Colorado Solar Incentives, Tax Credits & Rebates 2024

Solar Power Systems
14 min readJan 9, 2024

As the sun-drenched state of Colorado continues its audacious march toward a sustainable future, the spotlight shines resolutely on solar energy as an indispensable combatant against the pressing environmental concerns of our era. In an electrifying fusion of policy and innovation, Colorado’s solar incentives, tax credits, and rebates emerge as pivotal cogs in a grand green machine, powering homes and fueling ambitions with renewably-sourced luminescence. Within the cradle of the Rocky Mountains, where the sun’s fiery kiss graces the land with over 300 days of solar potential, the year 2024 unfurls an arsenal of financial encouragement designed to turn mere rooftops into bastions of clean energy generation. These incentives are a testament to Colorado’s unwavering commitment to weave the golden threads of solar power into the very fabric of its energy tapestry. Legislatory masterstrokes grant Coloradans not just the privilege but the tangible means to mitigate their carbon footprint, reduce dependence on nonrenewable energy sources, and embrace the economic windfalls of going solar. Harnessing the radiant vigor of our celestial benefactor, this article takes you through the nexus of Colorado’s solar incentives, illustrating how they animate the state’s renewable aspirations while cushioning the wallets of eco-conscious denizens.

Get Solar Quote in Colorado

Navigating the solar conversion process in the high-altitude terrain of Colorado can be as complex as the state’s varied climate zones — from the snow-dusted peaks to the arid plains. In the Centennial State, where solar energy potential is as abundant as its 300 days of sunshine a year, getting a personalized solar quote is a crucial step. To obtain this tailored financial compass, Colorado residents should first understand their energy consumption patterns and have a clear grasp of their roof’s solar capacity, which can be influenced by factors such as angle, shading, and local weather conditions. Then, it’s essential to pore over Colorado’s unique legislation, such as Net Metering policies and the Renewable Energy Standard, which can affect returns on investment.

Solar Power Systems, making a quantum leap in streamlining this process, has conducted exhaustive research on solar installers across Colorado. This data-driven approach takes into account installer certification, performance data, customer reviews, and local expertise to match homeowners with reputable providers. When fetching a solar quote, our platform encourages potential adopters to exploit our comprehensive analysis, intertwining state-specific incentives like the Colorado Energy Office’s programs and Xcel Energy’s Solar*Rewards with bespoke installer quotes. This potent amalgamation ensures that each personalized quote not only reflects the financial outlay but also embodies the nuanced forecast of long-term gains and sustainability triumphs emblematic of Colorado’s renewable trajectory.

Types of Solar Incentives in Colorado

In the high-altitude adventureland of Colorado, solar incentives gleam as brightly as the sun-drenched peaks. The Centennial State propels its residents toward a renewable future with a mosaic of financial stimulants. At the forefront is the radiant beacon of the federal Solar Investment Tax Credit (ITC), which lavishes taxpaying solar adopters with a substantial 26% deduction on their system costs, though set to taper off to 22% in 2023 before a scheduled sunset for residential systems in 2024. Strikingly, Colorado goes several steps further, unfurling its own state-level tax incentives, including exemption from property tax increases due to solar system installation and a sales tax exemption that erases the additional tax burden off the upfront costs.

Local utility companies, as if joining a harmonious chorus of support, pitch in with rebates for solar customers. For example, EnergySmart Colorado offers rebates to residents in select counties, while the Renewable Energy Rebate Program is a financial fillip to those served by Fort Collins Utilities. Navigating these incentives becomes a masterful art in the high-altitude economic ecosystem of solar adoption. Moreover, specific municipalities have been known to extend grants and further incentives, underscoring Colorado’s commitment to becoming a solar stronghold, inviting homeowners and businesses alike to not only indulge in the state’s natural beauty but to also champion its environmental ethos. Each incentive, like a solar panel absorbing photons, captures the essence of Colorado’s clean energy domination saga.

Overview of Solar Energy Landscape in Colorado

As the sun-drenched landscape of Colorado basks in over 300 days of sunshine annually, it’s no mystery that the Centennial State flourishes as a prime crucible for solar energy production. This alpine domain, characterized by its sprawling plains, arid deserts, and towering mountain ranges, is naturally predisposed to harnessing the prolific power of the sun, substantiated by its ranking among the top states with the highest solar irradiance levels. Colorado’s commitment to a sustainable future is further emboldened by legal stipulations such as community solar gardens, legislated by the Colorado Community Solar Gardens Act, which democratize solar energy generation, enabling households that might be shaded or unfit for rooftop panels to buy into local solar projects.

Moreover, Colorado’s Renewable Energy Standard (RES) mandates investor-owned utilities to derive 30% of their power from renewable sources by 2020, with a notable portion attributed to solar energy. This legislative architecture propels Colorado towards a greener horizon, bearing fruitful incentives for residential and commercial entities to transition to solar. Scalable solar solutions are palpably on the rise, with utility-scale installations and distributed solar arrays painting the state with photovoltaic splendor, mirroring Colorado’s potential to metamorphose into a beacon of solar innovation. Such regulatory frameworks and climatic assets, underpinned by vigorous tax rebates and incentives like the Renewable Energy Equipment Sales and Use Tax Exemption, elevate Colorado’s status as a vanguard in the nation’s colossal shift toward solar energy utilization.

Benefits of Solar Panels in Colorado

Plunging into the eco-centric mosaic of Colorado’s energy tableau, solar panels emerge as a quintessential keystone in the state’s environmental renaissance. They not only carve a pathway through the carbon-drenched atmosphere, but they also beckon an era of green energy suffused with profound economic benefits for homeowners and communities alike. With Colorado’s laws ardently supportive of renewable energy initiatives, homeowners are incentivized through tax breaks and rebates, fostering a symbiotic relationship between personal finance and planetary health.

As a playground for the sun, with over 300 days of solar caresses annually, Colorado’s climate is a goldmine for solar energy utilization, proving that the state’s natural aesthetic is matched by its potential energy savings. Harnessing this celestial bounty, homeowners can witness a precipitous decline in their electrical bills, as solar installations feed not just their homes but the grid at large, leading to a lucrative surge of net metering credits — a win for both wallets and the community’s economic vitality.

Moreover, the environmental dividends are immeasurable; solar panels vigorously slash greenhouse gas emissions, laying the groundwork for a cleaner Colorado. They silently combat air pollution and mitigate the impact of fossil fuel dependency in a state where majestic landscapes and robust wildlife are invaluable assets. Such a shift towards photovoltaic energy cultivates a legacy of sustainability, ensuring that Colorado’s scenic vistas remain unmarred and resplendent for generations to come, all while stimulating local job creation in the flourishing solar sector.

Federal Solar Tax Credit (ITC)

Navigating the financial landscape for solar investments in Colorado becomes significantly more favorable when accounting for the Federal Solar Tax Credit (ITC), a pivotal incentive for homeowners and businesses opting to transition to clean energy. The ITC, which serves as an outright reduction in the tax bill of those who install solar panels, is a prime catalyst in Colorado’s burgeoning solar market. For 2024, Colorado residents can harness the sun’s power and receive a generous 30% credit on their federal taxes for solar photovoltaic (PV) systems installed on residential and commercial properties, a considerable uptick from the previous 26% before recent legislation reinvigorated the solar incentive framework. It’s a financially savvy move, reinforced by Colorado’s specific regulatory environment which promotes renewable energy use. The ITC’s applicability in Colorado is especially potent given the state’s 300 days of annual sunshine, providing abundant solar resources to be captured by PV systems. This beckoning solar tax credit, when combined with Colorado’s net metering policies and local rebates, paints a compelling picture for those considering solar: the upfront costs are markedly slashed, thus accelerating the return on investment. Yet, Coloradans should also heed that the ITC is a nonrefundable credit — it’s pivotal to have sufficient tax liability to reap the full benefits, or else the excess credit rolls over to the following tax year, adhering to specific provisions that dictate the carryover nature of the incentive.

Net Metering and Solar Renewable Energy Certificates (SRECs)

Pivoting to the dynamic landscape of Colorado’s solar policies, the state’s stance on net metering truly propels residents into a vortex of monetary and environmental benefit. Colorado’s net metering policy allows solar panel owners to become virtuosos of their own energy destiny. When panels produce more electricity than the home uses, excess kilowatts pirouette back to the grid, and utilities must credit the account, essentially rolling back the customer’s electric meter. This solar carousel not only reduces the monthly electricity bill but potentially earns additional credits for surplus power in sun-drenched months, a financial tango with the sun that’s both lucrative and eco-progressive.

Amplifying the appeal is Colorado’s embrace of Solar Renewable Energy Certificates (SRECs). Each SREC represents the clean energy cachet of one megawatt-hour of solar electricity. Owners of solar arrays can harvest these green badges of honor and then parade them in the SREC market, where utilities, mandated by Colorado’s Renewable Energy Standard to showcase a portfolio of renewable sources, vie to purchase these certificates. Herein lies a secondary income stream for solar investors, a tangible asset proving that environmental responsibility and financial acumen can dance hand in hand beneath the Coloradan skies. Consequently, these policies collectively create a magnetic field for solar adoption, transforming the state into a beacon for renewable energy enthusiasts and pragmatists alike.

State Solar Tax Credits and Rebates

In the quest for renewable energy domination, Colorado emerges as a solar sanctum with its generous solar tax credits and rebates. The Centennial State, abreast with its penchant for environmental stewardship, showers residents with financial incentives to harness the sun’s power. The state’s Renewable Energy Standard (RES) fuels the residential solar market, offering a robust 26% Federal Investment Tax Credit (ITC) for solar PV systems through 2022, which is set to decrease to 22% in 2023 before stepping down to zero for residential installations in 2024, making the dash for solar installations more of a sprint than a leisurely jog.

The most lucrative state-specific lagniappe comes in the form of the Colorado Energy Office’s residential and commercial PV incentives. This takes a twofold approach: first, via the Sales and Use Tax Exemption for Renewable Energy Equipment, it eradicates the state sales tax on solar installations, and second, through the Property Tax Exemption for residential renewable energy equipment, it ensures that the added home value from solar arrays doesn’t hike up property taxes.

Additionally, Colorado’s Climate bolsters utility companies to dangle carrots before consumers, with rebate programs such as the Xcel Energy’s Solar*Rewards Program, which compels one to seize payments for solar energy production. The program operates on a first-come, first-served basis, featuring a declination structure of incentives encouraging swift adoption. With Denver’s 300 days of sun and Boulder’s green energy craze, Colorado’s solar terrain is not merely fertile but flourishing, making it a prime candidate for residents aiming to pivot to a more sustainable and financially savvy energy source.

Financing Options and Solar Loans

In the sun-kissed state of Colorado, residents have a mosaic of financing options to harness solar power for greener energy consumption. The Colorado Energy Office has taken strides with the CHFA Renewable Energy Loan program, offering residents a remarkable opportunity to finance solar photovoltaic (PV) systems. The program specifically partners with Colorado Housing and Finance Authority (CHFA) to provide advantageous terms: low-interest rates, up to 15-year loan tenures, and potential repayment through energy bill savings. Moreover, the state’s RENU Loan program gushes with potential for homeowners seeking to tap into solar energy without the dampening upfront cost blues.

Additionally, the PACE financing option — Property Assessed Clean Energy — propels property owners to invest in photovoltaic advancements with repayment strategies tied to property tax bills. Also, solar-seekers can engage with private financial institutions which regularly propose solar loans with zestful incentives, ranging from competitive interest rates to zero-down payment options that radiate financial flexibility. With the federal solar tax credit inclining a favorable tilt by allowing homeowners to deduct 26% of the cost of installing a solar energy system from their federal taxes, the financial landscape for solar installations in Colorado shimmers with opportunity. These dynamic programs mirror the state’s commitment to fostering renewable energy, painting a brilliant future for sustainable investment in Colorado.

Additional Incentives and Local Programs

Diving into the incentives that make Colorado a solar sanctuary, beyond the already seductive federal Investment Tax Credit (ITC), this mountain-ringed state presents a mosaic of local incentives ensuring residents can bask in more savings than the high-altitude sun. For instance, take the city of Boulder’s Solar Grant Program, it’s practically an invitation to join the green revolution, offering low-income residents an impressive leap towards energy autonomy with rebates that pare down upfront installation costs. Denver takes a different tack with the Denver Solar Rebates program, showering homeowners, nonprofits, and businesses with incentives that paint a rosy ROI, and when paired with Xcel Energy’s Solar*Rewards program, the financial forecast for solar investments becomes as clear as a Colorado bluebird sky.

Not to be outshone, community solar gardens are sprouting up throughout the state, leveraging collective buying power to drive down costs even further. These innovative models allow residents to own or lease a piece of a large solar array, reaping the benefits without the need to install panels on their own property — ideal for the urban dweller or those with less sun-kissed abodes. And in this high-altitude solar haven, local initiatives like Solarize campaigns frequently emerge, where neighborhoods band together to negotiate group-buying discounts, lowering costs like a seasoned haggler at a bustling mountain town market. Truly, Colorado’s patchwork of local incentives and community-focused solar projects captures the pioneering spirit, turning the state into a beacon of renewable opportunity.

Eligibility Criteria and How to Apply

Harnessing Colorado’s abundant sunshine is like striking gold for solar enthusiasts, and the centennial state’s regulations are fertile ground for homeowners aiming to transition to solar energy. Colorado’s Renewable Energy Standard sets a high bar with ambitious targets, and residents can tap into this solar bounty through a plethora of incentives that ensure the viability of solar investments. Eligibility for these solar incentives hinges on criteria like the installation of Energy Star-rated systems, net metering participation, and adherence to utility-specific requirements, particularly for the Xcel Energy’s Solar*Rewards Program which offers significant rebates for subscribers who add photovoltaic systems to the grid.

Embarking on the solar journey in Colorado begins with assessing your property’s solar potential, followed by connecting with a certified solar installer — a pivotal step, as most incentives require installation by professional, certified entities. Subsequently, homeowners should ensure their solar system complies with local building codes and standards. The next move entails registering for the net metering program through your utility provider, which will allow you to feed excess generated energy back into the grid, helping offset your electricity bills with credits.

Once your system is up and running, applying for rebates is the next course of action. Start by submitting your system’s data to the utility company’s solar incentive program. For federal tax incentives, like the Solar Investment Tax Credit (ITC), you must complete and lodge IRS Form 5695 alongside your annual tax return to recoup a portion of your solar expenses. Staying abreast of legislative changes is crucial as incentives frequently evolve, with state lawmakers often championing solar-friendly policies that can bolster the financial upside of solar panel installation for Colorado’s eco-conscious citizens.

Case Studies or Success Stories

In the sun-drenched state of Colorado, where solar energy shines with opportunity, case studies illuminate the potent combination of state-level incentives and federal tax credits fueling a renewable revolution. Local businesses and residents have harnessed these financial catalysts to significantly curtail the costs of photovoltaic (PV) system installations. One such beacon is the story of a Boulder-based tech firm that seized the Renewable Energy Property Tax Exemption, merging it with the Investment Tax Credit (ITC), effectuating an approximate 26% deduction on their solar investment and obtaining near-instant savings on operation costs. Furthermore, in Denver, the Solar*Rewards Program collaborates with utilities like Xcel Energy, offering a per-kilowatt-hour (kWh) credit for surplus energy channeled back into the grid through net metering — a powerful incentive promoting energy recirculation and community-wide benefits.

Another compelling narrative emerges from Fort Collins, where a local brewery went green, implementing an extensive PV array. Capitalizing on the Business Energy Investment Tax Credit (ITC), accelerated depreciation through Modified Accelerated Cost Recovery System (MACRS), and local utility rebates, this hop haven swiftly offset installation expenses by a considerable margin, parlaying into a sustainability badge that’s amplified its brand equity and customer loyalty. These case studies pluck at the dual chords of environmental responsibility and economic savvy, underscoring how a mosaic of incentives can galvanize a thriving solar energy ecosystem across Colorado’s diverse climatic tapestry.


In the majestic and sun-drenched state of Colorado, the quest for renewable energy has been supercharged in 2024 with an array of solar incentives that have homeowners beaming with excitement. The Centennial State, heralded for its progressive environmental stance, presents an exceptional opportunity for residents to harness its abundant sunshine through free solar panel programs that slice through the financial opacity often associated with clean energy transitions. Current state-specific incentives include generous tax credits, rebates, and the performance-based incentive (PBI) which pays you credits for the electricity your solar system produces. In addition, the Solar*Rewards program for Xcel Energy customers continues to be a shining star among these financial sweeteners. Colorado’s commitment to a greener future is crystallized in its Renewable Energy Standard, which offers additional motivation to switch to solar. When juxtaposed with the Colorado Property Tax Exemption for Residential Renewable Energy Equipment, homeowners are looking at an invitation to reduce their carbon footprint and energy bills in a formidable tandem. These incentives, shaped by local laws and climate considerations, make Colorado a veritable goldmine for solar investment. So, don your proverbial prospector’s hat and explore the rich landscape of solar energy options — the time to act is now, under the expansive blue skies of Colorado!

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