Colorado Solar Incentives: Tax Breaks, Rebates, Net Metering and More

Adding a solar panel system to your home can bump down your energy bill. It can yield even greater savings if you make the most of the tax incentives, rebates and favorable financing programs available to you.

Coloradans can bring down solar panels' significant cost by thousands of dollars thanks to the federal tax credit. But the savings opportunities don't stop there. A wide variety of statewide and local incentives can chip some more off the price.

Policies change from time to time. Be sure to confirm incentives still exist and haven't changed since this writing and, if you don't see your town or utility on this list, double check for yourself to make sure it hasn't added an incentive you could claim.

Comparing Colorado incentives for solar panels

Colorado state solar tax exemptions and loan programs

Here are some programs in the state that can help you save on the costs of installing a home solar panel system.

Solar sales tax exemptions 

Colorado doesn't collect sales tax on purchases on solar energy and storage equipment. This includes not only solar panels and systems, but system components and supporting structures and racks.

Colorado Residential Energy Upgrade (RENU) Loan Program

This special loan program is a partnership between the Colorado Clean Energy Fund and Colorado credit unions. Eligible homeowners can borrow up to $75,000 for their home solar, battery storage or water heating systems. There's no down payment; low, fixed interest rates and a 20-year loan term.

Local solar panel incentives in Colorado

Here's a look at some of the local solar and energy efficiency rebates available in Colorado.

Energy Smart Colorado rebates

Energy Smart Colorado is a nonprofit that has teamed up with 10 community partners to make home energy efficiency affordable in 18 counties in the state. This includes home energy assessments, special financing programs and rebates for heat pumps, heat pump water heaters, electric appliances and weatherization projects. Homeowners can receive rebates worth up to 25% or $300 off of some projects. If you live in a manufactured home, you may qualify for larger rebates.

The Energy Smart programs are administered by these local partners.

• Boulder County Energy Smart
• Cloud City Conservation Center (Lake County)
• Chaffee County
• The Community Office for Resource Efficiency (Roaring Fork Valley, including Pitkin and Eagle Counties)
• Walking Mountains Sustainability (Eagle County)
• Four Corners Office for Resource Efficiency (Archuleta, Dolores, La Plata, Montezuma and San Juan counties)
• Clean Energy Economy for the Region (Garfield County)
• High Country Conservation Center (Summit County)
• Gunnison Valley Regional Housing Authority (Gunnison County)
• Yampa Valley Sustainability Council (Routt and Moffat counties)

ReEnergize Eagle County

Walking Mountains Sustainability says information on its 2024 solar incentives is forthcoming but has available information on energy efficiency rebates worth up to $1,000.

High Country Conservation Center Rebate

You can get up to 100% or $1,500 on your solar panel or solar thermal installation and up to $4,000 when bundled with other efficiency updates, depending on your income.

Cloud City Conservation Center Energy Improvement Rebates (Lake County)

You might be able to receive a rebate of 50% of the total cost of a home energy assessment, up to $300 per household. 

ReEnergize Garfield County 

This helps low and moderate-income households in Garfield County receive free home energy improvements and financial assistance to be more energy efficient. The programs website says that lower income households "typically receive 100% of the cost of recommended measures," while moderate-income households can receive a rebate of $2,000 to $4,000.

Residential CORE Rebates (Roaring Fork Valley)

Those who live in the Roaring Fork Valley, which includes Pitkin and Eagle counties, can scoop up rebates for a host of energy efficiency improvements. Rebates can total $7,500 or $15,000, depending on income.

Utility rebates for solar equipment in Colorado

A few utilities offer rebates for solar equipment in the Centennial State.

Holy Cross Energy renewable energy incentives

Customers of Holy Cross Energy may be eligible for rebates on their solar system: $250 per kilowatt for the first six kilowatts, then $100 per kilowatt up to 25 kilowatts. You can also get a rebate for your battery: $250 per kilowatt or $500 per kilowatt (up to 25 kilowatts) depending on how much you allow Holy Cross Energy to control your battery's charge.

Incentives are first come, first served.

San Miguel Power Association battery systems rebate

San Miguel Power Association customers can get a rebate on their battery systems. The rebate is for $750 for battery systems of 6 kWh or larger.

Federal solar tax credits for Colorado residents

There are two federal tax credits you can use to go solar or improve your home's energy efficiency.

Residential clean energy credit

You can claim a federal income tax credit of 30% of the cost of a solar panel and home battery installation.

Energy efficient home improvement credit 

The federal energy efficient home improvement credit lets you claim income tax credits for energy efficiency upgrades at home: up to a $3,200 credit each year through 2032. The credit is segmented by technologies (up to $2,000 each year for heat pumps and $1,200 a year for other technology), and you can't roll the credit forward, so plan accordingly.

Colorado net metering rules for solar energy

Under Colorado law, net metering works differently based on the type of utility you have. You should be credited at the retail rate for up to a certain point. For investor owned utilities, that should be at least 120% of your usage. For municipal utilities or co-ops, the cap is set at 10 kilowatts of solar capacity. Above that, you may be credited at a different rate. Excess credits each month will roll over to the next.

Specifics vary by utility, so be sure to understand the requirements of yours before moving ahead.

Community solar projects in Colorado

If you aren't in a financial place to buy or lease a home solar system, you can reap the benefits of renewable energy through community solar projects in the state.

Empire Electric Association solar gardens

The electric co-op Empire Electric Association operates two community solar programs. People can lease a portion of the larger array for energy bill credits. One of the programs is designated for those who meet income eligibility criteria.

Xcel Energy Solar Rewards Community program 

Instead of installing a home solar system, homeowners who are Xcel Energy customers can subscribe to a local, third-party solar garden and purchase electricity through the program. By subscribing, you'll get a Solar Community credit on your monthly bill. 

Solar co-ops 

Solar co-ops, which are groups of people who pool their funds together to boost their buying power to get solar. Solar co-ops are member-driven, and it's free to join. 

Members receive bids to install solar in their home from an installer that was handpicked by the group. Once you receive a bid, you can decide to move forward. 

Solar United Neighbors is seeking members in its solar co-op for Routt and Steamboat Springs counties. Membership is open to homeowners and business owners through April 15, 2024.