Guide to Solar Panel Incentives and Installers in Colorado

Solar power has grown nationwide, including in Colorado.

According to the Solar Energy Industries Association, Colorado has 2,268 megawatts of solar power capacity, enough to power more than 440,000 homes. That includes large scale installations, but more Colorado residents are turning to solar panels too, saving money on energy bills and lowering household carbon emissions.

According to CNET's sister publication SaveOnEnergy, Colorado residents paid an average electricity bill of $105.39 in October 2022, or approximately $1,264 over a full year. Electricity rates in Colorado increased 10% from August 2021 to August 2022. If energy rates continue to go up, residents could save even more with solar panels.

While traditional energy rates have gone up, the cost of solar panels has decreased substantially. According to SEIA, solar panel costs in Colorado have fallen 52% in the last 10 years. There are also a growing number of tax credits and rebates to help bring down the cost of a solar panel system further. 

Best Solar Companies of 2023 See at Cnet

Average cost of solar panels in Colorado 

Here's a look at the average cash price for a 5-kilowatt system before factoring in tax credits incentives, according to data from FindEnergy.com.

How to pay for solar panels in Colorado  

Solar panels are a big investment. There are several financing options to make the upfront cost of solar more affordable. As with any major purchase, you will want to think about how to finance the cost of solar panels. Keep in mind, the money from the tax credit won't be yours until after you've filed your taxes for the year the panels are installed. It's also important to factor in the solar payback period, which is the time it takes to recoup your upfront investment and when savings begins. 

Here are some ways to pay for solar panels:

Solar loan: Your solar installer likely has a relationship with a bank or other financial institution to offer a loan designed for solar panels. This can be a great deal, but you'll want to get multiple offers to ensure the rates and terms are the best.

Lease or power purchase agreement: Some solar companies allow you to lease your system or enter a power purchase agreement. If you choose to lease, you won't own the solar system, you'll just pay for use of the equipment. Entering a power purchase agreement means you'll buy solar energy generated from the solar company to power your home. The price you'll pay is usually lower than the retail rate from your local utility company. Note that not all incentives are available with a lease or power purchase agreement.

Cash: This approach only works if you happen to have thousands of dollars sitting around in a bank account. If you don't have that yet, but you want solar panels in the future, consider saving money in a high-yield savings account. Interest rates are high right now, and this can help you save faster.

Home equity: You don't have to use a loan from your solar company. Financial institutions offer home equity loans and lines of credit (or HELOCs) that are commonly used for home improvement projects. These loans can be used for basically any purpose, and they may be a good fit for your solar project. Shop around and make sure you're getting the best deal.

Personal loan: You can also borrow the money through a personal loan. The main difference between a personal loan and a home equity loan is that a personal loan is typically unsecured. That means your house isn't at risk. The downside is they tend to have shorter terms and higher interest rates than home equity products. 

Colorado solar panel incentives or rebates

There are several solar tax credits and incentives available at the federal, state and local levels to make solar panels more affordable. Depending on where you live in Colorado, you may qualify for several additional solar incentives.

The residential clean energy credit (formerly called the investment tax credit) is a federal solar incentive offered in every state that credits you 30% of the total cost of your solar system when you file their federal income tax. The rate increased from 26% after the Inflation Reduction Act passed in August 2022. 

There is no cap on the amount you can claim with this credit, so you can receive the full 30% regardless of the size or cost of your system.

To apply for the residential clean energy credit, fill out IRS form 5695 (PDF). The IRS provides detailed instructions on how to fill out the form properly. Once your application is approved, you will receive your credit when you file your federal tax return.

There are state and local solar credits, rebates and incentives available in Colorado, too. For example, when you add a solar system to a home, typically the property value rises and so do your property taxes. The good news, is Colorado residents benefit from a state-property tax exemption to prevent that. The Database of State Incentives for Renewables and Efficiency offers a comprehensive list of programs. Here are a few you should know.

Colorado solar panel companies

According to the Solar Energy Industries Association, there are 384 solar companies operating throughout Colorado, 149 of them installers. As solar panels continue to grow in popularity, the number of solar companies in Colorado will also likely increase to meet demand.

We've compiled a list of solar panel companies that excel in the industry. Here are a few Colorado solar installers to consider. As with most large projects, it's a good idea to get multiple quotes before making a decision.

ADT Solar

ADT Solar (formerly Sunpro Solar) provides solar and battery installation services in Colorado. ADT Solar provides 25-year labor, power production and manufacturer warranties -- as long as solar warranties come -- and offers a price-match guarantee on installation costs.

Currently, ADT Solar only offers solar panel systems for purchase and does not offer solar leases or power purchase agreements. It partners with top-tier solar manufacturers to provide high quality products from Enphase, Tesla and more.

Blue Raven Solar

Blue Raven Solar operates in 17 states, including Colorado cities such as Colorado Springs, Denver and Fort Collins. It offers a 25-year product warranty and 10-year quality-of-work warranty. Blue Raven Solar also offers a power production guarantee that lasts for two years. Under this guarantee, Blue Raven Solar checks the amount of electricity your solar system produces twice over two years to ensure the production level is close to the amount the installer originally estimated when you signed your contract.

Blue Raven Solar does not currently offer solar leases or power purchase agreements, so customers will need to purchase their solar panel system. However, it stands apart from other competitors in its exclusive solar financing option program, BluePower Plus+. With this program, you won't pay anything upfront and receive solar power at no cost for the first 18 months of your system's life. After 18 months, you can enroll in Blue Raven Solar's SmartStart financing program, which secures a fixed interest rate for the next five years to keep payments affordable.

Palmetto Solar

Palmetto Solar has become one of the largest solar companies in the nation since it was founded in 2010. It offers solar panel systems for purchase, solar leases and power purchase agreements. Most of Palmetto's customers buy their solar panels outright because of the benefits of owning the system.

Palmetto Solar's panels have an efficiency rating above 19.8% and come with a minimum 12-year product and 25-year performance warranties. Palmetto says it is committed to providing the best customer service in the industry. It offers a subscription service called Palmetto Protect, which monitors how a solar panel system is performing. The subscription also provides tiered levels of support in the event the panels are damaged or fail.

Sunrun

Sunrun is currently the largest solar company in the country and stands out in the industry because of its focus on solar leases. For many people, the cost of a solar power system is too high. Signing a solar lease with Sunrun makes solar power accessible to a wider range of households, though solar leases come with their own disadvantages, including lower savings over time and ineligibility for most solar tax incentives.

Sunrun customers who lease their systems will receive "bumper-to-bumper" coverage on system maintenance and monitoring. The installer does offer systems for purchase, although customers will need to rely only on the manufacturer's warranty terms. Sunrun offers a 10-year quality of work warranty, covering roof and installation damage.

Tesla Solar

Tesla offers two solar routes to choose between -- traditional solar panels and the Tesla Solar Roof. The price, warranty terms and specifications will vary between these two options.

The Tesla Solar Roof has a higher price tag than the other solar panel options on this list. Tesla offers a 25-year product warranty and guarantees performance at 95% capacity after five years and 85% after 25 years.

Tesla solar panels, on the other hand, are a more affordable option. Tesla warranties its solar panels at 85% capacity after 25 years. They have an efficiency range between 19.3% and 20.6%.

Installation factors to consider

Before signing a contract with a solar installer, you should consider whether solar panels are the right choice for you and your home. Here are some installation factors to consider:

Is your roof right for solar? The age, shape, size and slope of your roof impacts how efficiently a solar panel system generates energy. The Department of Energy says solar panels will generate the most electricity on roofs with a slope of between 15 and 40 degrees. Older roofs or roofs in need of repairs should be maintained or replaced before solar installation occurs. 

Are solar panels allowed in your neighborhood? In Colorado, homeowners' associations aren't allowed to ban solar panels. However, your homeowners' association or neighborhood may have requirements or approval processes that you should consider before signing a contract.

Can you add solar panels to your insurance policy? Most standard homeowner insurance policies cover rooftop solar panels. However, you should still check with your insurance agency for the specific details of your policy.

Does your home receive enough sun? While solar panels can generate some electricity in indirect sunlight, direct sunlight of at least 4 hours per day is a general rule of thumb for when they make financial sense. In Colorado, many residents receive significant snowfall in the winter. Solar panels are designed to operate in the snow, although they will produce less power if it remains cloudy. If your roof gets consistent shade coverage, a solar panel system may not generate as much power as you'd like. 

Do you rent your home? If you rent your home you may not be allowed to install solar panels. If this is the case, community solar programs are an alternative option. Community solar allows residents to subscribe to solar power produced in another location (usually somewhere nearby) and receive a credit on energy bills. The subscription rates are lower than the value of the credits, meaning you pay less than you would on normal energy bills. 

Colorado solar power FAQs