Solar panel cost and payback period in Denver, Colorado
Updated
For most homeowners, reasons to install a solar system in Denver, Colorado break down into personal priorities. Many people are motivated by environmental concerns. Others are driven by the idea of being more self-reliant. One thing they all have in common, however, is the desire to save money by generating their own power.
Key takeaways
- Denver offers generous incentives to go solar, including net metering, RENU loans, and exemptions on sales and use tax as well as property taxes.
- Denver is an excellent location for solar; it currently ranks #12 among U.S. cities.
- The average solar panel cost in Denver is $2.28 per watt or $9,576 after claiming the 30% tax credit. This is much cheaper than the national average.
- The average payback period for solar panels in Denver, CO is 7 to 8.5 years.
What rebates, incentives, and tax breaks are there for solar in Denver?
The state of Colorado offers a range of incentives to encourage residents to go solar, including:
- A net metering program that pays homeowners for additional energy generated by their solar systems.
- The federal solar tax credit that gives you a discount on your income taxes equal to 30% of solar installation costs
- Community solar initiatives enable residents to sign up for an off-site solar system even if they don’t own property or have a suitable roof surface for solar.
- Colorado RENU loans for home energy upgrades, which includes the installation of solar panel systems. The program offers easy financing terms and is backed by the Colorado Energy Office.
- Tax breaks, such as:
- Sales and Use Tax Exemption for Renewable Energy Equipment, which eliminates the payment of sales tax when you buy a solar system,
- Property Tax Exemption for Residential Renewable Energy Equipment, which helps homeowners avoid higher taxes on increased resale value resulting from a solar installation.
Which solar system is right for your Denver home?
Deciding on the right solar system depends on various factors. Some panels offer higher efficiency ratings than others. Combine these with individual circumstances such as the direction and pitch of your roof, your household energy consumption, and anticipated future requirements.
Contact an authorized solar energy installer and ask for a comprehensive quote incorporating various equipment and financing options.
Which installer should you use for your solar system?
Finding an installer for your Denver, Colorado solar system begins with research.
We recommend you search online for the local solar companies operating in your area. They will have intimate knowledge of the local climate, government regulations, as well as the building and electrical codes affecting your home. They are also likely to have a good understanding of Denver’s permitting requirements, which will help avert delays in your installation. Find top-rated solar companies in your area.
Once you find a company that looks promising, check the company’s license and credentials, and ask for an evaluation and quote. Ask about the equipment they recommend, and request calculations that show the financial savings you can expect to generate.
Next, use the solar calculator below to determine whether their numbers align with industry standards. Read reviews from former clients, and request contact details for personal references.
When you’re spending thousands of dollars and entrusting your home to a vendor, it’s reasonable to ensure they know what they're doing.
Are the conditions ideal for solar in Denver, Colorado?
Absolutely. Environment America shows Denver is ranked 12th among U.S. cities based on the installed solar power capacity. The city is reported to experience 300 days a year when the sun appears, making it exceptionally good for solar energy. While this fact is disputed in some quarters, experts agree Colorado is one of the sunnier states.
The support offered by the local government for solar initiatives means authorities actively work to promote and encourage installations.
What are the benefits of going solar in Denver?
There are many advantages to going solar in Denver, Colorado. These include:
- Electric bill savings. In one analysis we performed, we estimated that a Denver home with a $95 monthly bill can expect a net profit of between $23,496 and $28,717. These savings are largely made possible by Colorado’s generous net metering incentive. As noted elsewhere on this blog, this figure will vary for you based on your specific circumstances.
- Energy independence. While the area isn’t known for extreme weather events, cold winters make energy security an important factor. This applies especially to households with vulnerable members, such as those who use electrical medical equipment for survival.
- Reduced environmental impact. In the U.S., around 29% of global warming emissions come from the use of fossil fuels, like coal and natural gas, to generate electrical power. Going solar can reduce your carbon footprint by 100,000 pounds during the life of your installation.
- Financial security. In addition to the cost savings and returns you receive from net metering, you will see an increase in your home’s value, and you’ll also be protected against energy rate hikes in the future. This helps achieve financial security, which is important for your peace of mind.
The more households that choose to go solar in Denver Colorado, the cleaner the region will be, which contributes to improved public health. In addition, the higher the demand for solar the more jobs will be created in the sector, which benefits everyone who lives in the state.
Are there any other solar options in Denver?
Denver has a well-developed solar industry, offering consumers many options when it comes to solar. In addition to rooftop solar for homes, you will also find plenty of companies offering solar batteries and solar water heaters. Alternatively, you could choose to sign up for a community solar program.
There’s also a green roofs law (formerly the Green Roof Initiative), under which new buildings over 25,000 feet in size are mandated to incorporate energy efficiency and cooling measures. Compliance can be achieved by installing solar panels on-site or dedicating roof space to vegetation, among other options.
Green roofs are expensive to implement, but that’s the only negative factor in the initiative. With Denver’s metropolitan area growing rapidly at 1.5% per year, reducing the city’s carbon footprint is important.
What is the average cost of a solar system in Denver?
Installing a solar system in Denver, Colorado is typically less expensive than the national average.
As of January 2023, the average cost of solar panels in Denver is $2.28 per watt. This means that a typical 6,000-watt (6 kW) solar system will cost $9,576 after claiming the 30% federal solar tax credit that is currently available.
This compares very favorably with the average U.S. price of $3.00 per watt, or $12,600 for a 6 kW system after the 30% tax credit.
You can check the average cost for solar panels in your zip code by using this online tool.
How long is the payback period?
The average payback period for home solar panel installations in Denver, CO is 7 to 8.5 years.
The payback period is the length of time it takes to break even on your investment. Comparing payback periods of various quotes will help determine when your installation will begin earning money. This is calculated using:
- the net cost of installation, minus tax breaks and incentives you are eligible for
- the system size you choose and the equipment included
- average monthly electricity costs,
- estimated power generation.
Identify your total cost and divide it by the annual financial benefits. This gives you the number of years in your payback period, after which you count the returns as financial gain.
Given that the average payback period in Denver is under 10 years, while warranties last 25 years or longer, your savings after payback can add up to well over $20,000.
Andrew Sendy
Home Solar Journalist
Andy is deeply concerned about climate change but is also concerned about cost of living pressures on American families. He advocates for solar energy and solar battery storage only to the extent that they make financial sense for homeowners. He is not affiliated with any particular solar company in the United States.