Colorado Solar Panels

Colorado law (§ 39-3-102, C.R.S.) exempts independently owned residential solar electric generation facilities from property taxation. This means that even though adding solar panels increases your home’s market value, the added value from the solar system will not be included in your property tax assessment — saving you money every year you own the system.

To qualify, the solar system must be located on residential real property, used to produce electricity from solar energy primarily for use in that residence, and have a production capacity of no more than 100 kilowatts (AC). The exemption applies to the renewable energy equipment itself, not the underlying land or home structure.

This is an automatic, ongoing benefit — there is no application required. As long as your system meets the eligibility criteria, you are entitled to the exemption. It is one of the easiest and most valuable long-term financial benefits of going solar in Colorado.

Colorado offers a 100% exemption from the state’s 2.9% sales tax on the purchase of residential solar system equipment. This exemption applies at the point of sale, meaning you simply won’t be charged state sales tax when you buy qualifying solar components — no rebate application or reimbursement process is needed.

The exemption covers state-administered special district sales taxes but does not apply to most state-administered city and county sales taxes. On a typical 5 kW solar system costing around $15,000, the state sales tax exemption could save you approximately $435 or more.

This benefit is available to all Colorado homeowners purchasing solar equipment, regardless of income. It stacks well with other incentives such as utility rebates and the state battery storage tax credit, helping to further reduce your total out-of-pocket cost.

Colorado’s Residential Energy Storage System Tax Credit allows homeowners to claim a 10% state income tax credit on the purchase of a qualifying home battery backup system. The credit applies to the cost of battery components, sales tax, and shipping — and is not reduced by any utility rebates you may also receive. The credit is available for tax years 2023 through 2026.

To qualify, the energy storage system must be installed in a residential building in Colorado and meet minimum capacity requirements (at least 3 kWh). The credit is filed using Colorado Form DR-1307 when you submit your state income tax return for the year the system was installed.

For example, if your battery storage system costs $10,000 (including tax and shipping), you could receive a $1,000 state tax credit. This credit can be combined with utility battery rebates (such as Xcel Energy’s Renewable Battery Connect Program) to maximize your total savings on battery storage.

Colorado’s net metering policy is one of the strongest in the nation. When your solar panels produce more electricity than your home uses, the excess energy is sent back to the grid and your utility credits your account at the full retail electricity rate — meaning each kilowatt-hour (kWh) you export is worth the same as a kWh you would otherwise purchase. This significantly improves the financial return on your solar investment.

Net metering applies to all regulated utilities and electric cooperatives in Colorado (excluding small municipal utilities). Credits accumulate on your bill and roll over from month to month. If you end the year with a net surplus of credits, your utility is required to reimburse you for those excess credits, or you may opt to roll them over to the following year.

For Xcel Energy customers, net metering is available for systems producing up to 200% of your annual electricity usage. As of 2026, Colorado Springs Utilities confirmed no changes to the flat-rate net metering structure. Xcel Energy is also launching a Virtual Power Plant program in 2026 to coordinate battery storage alongside net metering for additional grid benefits.

Xcel Energy’s Solar*Rewards Program provides upfront cash rebates to eligible customers who install rooftop solar. Income-qualified residents and those living in Disproportionately Impacted (DI) communities can receive $1,000 per kilowatt (kW) for systems up to 10 kW — meaning a typical 5 kW system could earn a $5,000 rebate. Standard-rate rebates are also available at $1 per watt for general customers, subject to available funding.

Payments are made within 60 days of receiving Permission to Operate (PTO) from Xcel. In exchange, Xcel claims the Renewable Energy Credits (RECs) generated by your system for 20 years. The program is income-qualified, so eligibility is based on household income relative to the area median income.

Important note for 2026: The 2025 program budget was fully exhausted, and Xcel has not yet confirmed 2026 funding availability for the Renewable Battery Connect and related programs. Interested customers should apply early in 2026 and monitor Xcel’s website for funding updates, as spots are limited and awarded on a first-come, first-served basis.

Xcel Energy’s Renewable Battery Connect Program provides upfront cash incentives to customers who install an eligible home battery storage system and allow Xcel to manage the battery during peak demand periods. Standard customers receive $350 per kW of battery capacity, up to $5,000 per application, plus an additional $100 annually for continued enrollment (for up to 5 years). Income-qualified customers and those in Disproportionately Impacted communities receive an enhanced incentive 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. By enrolling, you agree to allow Xcel to automatically charge or discharge up to 60% of your battery up to 60 times per year during high-demand grid events — helping stabilize the grid while you earn incentives.

As of early 2026, Xcel has not yet released program funding for the Renewable Battery Connect or the Income-Qualified/DI Community Battery Rebate programs. Customers should check Xcel’s website frequently for funding announcements, as these programs are popular and funds are limited. Xcel is also launching a Virtual Power Plant program in 2026 that will coordinate enrolled batteries for additional grid support.

Holy Cross Energy (HCE) provides upfront solar rebates to its members in Eagle, Summit, and parts of Garfield County. Through March 31, 2026, the rebate is tiered: $250 per kW for the first 6 kW of system capacity, and $100 per kW for capacity between 6 and 25 kW. Starting April 1, 2026, all new solar net metering applications will qualify for a simplified flat rate of $100 per kW, up to a maximum system size of 25 kW.

The maximum lifetime incentive any HCE member can receive related to renewable generation ownership is $30,000. Incentives are subject to available funds and are awarded on a first-come, first-served basis, so early application is recommended.

Holy Cross Energy also offers additional incentives for battery storage systems that meet HCE program requirements (see the Power+FLEX Battery Program). These storage incentives are separate from and in addition to the solar generation incentives, allowing members to stack both benefits for maximum savings.

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 can receive an upfront incentive of $500 per kW of enrolled battery capacity, up to a maximum of $12,500. Members who instead enroll in the Time of Day Tariff can earn $250 per kW or $100 per kWh, also up to $12,500.

The overall member limit for energy storage system incentives is $15,000 (lifetime), which is separate from and in addition to the $30,000 lifetime limit for renewable generation 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.

Incentives are subject to available funds and awarded on a first-come, first-served basis. Holy Cross Energy serves Eagle, Summit, and parts of Garfield County in Colorado. Members should contact HCE directly or visit their website to confirm current program availability and enrollment requirements before purchasing a battery system.

Black Hills Energy customers in Colorado who install a battery storage system paired with solar can receive a rebate of $100 per kWh of energy storage capacity, up to a maximum of $1,000 per customer. This rebate is specifically for battery storage systems installed alongside a solar photovoltaic system.

Black Hills Energy also offers income-qualified customers a solar rebate of $1 per watt for systems ranging from 0.5 kW to 25 kW, plus a production incentive of approximately 3.8 cents per kWh for 10 years. These solar and storage incentives can be combined for eligible customers to maximize overall savings.

Availability of funds and specific program terms may change, so Black Hills Energy customers should contact the utility directly or visit their official website to confirm current rebate amounts, eligibility requirements, and application procedures before purchasing a system.

Customers of City of Fort Collins Utilities can receive a rebate of $300 per kW for a new residential solar installation, up to a maximum of $1,500. For battery storage, the rebate is $300 per kWh of capacity, up to $6,000. The combined maximum rebate for both a new solar system and battery storage together is $7,500. Systems must be at least 500 watts to qualify.

Fort Collins Utilities is one of the few Colorado utilities currently offering active solar and battery incentives in 2026. The program is available to residential electric customers within the Fort Collins Utilities service territory. Commercial customers may also be eligible for a separate solar rebate of up to $50,000.

These rebates can be combined with the Colorado state battery storage tax credit (10%) and the Colorado solar sales and property tax exemptions to significantly reduce the total cost of a solar-plus-storage system. Customers should apply through Fort Collins Utilities and confirm current funding availability before purchasing equipment.

The City of Boulder offers solar grants to income-qualified residents and nonprofit organizations that install new rooftop solar systems. The grant is valued at $1 per watt of installed solar capacity, up to a maximum of $8,000. Grant applications are accepted on a rolling, first-come, first-served basis, so early application is strongly encouraged.

In addition to the solar grant, Boulder also offers a Sales and Use Tax Rebate under its Solar Rebate Ordinance (enacted in 2008). This rebate returns approximately 15% of the city sales and use tax paid on solar installation materials and permits. To be eligible, applicants must file a rebate application within 12 months of the city’s final inspection of the solar system.

These Boulder-specific programs are available only to residents and nonprofits within the City of Boulder’s jurisdiction. They can be stacked with Colorado’s statewide property tax exemption and sales tax exemption for additional savings. Income documentation will be required to verify eligibility for the grant program.

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 is separate from Colorado’s statewide 2.9% sales tax exemption and applies specifically to Boulder’s local sales and use tax.

To be eligible, you must be a taxpayer who paid Boulder city sales and use tax on a qualifying solar installation. You must file a rebate application within 12 months of the city’s final inspection of your solar system. Applications submitted after this deadline will not be accepted.

This rebate is available to all Boulder solar customers — not just income-qualified households — making it a broadly accessible benefit. When combined with the statewide sales tax exemption and the Boulder Solar Grant (for income-qualified applicants), Boulder residents have access to a strong suite of local incentives to reduce the cost of going solar.

The Solarize Summit program, administered by the High Country Conservation Center, offers Summit County residents a one-time rebate of $1,650 for installing a new solar panel system. The program is available to residents of Breckenridge, Frisco, Silverthorne, and unincorporated Summit County.

In addition to the cash rebate, participants who use one of the program’s officially approved installers receive an additional 5% discount on the cost of their solar panels. Using a program-approved installer also ensures quality standards are met and simplifies the rebate process.

This local rebate can be combined with Colorado’s statewide solar property tax exemption and sales tax exemption, as well as the state battery storage tax credit if you add a battery. Summit County residents should contact the High Country Conservation Center directly to confirm current program availability, approved installers, and application requirements.

EnergySmart Colorado is a nonprofit organization that partners with local governments, utility companies, and community organizations to offer solar rebates to homeowners in select Colorado regions. Rebate amounts range from $400 to $3,000 depending on your location and the specifics of your solar installation. The program is not statewide — it operates through regional sub-programs in areas including Boulder, Eagle, Gunnison, Lake, Pueblo, and surrounding counties.

The program is designed to make solar more accessible by reducing upfront costs and connecting homeowners with vetted local installers. EnergySmart advisors can also help you identify and stack other available incentives, such as utility rebates and state tax exemptions, to maximize your total savings.

Because funding and availability vary by region and change over time, homeowners should visit the EnergySmart Colorado website or contact them directly to find out what rebates are currently available in their specific area. The program is a valuable resource for Coloradans who may not be served by major investor-owned utilities like Xcel Energy.

La Plata Electric Association (LPEA), a rural electric cooperative serving southwestern Colorado, launched a battery storage rebate program in January 2025. Members who purchase a qualifying energy storage system (ESS) from one of seven approved brands can receive a rebate based on the system’s storage capacity. For systems with a capacity between 10 and 19.9 kWh, the rebate is $1,000, with a maximum rebate of $3,000 available for larger systems.

Customers living in designated areas may also be eligible for an additional $500 bonus on top of the standard rebate amount. The program is designed to encourage battery storage adoption among LPEA members, particularly when paired with rooftop solar systems.

LPEA members should contact the cooperative directly to confirm the current list of approved battery brands, rebate tiers for different capacity ranges, designated area eligibility, and application procedures. Funding is limited and available on a first-come, first-served basis.

Tesla is offering a limited-time manufacturer rebate of $500 per Powerwall 3 unit installed, with a maximum rebate of $1,000 per address (covering up to 2 units). Both the Powerwall 3 and Powerwall 3 Expansion Units are eligible for this rebate. This offer is available to Colorado homeowners as part of a broader national promotion.

To qualify, homeowners must register for the rebate by March 31, 2026, and complete the installation by September 30, 2026. Missing either deadline will disqualify the system from receiving the rebate, so it is important to plan your installation timeline accordingly.

This Tesla manufacturer rebate can be stacked with other Colorado incentives, including the Xcel Energy Renewable Battery Connect Program (for Xcel customers), the Colorado state 10% battery storage tax credit, and any applicable utility rebates. Combining these incentives can significantly reduce the net cost of a Powerwall 3 installation.

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. Homeowners can borrow up to $75,000 with no down payment required, a fixed monthly payment, and no prepayment penalty.

Loan terms extend up to 20 years, and interest rates are set below market rates, making this one of the most affordable solar financing options available in Colorado. The program is supported by the Colorado Clean Energy Fund, a nonprofit organization with ties to the state government, ensuring its mission is focused on expanding clean energy access rather than profit.

The RENU Loan is available to Colorado homeowners who own their home and is designed to work alongside other incentives. For example, you could use the RENU Loan to finance your solar system while still claiming the Colorado property tax exemption, sales tax exemption, and any applicable utility rebates — reducing both your upfront costs and your long-term financing burden.

The Colorado Solar for All (COS4A) program was funded through a $156 million award from the U.S. Environmental Protection Agency (EPA) under the Solar for All competition, established by the federal Inflation Reduction Act of 2022. The Colorado Energy Office administers the program, which is designed to expand rooftop solar adoption among low-income, underserved, and environmental justice communities across the state.

The program works with competitively selected industry partners to deliver, install, operate, and manage solar assets for eligible households. The goal is to reduce energy costs and improve energy resilience for Coloradans who have historically had limited access to solar energy benefits.

Note: The Colorado Solar for All Single Family 100% Subsidy Program (SF100) is currently on hold as of 2026. Interested households should monitor the Colorado Energy Office website for updates on program availability, eligibility requirements, and how to apply when the program resumes accepting applications.