Solar Incentives in Colorado

Colorado Solar Incentives

Known for its “300+ sunny days” per year, Colorado is the ideal location for homeowners looking to invest in solar energy. With the latest advancements in solar technology, more affordable solar system prices and attractive new incentives, there’s never been a better time to capitalize on Colorado’s solar potential. We’ve compiled some of the most beneficial solar incentives available to Colorado homeowners below.


Federal Investment Tax Credit (ITC)

The Investment Tax Credit (ITC) is one of the biggest incentives available to Colorado homeowners. The federal government is currently offering a 30% investment tax credit against the total cost of a home solar system.

How it works:

If you buy your solar system outright, you can apply 30% of the total cost of your solar system installation to your tax liability for the year.

For example, if you purchase a solar panel system that’s worth $20,000, you can get a credit of $6,000 on your federal taxes.

Keep in mind, this is not a cash rebate — it’s a tax credit.

But you have to act fast. Starting in 2021, the value of the tax credit will lower to 22%. After 2022, the tax credit for residential solar systems will end.

Local Solar Rebates

In Colorado, some utility companies and other local organizations offer cash rebates to homeowners who install solar systems on their property.

Local rebates available:

  • Energy Smart Colorado: Depending on your home’s location, they offer rebates for solar installations ranging from $400 to $3,000.
  • Holy Cross Energy: To reduce the cost of solar system installations, Holy Cross offers customers a per-kilowatt (kW) rebate of $750 for the first 6 kW. Homeowners with an average 6 kW system can save up to $4,500 on installation costs.
  • Black Hills Energy: As part of their “Ready EV” program, Black Hills Energy is now offering a $500 credit towards electric vehicle chargers for your home or business. See their website for more details.

Speak with one of our solar professionals at 720-370-3344 to learn more about available solar rebates in your area.

Colorado State Sales Tax Exemption

With Colorado’s sales tax exemption, homeowners who install solar energy systems are not taxed on their system components, which can save hundreds of dollars.

How it works:

Residential solar power system components are not taxed in Colorado. The exemption only applies to sales and use taxes imposed by the states, not those imposed by incorporated towns, cities and counties.

Some of the eligible components include:

  • Turbine generators
  • Rotors and blades
  • Solar modules and trackers
  • Supporting structures or racks
  • Inverters
  • Balance of system components
  • …and more

Some of the ineligible components include:

  • Step-transformers at the production site
  • Energy storage
  • Remote monitoring systems

*Note: The sales tax exemption does not include labor.

Net Metering

Net metering is a solar billing incentive that allows homeowners to benefit from every ounce of energy their solar panel system produces. Essentially, if your solar panels generate more power than you use, you’ll be credited by your utility company toward future energy bills.

How it works:

During your solar panel installation process, you can choose to have your existing meter swapped out for a net meter. Net meters run backward when your system produces more energy than your home is using — storing credits for when your home is using more energy than your solar panels are producing.

In return, a net metering policy will credit you for the extra electricity your system produces and allow you to use those credits when your system doesn’t produce enough power. These credits can be carried over month after month.

At Photon Brothers, we know that everyone’s financial situation is different. That’s why our in-house financing team will work with you to find a plan that’s best suited for your unique needs. If you’re ready to see how much you can save by going solar, contact us today.

How Much Can You Save?

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