The 300 annual days of sunshine we receive in the Denver area make solar energy a great choice, but what about Colorado solar incentives? In fact, the great incentives available now make it more attractive than ever to take advantage of the abundant sunshine here in the Centennial State.
By taking advantage of Colorado’s solar incentives with a new solar installation by Sol Vista Roofing, you unlock incredible financial benefits. As we describe below, there are multiple benefits including Colorado’s federal tax credit, tax exemptions, and solar rebate programs. All of these make it easier for you to gain control of your electric bill, protect your property from power outages, and lower your home’s carbon footprint.
Colorado Solar Incentives Currently Available
|Incentive Type||Incentive Description|
|Federal Solar Investment Tax Credit (ITC)||Federal tax credit of 26% of the installed cost of your new solar panel system, available until December 31, 2022
(NOTE: when your roof is replaced at the same time, the 26% savings apply to it as well!)
|Property Tax Exemption for Residential Renewable Energy Equipment||Property tax exemption that removes the value added to your property after installing a new solar panel system|
|Colorado State Sales and Use Tax Exemption for Renewable Energy Equipment||Residential solar system state sales tax exemption of 2.9%|
|Utility (Xcel) Incentives and Rebates||Renewable Energy Credits (REC) of up to $0.0375 per kilowatt hour. Other incentives/rebates available for customers outside of Xcel’s coverage|
Details of Colorado Solar Incentives Programs
- Federal Solar Investment Tax Credit (ITC) – qualify for 26% federal solar tax credits when you purchase a new solar panel installation. For example, a 5-kilowatt (kW) system cost of approximately $14,000 would have a reduced cost of just $10,360 after this incentive!
- Property Tax Exemption for Residential Renewable Energy Equipment – even though your new solar panels add significant value to your home, your property taxes won’t go up thanks to this tax exemption.
- Colorado State Sales and Use Tax Exemption for Renewable Energy Equipment – when a new rooftop solar panel system is installed on your home, you might not pay any state sales tax. That will save you 2.9% of the project cost!
- Utility (Xcel) Incentives and Rebates – for Xcel customers, their Solar Rewards Program will earn you rewards for every kWh of solar energy generated by your system. For customers with a different utility other than Xcel, other benefits may be available.
Is Colorado a Good State For Solar Panels?
Colorado is one of the best states for residential rooftop solar. Not only do we enjoy 300 days of sun per year along the Front Range, but the incentives and rebates available in Colorado are among the best in the entire country. With abundant sunshine and incredible financial benefits, why not get started on your project today to take control of your electric bills?
How Do I Use Colorado Solar Incentives?
Taking advantage of the incredible incentives available in Colorado is simple.
- Federal Solar Investment Tax Credit (ITC) – To use this incredible tax credit, simply file IRS form 5695 with your annual tax return. This will allow you to reduce your tax bill by 26% of your solar project installation expense (through December 31, 2022). You may need to provide your Net Metering Agreement, solar invoice, system schematic, and the installer’s solar license number as well.
- Property Tax Exemption for Residential Renewable Energy Equipment – Your property taxes will not increase due to the value added to your property from the solar panel installation. Consult with your Colorado state tax professional to ensure you are legally maximizing this benefit!
- Colorado State Sales and Use Tax Exemption for Renewable Energy Equipment – Your solar project expense will not be subject to Colorado sales tax. To take advantage of this, you will have to include the installation cost details with your Colorado state tax return, which will lower your tax bill by 2.9% of your solar project cost. Consult with your Colorado state tax professional to ensure you are legally maximizing this benefit!
- Utility (Xcel) Incentives and Rebates – In most cases, our team will file an interconnection application with Xcel. This will connect your Xcel Solar Rewards with your project. In some cases you may manage this application on your own.
For tax incentives, rebates, or exemptions, we highly suggest speaking with a tax professional regarding your solar installation project.
The time has never been better to upgrade to solar energy in Colorado. Did you know solar panel project costs have dropped 50% in the last 10 years? Take advantage of the best pricing we’ve ever seen, along with incredible incentive programs, to upgrade your home to solar today.