW. For a typical 7 kW residential system, this equals a $700 rebate. Applications submitted through March 31, 2026 were eligible for the previous tiered rate of $250/kW for the first 6 kW and $100/kW for capacity between 6 and 25 kW.

Holy Cross Energy serves members in Eagle, Summit, Garfield, and surrounding mountain counties in Colorado. To be eligible, you must be a Holy Cross Energy electric member and install a qualifying net-metered solar system. The rebate is paid after installation and interconnection approval.

The maximum lifetime incentive any HCE member can receive for renewable generation ownership is $30,000. This lifetime cap applies across all solar rebates received from Holy Cross Energy. Members who also install battery storage through the Power+FLEX program have a separate lifetime cap for storage incentives, allowing for a combined total of up to $45,000 in lifetime incentives from HCE.

Holy Cross Energy’s Power+FLEX Program rewards members who install a home battery storage system and enroll it in one of HCE’s demand-response tariffs. Members who enroll in the Distribution Flexibility Program Tariff receive an upfront incentive of $500 per kW of enrolled battery capacity, up to a maximum of $12,500. Members who enroll in the Time of Day Tariff instead can earn $250 per kW or $100 per kWh of capacity, also up to $12,500. Additionally, HCE provides a monthly credit of $10.30 per kW of enrolled battery capacity for five years.

To be eligible, you must be a Holy Cross Energy electric member and install a qualifying battery storage system that meets HCE’s technical requirements. Enrollment in one of the qualifying demand-response tariffs is required to receive the incentive, as HCE uses enrolled batteries to help manage grid demand during peak periods.

The lifetime cap for energy storage incentives is $15,000 per member, which is entirely separate from the $30,000 lifetime cap for renewable generation (solar) incentives. This means a Holy Cross member who installs both solar and battery storage could potentially receive up to $45,000 in total lifetime incentives from HCE — one of the most generous combined solar-plus-storage incentive packages available from any Colorado utility.

Fort Collins Utilities offers a residential solar rebate of $300 per kilowatt (kW) of installed solar capacity, up to a maximum rebate of $1,500 for a 5 kW system. The minimum qualifying system size is 500 watts (0.5 kW). This rebate is available to Fort Collins Utilities electric customers who own their solar system (leased systems do not qualify).

To receive the rebate, the solar installation must be performed by a Fort Collins-approved contractor, and the system must pass all required inspections. Customers should apply for the rebate before installation begins to ensure eligibility and confirm current funding availability, as rebate programs are subject to available budget.

Fort Collins Utilities also offers a separate battery storage rebate that can be combined with the solar rebate for customers who install both systems. Together, these programs make Fort Collins one of the more supportive municipal utilities in Colorado for residential solar and storage adoption.

Fort Collins Utilities offers a residential battery storage rebate of $300 per kWh of battery capacity, up to a maximum of $6,000. To qualify, the battery storage system must be paired with a solar panel installation and must have a minimum capacity of 6 kWh. This rebate is available to Fort Collins Utilities electric customers who own their battery system.

For a typical 10 kWh battery system, this rebate would provide $3,000 in savings. A 20 kWh system would reach the maximum $6,000 rebate cap. The battery must be installed by a Fort Collins-approved contractor and pass all required inspections to qualify for the rebate.

This battery rebate can be combined with the Fort Collins Utilities residential solar rebate (up to $1,500), allowing customers who install both solar and storage to receive up to $7,500 in total rebates from Fort Collins Utilities. Customers should apply before installation and confirm current funding availability, as this program is subject to available budget.

Black Hills Energy offers income-qualified residential customers in Colorado a solar rebate of $1 per watt of installed solar capacity for systems ranging from 0.5 kW to 25 kW. For a typical 7 kW system, this equals a $7,000 upfront rebate. Eligibility is based on household income relative to the Area Median Income (AMI); customers should contact Black Hills Energy to confirm their qualification status.

In addition to the upfront rebate, income-qualified customers can receive a production incentive of approximately 3.8 cents per kWh generated by their solar system for 10 years. This ongoing payment provides additional financial benefit over the life of the system and can meaningfully improve the overall return on investment for going solar.

Black Hills Energy also offers a battery storage rebate that can be combined with the solar rebate for eligible customers. Customers interested in these programs should contact Black Hills Energy directly to verify current eligibility requirements, funding availability, and application procedures, as program details are subject to change.

Black Hills Energy offers a battery storage rebate of $100 per kWh of energy storage capacity, up to a maximum of $1,000 per customer. To qualify, the battery storage system must be installed alongside a solar photovoltaic (PV) system — standalone battery installations without solar do not qualify for this rebate.

For a 10 kWh battery system, this rebate provides $1,000 in savings, reaching the program maximum. This rebate can be combined with Black Hills Energy’s solar rebate programs for eligible customers, helping to further offset the combined cost of a solar-plus-storage installation.

Customers should contact Black Hills Energy directly to confirm current program availability, eligibility requirements, and application procedures before purchasing or installing a battery system. Program details and funding availability are subject to change.

Colorado Springs Utilities (CSU) offers a Renewable Energy Rebate for residential customers who install rooftop solar systems. The rebate is $0.10 per watt of installed solar capacity for systems up to 15 kW. For a typical 7.5 kW residential system, this translates to approximately $750 in rebate savings. Most residential solar installations in Colorado fall well within the 15 kW system size limit.

To be eligible, you must be a Colorado Springs Utilities electric customer and own your solar system. The installation must be performed by a licensed contractor and meet all CSU interconnection and technical requirements. Pre-approval from CSU is recommended before installation begins.

While the per-watt rebate amount is modest compared to some other Colorado utilities, it can still provide meaningful savings when combined with Colorado’s state-level tax exemptions and the battery storage tax credit. Contact Colorado Springs Utilities directly to confirm current program availability and begin the application process.

The City of Boulder’s Solar Grant Program provides financial assistance to income-qualified residents and nonprofit organizations installing new rooftop solar systems. The grant is valued at $1 per watt of installed solar capacity, up to a maximum of $8,000 or 50% of the total system cost, whichever is lower. For a 5 kW system costing $15,000, for example, the grant could provide $5,000 — significantly reducing the out-of-pocket cost of going solar.

To qualify, applicants must be Boulder residents who meet low-to-moderate income thresholds. Applications are accepted on a rolling, first-come, first-served basis through EnergySmart program partners, so early application is strongly encouraged as funds are limited. The grant is processed through registered EnergySmart contractors who can assist with the application.

This grant can be combined with Colorado’s statewide sales tax exemption, property tax exemption, and battery storage tax credit (if applicable), making it possible for income-qualified Boulder residents to dramatically reduce the net cost of a solar installation. Contact the City of Boulder or an EnergySmart partner contractor to begin the application process.

The City of Boulder’s Solar Rebate Ordinance, enacted in 2008, provides a rebate of approximately 15% of the city sales and use tax paid on materials and permits for a solar installation. This rebate is available to all Boulder solar customers — not just income-qualified residents — and is separate from Colorado’s statewide 2.9% sales tax exemption, which applies to state sales tax. Boulder’s rebate specifically addresses the city’s local sales and use tax.

To receive the rebate, you must file a rebate application with the City of Boulder within 12 months of the city’s final inspection of your solar system. Applications submitted after this 12-month deadline will not be accepted, so it is important to track your installation timeline and submit promptly after receiving final inspection approval.

While the dollar amount of this rebate is relatively modest compared to other incentives, it is available to all Boulder solar customers regardless of income and requires minimal effort to claim. Combined with Colorado’s statewide sales tax exemption and other available incentives, it helps further reduce the overall cost of going solar in Boulder.

The City of Centennial offers a solar rebate of up to $300 for homeowners who install solar panels through its Home Improvement Program. While modest in dollar amount, this rebate can be combined with other state and utility incentives to further reduce the net cost of a residential solar installation for Centennial residents.

Eligibility and application details are managed through the City of Centennial. Homeowners should contact the city directly or visit the official Centennial website to confirm current program availability, eligibility requirements, and the application process before proceeding with a solar installation.

Centennial residents who are also Xcel Energy customers may be able to stack this local rebate with Xcel’s Solar*Rewards program, Colorado’s statewide sales tax exemption, and the property tax exemption for a more comprehensive package of solar incentives.

Tesla’s Powerwall 3 Rebate Program (also referred to as the “Next Million Powerwall 3 Rebate Program”) offers homeowners $500 back per Powerwall 3 unit installed, covering both the Powerwall 3 and Powerwall 3 Expansion units. The maximum rebate is $1,000 per address (two units). This is a manufacturer-direct rebate offered by Tesla, not a government or utility program.

To qualify, the sale must be finalized and the rebate registered by June 30, 2026, and the installation must be completed by December 31, 2026. Missing either deadline will disqualify the system from receiving the rebate, so it is important to plan your purchase and installation timeline carefully.

This rebate can be combined with Colorado’s 10% Residential Energy Storage Tax Credit, and — where applicable — with utility battery rebates such as Xcel Energy’s Renewable Battery Connect Program (when funding is available) or Holy Cross Energy’s Power+FLEX Program. Stacking multiple incentives can significantly reduce the net cost of a Powerwall 3 installation in Colorado.

The Colorado Residential Energy Upgrade (RENU) Loan Program, offered through the Colorado Clean Energy Fund in partnership with state credit unions, provides affordable financing for homeowners who want to install solar panels or make other clean energy improvements. The program is designed to make the upfront cost of solar more manageable by offering competitive interest rates and flexible repayment terms that are often more favorable than traditional home improvement loans.

The RENU Loan is available to Colorado homeowners and can be used to finance solar panel systems, battery storage, and other qualifying clean energy upgrades. Because the loan is administered through local credit unions, borrowers benefit from working with community-based lenders who are familiar with Colorado’s clean energy landscape.

To apply, homeowners should visit the Colorado Clean Energy Fund’s website to find a participating credit union and begin the application process. Using a RENU Loan in combination with available rebates and tax credits can help homeowners go solar with little to no money out of pocket, with loan payments often offset by monthly electricity bill savings.