Colorado Solar Panels

Colorado’s Residential Energy Storage System Tax Credit allows homeowners to claim a 10% state income tax credit on the total cost of a qualifying battery storage system, including battery components, applicable sales tax, and shipping costs. The credit is filed using the DR-1307 form through the Colorado Department of Revenue when you submit your state income taxes.

To qualify, the battery system must be installed in a Colorado residence and have a minimum usable capacity of 3 kWh. The credit is based on when your system is placed in service — meaning your battery must be fully installed and operational before January 1, 2027, to claim it on your 2026 taxes. For example, a $15,000 battery system would generate a $1,500 state tax credit.

Important deadline: This credit expires on December 31, 2026, with no announced extension. Homeowners planning to install battery storage should act before year-end to take advantage of this incentive before it disappears.

Colorado provides a full state sales tax exemption on the purchase of qualifying solar 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, and other components directly related to the solar installation.

This exemption is applied automatically at the point of purchase — you don’t need to file a separate application. On a typical Colorado residential solar installation costing $25,000–$35,000, the state sales tax exemption saves approximately $725–$1,015 in upfront costs.

Note that this exemption covers Colorado state sales tax only. Local city and county sales taxes may still apply depending on your municipality, though some localities (such as the City of Boulder) offer additional local tax rebates on top of the state exemption.

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 market value of your home, that added value is not included in your property’s assessed value — so your property tax bill will not go up because of your solar installation.

To qualify, the solar electric generation facility must be located on residential real property, used to produce electricity from solar energy primarily for use in the residential improvements, and have a production capacity of no more than 100 kilowatts (AC). A $26,000 solar system, for example, adds zero assessed value under this exemption.

This exemption applies permanently for as long as the solar system remains on the property, providing ongoing tax savings year after year. There is no application deadline — the exemption is a standing provision of Colorado law that applies automatically to qualifying residential solar installations.

Colorado law requires all investor-owned utilities — primarily Xcel Energy and Black Hills Energy — to offer net metering to residential solar customers. Under this policy, you receive a full retail-rate credit for every kilowatt-hour your solar system exports to the grid, the same rate you pay to purchase electricity. This is one of the strongest net metering policies in the country. Municipal utilities and electric cooperatives are not required to offer net metering, but most larger ones do.

Xcel Energy allows net-metered solar systems sized up to 200% of your annual electricity usage. Excess credits roll forward automatically to the next billing cycle. At the end of each calendar year, customers can choose to roll remaining credits into the next year indefinitely, or request a cash payout at Xcel’s Average Hourly Incremental Cost rate. Customers can also opt to receive kWh-based credits applied to future bills instead of cash.

Locking in net metering now is advantageous because homeowners who go solar today lock in current policy terms for the life of their interconnection agreement. States like California have already moved away from full retail crediting, and waiting carries regulatory risk on top of paying higher electricity bills in the meantime.

Xcel Energy’s Solar*Rewards Program provides upfront solar rebates to eligible residential customers in Colorado. The 2026 program opened on May 21, 2026 with a renewed incentive budget. Customers who qualify as Income Qualified or residing in Disproportionately Impacted (DI) Communities can receive an upfront rebate of $1 per watt of installed solar capacity, up to 10 kW AC. For a typical 5 kW system, this equals a $5,000 rebate — a significant reduction in upfront costs.

In addition to the upfront rebate, Solar*Rewards also offers a production incentive of approximately $0.02 per kWh generated by your solar system, paid over a 20-year contract term. Enrolling sooner locks in the current rate for the full contract period, as this per-kWh rate may decrease in future program years.

To apply, contact Xcel Energy or visit their official website before installation, as pre-approval is typically required. Eligibility is based on income relative to Area Median Income (AMI) or residence in a designated Disproportionately Impacted community within Xcel’s Colorado service territory.

Xcel Energy’s Renewable Battery Connect Program provides upfront rebates for qualifying home battery storage systems. The 2026 program opened on May 21, 2026 with a renewed incentive budget. Standard customers receive $350 per kW of battery capacity, up to $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 all Tesla Powerwall models and all current Enphase models.

In addition to the upfront rebate, enrolled customers receive an ongoing payment of $100 per year for up to five years in exchange for allowing Xcel Energy to dispatch stored energy back to the grid during peak demand events — a virtual power plant arrangement that benefits both the homeowner and the broader grid.

Important note: The 2025 program budget was fully exhausted and the funding cycle closed in February 2026. The 2026 program has since reopened with new funding as of May 21, 2026. Pre-approval is required before installation, so contact Xcel Energy or visit their official website to confirm current availability and apply before your installation date.

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. This rebate can be stacked with other Xcel battery incentives where eligible, making it one of the most valuable battery rebates available to qualifying customers.

Contact Xcel Energy directly to confirm your eligibility, verify your wildfire risk tier, and obtain pre-approval before purchasing or installing a battery system. As with all Xcel rebate programs, pre-approval before installation is strongly recommended.

Holy Cross Energy’s WE CARE Solar Rebate Program provides financial incentives to members installing rooftop solar. 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 before April 1, 2026 under the older tiered structure ($250/kW for the first 6 kW, $100/kW for 6–25 kW) must have the system installed and receive permission to operate by August 31, 2026.

The lifetime cap for renewable generation (solar) incentives is $30,000 per member, which is entirely separate from the energy storage incentive cap. Holy Cross Energy serves the Vail, Aspen, and Eagle County region of Colorado, so this program is available to members in those areas.

To apply, contact Holy Cross Energy or visit their official website before beginning your solar installation. Pre-approval and a net metering interconnection application are required to participate in the program.

Holy Cross Energy’s Power+FLEX Battery Storage Program provides upfront financial incentives for members who install a home battery storage system and allow HCE limited access to dispatch stored energy during grid events. Members who enroll in the Distribution Flexibility Program Tariff receive an upfront incentive of $500 per kW, up to $12,500. Members who instead enroll in the Time of Day Tariff can earn $250 per kW or $100 per kWh, up to $12,500.

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 incentive structures offered by any Colorado utility.

Holy Cross Energy serves the Vail, Aspen, and Eagle County region of Colorado. Contact HCE directly or visit their official website to confirm eligibility, select the appropriate tariff enrollment, and obtain pre-approval before purchasing your battery system.

Fort Collins Utilities offers one of the more generous municipal solar rebate programs in Colorado. Residential customers can receive a rebate of $300 per kW of installed solar capacity, up to a maximum of $1,500 (for a 5 kW system). The minimum qualifying system size is 500 watts (0.5 kW). This rebate is available exclusively to customers within the Fort Collins Utilities service territory.

For the 2026 program, homeowners must register their project by March 31, 2026 to lock in the 2026 rebate amounts, and the system must be fully installed and inspected by September 30, 2026. Missing these deadlines may result in forfeiture of the rebate or a lower rebate amount in a future program year.

This solar rebate can be combined with the Fort Collins Utilities battery storage rebate (up to $6,000), allowing customers who install both solar and storage to receive up to $7,500 in total rebates from Fort Collins Utilities alone — before stacking state and other incentives.

Fort Collins Utilities offers a residential battery storage rebate of $300 per kWh of usable battery capacity, up to a maximum of $6,000. To qualify, the battery storage system must be paired with a solar panel installation (either existing or newly installed) and must have a minimum capacity of 6 kWh. This rebate is available to customers within the Fort Collins Utilities service territory.

When combined with the Fort Collins Utilities residential solar rebate (up to $1,500), customers who install both solar and battery storage can receive a combined maximum of $7,500 in total rebates from Fort Collins Utilities. This combined ceiling makes Fort Collins one of the most rewarding municipal utility programs in Colorado for solar-plus-storage installations.

Contact Fort Collins Utilities or visit their official website before installation to confirm current program availability, eligibility requirements, and application deadlines. Pre-approval before installation is strongly recommended to ensure you qualify for the rebate.

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 — one of the largest utility solar rebates available in Colorado. Eligibility is based on household income relative to the Area Median Income (AMI); customers should contact Black Hills Energy directly 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 further reduces the effective cost of going solar and improves the long-term return on investment.

Black Hills Energy also offers all customers a $100 per kW rebate for paired battery storage systems, capped at $1,000 per customer. Contact Black Hills Energy directly to apply, confirm income eligibility, and obtain pre-approval before purchasing or installing your solar system.

Colorado Springs Utilities (CSU) offers a residential solar rebate to customers within its service territory. The rebate provides a cashback incentive of up to $0.10 per watt of installed solar capacity, which averages approximately $750 for a typical Colorado residential system.

This rebate is available to Colorado Springs Utilities customers who install a qualifying grid-tied solar photovoltaic system on their home. Contact Colorado Springs Utilities directly to confirm current program availability, exact rebate amounts, system size requirements, and application procedures before beginning your solar installation.

Pre-approval before installation is strongly recommended, as utility rebate programs can change or exhaust their budgets. Stacking this rebate with Colorado’s state-level sales tax exemption and property tax exemption can further reduce the overall cost of going solar in the Colorado Springs area.

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. Boulder’s rebate specifically addresses the city’s local sales and use tax, which the state exemption does not cover.

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. Be sure to retain all receipts for materials and permits, as these will be required to document the amount of local sales and use tax paid.

This rebate can be stacked with Colorado’s statewide sales tax exemption, the property tax exemption, and any applicable utility rebates, making Boulder one of the more incentive-rich cities in Colorado for residential solar installations.

The City of Boulder’s Income-Qualified 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.

This grant is specifically targeted at lower-income Boulder residents and nonprofits who may face greater financial barriers to solar adoption. Eligibility is based on household income; contact the City of Boulder directly to confirm income thresholds and required documentation.

This grant can be combined with the City of Boulder’s Sales and Use Tax Rebate, Colorado’s statewide sales tax exemption, the property tax exemption, and applicable utility rebates, making it possible for income-qualified Boulder residents to dramatically reduce the net cost of a solar installation.

The City of Golden offers residential rebates for both solar and battery storage installations. Homeowners can receive up to $3,000 for a solar PV system and a separate rebate of up to $3,000 for a battery backup system (battery storage requires existing or new solar). Combined, Golden homeowners installing both solar and battery storage can receive up to $6,000 in city rebates alone, before stacking Xcel Energy, state, and manufacturer incentives.

To qualify for the solar rebate, homeowners must provide proof of Xcel Energy permission to operate, confirming the system has been approved and connected to the grid. The battery rebate requires that the battery be paired with a qualifying solar installation.

Contact the City of Golden directly to confirm current program availability, exact rebate amounts, eligibility requirements, and application procedures. These local rebates can be stacked with Xcel Energy’s Solar*Rewards and Renewable Battery Connect programs, Colorado’s state tax exemptions, and the Colorado battery storage tax credit for maximum savings.

The City of Centennial offers a modest but stackable solar rebate of up to $300 for residential solar panel installations within city limits. While smaller than some other municipal programs, this rebate can be combined with Xcel Energy utility rebates, Colorado’s statewide sales tax exemption, the property tax exemption, and the Colorado battery storage tax credit to maximize overall savings.

Contact the City of Centennial directly to confirm current program availability, eligibility requirements, minimum system size, and application procedures before beginning your solar installation. Pre-approval before installation is recommended.

Centennial residents who are also Xcel Energy customers may be eligible to stack this city rebate with Xcel’s Solar*Rewards program (for income-qualified customers) and the Renewable Battery Connect program for battery storage, making the combined incentive package more substantial.

Tesla’s 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 (limited to two units). This manufacturer rebate is available directly from Tesla and can be stacked with utility and state incentives.

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 installation from the rebate, so homeowners should plan their purchase and installation timeline carefully.

This rebate is particularly valuable when combined with Colorado’s 10% Residential Energy Storage Tax Credit (DR-1307), Xcel Energy’s Renewable Battery Connect Program, and any applicable local city rebates — all of which can be layered together to significantly reduce the net cost of a Powerwall 3 installation in Colorado.

The Colorado Residential Energy Upgrade (RENU) Loan Program is administered through the Colorado Clean Energy Fund in partnership with local credit unions across the state. It provides affordable financing for homeowners who want to install solar panels, battery storage, or other qualifying clean energy improvements — without requiring collateral or hidden fees.

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. Loan rates are competitive and designed to make solar and storage accessible to homeowners who may not have the upfront capital to pay cash for a system.

To apply, homeowners should visit the Colorado Clean Energy Fund’s website to find a participating credit union in their area and begin the application process. The RENU Loan can be used in conjunction with all available rebates and tax credits — meaning you can finance the full system cost and then apply rebates and credits to pay down the loan balance, further reducing your out-of-pocket costs.