Colorado Solar
Incentives & Rebates

Updated March 7, 2021

Colorado Renewable Portfolio Standards

Colorado has good forward-thinking Renewable Portfolio Standards (RPS). The standards mandated that Colorado generate 30% of all its energy from renewable sources by 2020. Utilities faced high fees if the standards are not met, so there is strong incentive in Colorado for utilities to offer solar incentives.

Colorado Solar Carve-Out

A carve-out is that portion of a state’s renewable energy that must come specifically from solar. In Colorado the carve-out was 3% by 2020.

Colorado Electric Rates

As electric bills across the country go, Colorado is in the middle, ranking 25th for highest bills. Electric rates in Colorado put the state at ninth highest in the country. An investment in solar energy is more financially rewarding in states with high electric bills.

Colorado Net Metering

Clear and strong net metering laws are a real asset in Colorado. Net metering is a plan in which solar panels or other renewable energy generators are connected to the grid, allowing customers to offset the cost of the power they draw from the utility with credits they earn on their own production. If your solar system produces more power than you need, the excess is sold to the grid, which you see as a credit on your electric bill.

Colorado Interconnection Standards

Interconnection standards are rules for connecting solar and other electrical generation systems to the grid. They make installation easier and usually less expensive, and net metering is more reliable too. Standards in Colorado are strong and statewide.

Colorado Solar Power Rebates

The state’s rebate program lets you take the rebate in a lump sum payment, or your installer can take it off his bill. One advantage to the latter method is that usually the installer will handle the paperwork. You can claim the credit for your primary residence, your vacation home, and for either an existing structure or new construction.

Colorado Performance-Based Incentives (PBI)

Colorado is one of many states that offer PBIs, incentives based on the actual, metered power that your system generates. Colorado calls them Solar Power Performance Payments. Payments are based on kilowatt-hours (kWh) or BTUs generated by your system, as measured by the meter. The electricity produced is credited as Solar Renewable Energy Credits (SRECs), the value of which fluctuates by the rule of supply and demand. SRECs are a good way to help your system pay for itself.

Colorado Property Tax Exemption

Keep paying your previous property tax after you install a home solar system. Homeowners in Colorado enjoy a property tax exemption. The value of their home will not be reassessed.

Colorado Sales Tax Exemption

Pay no sales tax in Colorado on the purchase and installation of a solar energy system.

Don’t Forget the Federal Tax Credit, Colorado!

On top of these great Colorado rebates and exemptions, you also qualify for the sizable tax credit from the Federal government. The Investment Tax Credit (ITC) is worth 26 percent of the system cost, and will be deducted from your Federal income tax. The credit goes to those who buy their system (cash or loan), not to those who lease. If you lease a system, incentives go to the third-party owner. That’s a great reason to buy, not lease!


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