Your 2019 guide to getting solar panels for your home in Colorado
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Colorado home. Since there's a lot to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!
** What's new for 2019 **
It's 2019, and the state of home solar in Colorado is strong! The General Assembly passed a bill last year that extends a limit on the fees that can be assessed on new solar installations, keeping the cost of going solar low for homeowners. Way to go, lawmakers!
We've got a brand new page all about the specifics of going solar in Denver and the surrounding areas. If you live in the area and are served by either Xcel Energy or United Power, check it out. Speaking of Xcel, they've got a nice program called Solar*Rewards, which earns you a little extra money for every kilowatt-hour of electricity your panels generate.
Rebates are still available for residents of Boulder and Colorado Springs, too. All in all, Colorado is a great place to go solar, and we know expert local installers. If you're ready to see how much you can save with solar on your roof, click over and get quotes from our partners.
What you'll find on this page
The Solar Strategy section is focused on the 3 ways of paying for solar in Colorado, so you can decide which is best for you. We've created a tool that asks you a few questions and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we provide detailed analysis of how each works.
The Policy Information section contains all our latest research on the rules set by lawmakers and the Public Utilities Commission, which determine how easy it is to go solar in Colorado. These policies and rules govern everything from clean energy mandates to interconnection, and have a huge effect on the viability of solar.
Finally, the Solar Incentives section includes information about money-back rebates and grants, tax credits, and tax exemptions for going solar in Colorado.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your Colorado Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Colorado|
|Solar Loans in Colorado|
|Solar PPAs in Colorado|
|Solar Purchase Payback Time in Colorado|
|Colorado Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
How to get solar panels in Colorado
Figuring out the best way to go solar in Colorado can be a little daunting. First you have to find if your home is right for solar, then you've got to figure out the best way to pay and how much you'll save.
To help with that last part, we've created the handy decision tool below. Answer a few simple questions about you and your home, and we'll recommend the best option.
After discovering your best way to pay for solar, look below to see how much you might save with solar panels.
Payback estimates for solar panels in Colorado
The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan or lease. As you can see, the purchase option leads to the highest dollar-amount returns over time, but it also requires a big up-front investment. If you take a solar loan or home equity line of credit (HELOC), though, your payments over 15 years will be only a little more than your savings, and you'll still come out tens of thousands ahead in the end.
The option with the smallest savings is for a solar lease or PPA, which means you put $0 down on a rooftop solar system and pay monthly while you accumulate electricity bill savings over time. Leases and PPAs are an excellent option if you don't have any equity or cash to put down.
Read on to find out more about each option.
Keep in mind, the numbers above are based on an average home in Colorado. If you're ready for a custom quote for home solar panels, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Colorado Solar Policy Information
Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.
State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Georgia—are doing so poorly.
Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in Colorado:
Colorado's Renewable Portfolio Standard
30% by 2020
Colorado was the first state to pass a Renewable Energy Portfolio Standard (RPS), and they continue to have one of the best such standards with their laudable goal of 30% renewable energy by 2020.
Colorado also mandates that by 2020 at least 3% of retail sales must come from distributed generation (“DG”), i.e. , not from giant, environmentally destructive power plants. Even better, at least half of that DG energy must come from local sources.
A strong state RPS is a critical part of the total solar package. By setting a high RPS like 30%, Colorado is not only setting a strong policy standard for other states to follow, they’re also setting high targets for the utility companies to meet. It is, after all, the utilities that sell the electricity to all you Coloradans; a great deal of the burden of meeting the RPS standards falls on them.
What does all this mean for you? It means that you want to make the switch to solar now, while you are being offered all this free money! The utility companies don’t want to just give you cash. They need customers to switch to renewable energy sources to help them meet those state-mandated renewable, distributed generation, and locally produced energy goals.
You can be certain that once the utility companies have met their share of those goals, they will stop supplementing your solar installation costs. That’s why Xcel, for instance, is only accepting a limited number of program entrants for its solar performance payments (more about this later). You know you want all that free money to help you save your wallet (and the environment)!
Colorado's RPS solar carve out
3% by 2020
While it isn’t explicitly a solar carve out, Colorado does require that at least 3% of the electricity sold by the state’s Investor-Owned Utilities come from distributed energy resources. That’s a fancy way of saying that they need lots of homeowners to serve electricity to the grid, and we think the best way is through generation of clean, reliable solar power!
Colorado Electricity Prices
Colorado homeowners pay about 12 cents per kilowatt-hour(kWh) of energy, just about even with the national average. So power these days isn’t prohibitively expensive; in fact it’s cheap enough that you may wonder why we are making all this fuss about solar power paying for itself in your electricity savings.
But think about why energy is currently so cheap. Ding ding ding! It comes from fossil fuels, which have been abundant and free-flowing for decades. Thing is, no matter whether you love burning coal or you love hugging trees, we can all look at the trend for energy prices and see that they will continue to go up, year after year, for the foreseeable future.
If electricity were simply to increase at a rate of 3.5% for the next 20 years, we’ll be looking at a doubling of electricity charges from the utility. Your power bill for 1200 kWh of usage will now total an average $236 a month for what used to cost $100/month.
Don’t think it can happen? Think again. A 3.5% increase is a conservative estimate for the mountain region. There was a 4.5% increase from 2013 to 2014 alone.
But as we said above, every home and everyone’s energy usage is different. The best way to see if solar is right for you is to connect with one of our installers on the ground. They’ll give you a free quote. Free is good. Costs you nothing but time, and if solar is right for you, well, you’re Golden- as in Colorado.
Colorado Net Metering
Net metering is one of the keys to successful solar policy, and Colorado may just have the best net metering laws in the country. In short, net metering makes sure that you get credit, either in energy or in cash, for every bit of energy you produce. Your utility will track how much solar power you produce and how much you use, and the utility will ‘store” any extra power your solar system produces. At night or on cloudy days, the utility credits your surplus power back to you.
In addition, Colorado requires utilities to pay you for the net excess energy that your system produces over the course of a year. So if you’re smart about your energy usage, your solar panel can actually turn a profit! The utility company will literally cut you a check at the end of the year for any extra solar juice you’ve contributed to the grid. Colorado makes taking advantage of those savings even easier, allowing you to opt either for the check or to simply roll your extra credit to any subsequent monthly bills. Have we mentioned how we like our renewable energy laws? You rock, Colorado.
Colorado Interconnection Rules
Statewide with caveats
Interconnection refers to the rules and restrictions that govern how solar power systems are connected to the utility company’s lines. Colorado does a good job here, following federal recommendations, but they could improve by eliminating solar farm size restrictions and requirements to get additional insurance for solar installations.
Solar Incentives in Colorado
Next to high electricity prices and net metering, solar incentives have traditionally been the most important factor for whether home solar power makes financial sense in a state. In the past, some states with otherwise lousy policy had tremendous incentives that drove down the up-front cost of going solar so much that homeowners could save oodles of money even without net metering or a good RPS.
These days, the big incentive most people can get is the Federal Solar Tax Credit that earns you 30% of your total system costs back after just 1 year. State incentives play less of a role than in the past, but some really good ones are still out there, ready to help homeowners go solar and save money before you know it.
Let's see how Colorado measures up:
The availability of state solar incentives for residential solar systems was sourced from the Database of State Incentives for Renewables and Efficiency, utility company websites, and the state public utility commission.
Colorado Solar Power Rebates
Varies by utility
The real vein of Rockies gold for solar comes from Colorado’s utility companies. They have to meet the state’s RPS guidelines, so they’re willing to help you put solar on your roof, just for joining the world of electricity generation. Truth be told, though, the big, fat rebates of years past are all but gone in the Rocky Mountain State. The good news is prices for solar have dropped by about the same amount of the erstwhile rebate money! The rebates worked!
Here’s a guide to some of the utility-based programs out there right now:
|Utility Company||Rebate amount||Notes|
|Colorado Springs Utilities||$.25/watt||Subject to equipment warranty requirements.|
|City of Boulder||$500||Must be installed by a NABCEP-certified installer|
|Eagle County||$500||Must be installed by a NABCEP-certified installer|
|Holy Cross Energy||$400-$750/kW, based on size||Initial rebate of $750/kW for the first 6 kW of solar, $500/kW for the second 6kW, and $200 for the final 13kW, up to 25kW max. Max of $10,100.|
|La Plata Electric Association||$16/kW (up-front payment of REC purchases)||Incentive switches to performance payments for systems larger than 10kW|
|Lake County||$400||Must be installed by a NABCEP-certified installer|
|Poudre Valley REA||$1/watt||Maximum incentive of $3,000 per customer|
|Roaring Fork Valley||$.75/watt||Up to $2,250|
|San Miguel Power Association||$.50/watt||Maximum incentive of $1,500|
A few Colorado towns offer solar incentives. For example, the cities of Aurora and Lakewood will refund 100% of the solar installation permit fee. Yes, it is the city charging the permit fee in the first place, but a refund is a refund!
Colorado Solar Tax Credits
This is where Colorado is missing the mark on solar policy. A solar power tax credit has proven to be a great help to citizens of forward-looking states. But don’t get too down; the US government still offers a sweet, sweet 30% federal tax credit.
Colorado Solar Performance Payments
Only one Colorado power company will actually pay you in cash based on energy produced: Xcel Energy. Yes we said Xcel. That means that if you’re one of the millions of people in Denver, Boulder, Littleton, or any other Xcel-served city, in addition to helping fund your installation costs, your utility company will literally pay you cash for every kilowatt-hour of solar energy you produce!
Just be sure not to miss out on the opportunity, Xcel will stop offering these incentives after residential-scale solar production goals have been met, and most of the available program space has already been claimed. If you can get in to the program in 2018, you'll receive $.005 per kWh your system produces. In Colorado, a 5kW system will churn out roughly 7000kWh annually, so that's about an extra $35 in your pocket. Not much, but every little bit helps.
If you want a bigger payout and have land with the space to install a minimum 25-kW solar installation (about 100 panels, or 18,000 sqaure feet, Xcel offers a souped-up program that pays $.0425/kWh, which can put an extra $1,600 on your bottom line each year. Now that's a good deal.
Property Tax Exemption
A solar installation adds value to the home it’s installed on. Like, we’re talking thousands of dollars, here. The good news in Colorado is that homeowners who go solar will not pay a single, solitary, Denver-minted penny in taxes on that value. Thanks, Colorado!
Sales Tax Exemption
When you install a residential solar system in Colorado you are exempt from 100% of related sales and use taxes. Now that’s how we like our renewable energy laws: simple, smart, and saving you money.
Other Important Solar News and Programs Available in Colorado
Colorado has (technically) a low-income solar program, funded in part through the federal Weatherization Assistance Program (WAP), and in part by what is sadly an empty account previously funded by Xcel Energy. It's espeically sad because, while the Xcel funding was in place, the program was quite successful, helping 300 Colorado families install solar on their homes for free.
Read more about what Colorado did to offer affordable solar to its citizens. And if you live here, go out there and advocate for more sensible solar programs to increase access for the Coloradans who could stand to benefit most.
Colorado home solar is absolutely great! An average-sized system here pays its cost back in just 9 years, meaning you can count on up to 16 years of free electricity while your panels remain under their 25-year warranties. You might have trouble finding an installer in rural areas, but anyone east of the Rockies should have an easy time getting solar on their roof and saving money.