* Cost data based on quotes for fully-installed solar panel systems submitted on our platform. Prices are shown after applying the 26% federal tax credit.
Colorado is one of the best states to live in, and because the people who live there care about the natural environment, it’s also one of the best places to add solar panels to your home. The state has a commitment to get 100% of electricity from renewable sources by 2050, and you can be a part of that. Luckily, Colorado makes it easier by offering a few great incentives to help reduce the cost!
The average cost for an installed residential solar system in Colorado is currently $11,122 after claiming the 26% federal solar tax credit. This is $2.51 per watt. However, there is some variance in solar prices in different parts of the state. The graph below shows the average cost of installed solar systems in your part of the state.
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Prices based on a 5.3kW system, after 26% federal tax credit
Solar panels have fallen in price by more than 80% in the last ten years. In 2020 they also remain subsidized by the 26% federal tax credit and the net metering law, making them an excellent investment. They offer a return well above the long term average return from both the share market and also property investment.
Another way to look at this question is the levelized amount you will pay for each kWh of power you will use over the next 25 years with and without solar panels. As you can see below the savings are significant.
(forecast avg Colorado electric rates over the next 25 years)
The most important solar incentive in the country is the federal solar investment tax credit, or ITC for short. For 2020, the ITC can earn you up to 26% of the cost to install solar back as a tax credit on your federal taxes in the year after installation. At the end of 2020, the amount of the credit will decrease from 26% to 22%.
Colorado does have a statewide net metering program. This means the utility company will give solar owners full credit for any excess energy their panels generate and send to the grid.
Colorado offers sales and property tax exemptions that reduce the up-front and long-term costs of going solar.
If you’re an Xcel customer (over half the state), you can qualify for a special program called Solar*Rewards, which earns you an extra few cents for every kilowatt-hour (kWh) of electricity your solar panels generate. That might seem like small potatoes until you learn that the average-sized home solar system in Colorado generates about 9,500 kWh per year, earning its owner close to $700 in Solar*Rewards payments. That’s pretty great!
Eligibility: Federal incentive
Type: Personal Tax Credit
Eligibility: State incentive
Type: Sales Tax Incentive
(After tax credit)
(After tax credit)
You will save most money by buying your solar system rather than leasing it. Read more about the pros and cons of leasing vs buying solar.
Minimum of 25 years but generally 30 or more
Solar panels power your house when they can but your home uses the utility company for power at other times. In 2022 "solar systems with battery storage" are becoming more popular. These are known as hybrid systems.
A grid-tied system is the most common type of solar system. It has no solar battery for backup power and utilizes net metering to maximize savings. Solar panels are mounted on your roof then wired together, and the power generated flows into an inverter where direct current (DC) electricity is converted into alternating current (AC) electricity. This electricity is either used by your home or is exported to the utility grid.
In hybrid solar systems, rooftop solar panels are connected to both a solar battery and the electric grid. The solar electricity generated by your panels that your home does not use is stored in the battery instead of being sent to the grid, which reduces your reliance on the utility while also providing backup power when needed. Battery storage is still expensive but you may be able to reduce costs by using state incentives.
Off-grid solar systems are not connected to the grid at all, so all of your energy needs must be met by the sun. There is no utility to fall back on. The solar installation needs to power your home not only during the day, but after dark as well, so many solar panels and a large battery system are required. These systems are often expensive and don’t make sense for homes that have access to the grid.
Read more about types of home solar systems.
No, but cleaning them can improve power generation if they are dirty.
Given this environment, and the effect of import tariffs placed on solar panels by the Trump administration during 2018, it is hard to see that solar power system prices in Colorado will fall during 2022.
Depending on the location, solar panels will generate different amounts of electricity.
A solar system that is installed on a south-facing 27-degree pitch roof Colorado will generate 1,150kWh of peak DC (direct current) capacity per year per 1kW in the Denver area.
Enter your details into the solar panel calculator to see how your location, roof tilt, and roof direction impacts solar panel production.
The biggest advantages in Colorado for installing solar panels are the Xcel Energy Solar*Rewards program and the 26% federal tax credit. Colorado also offers those solar tax exemptions that make doing the right thing easier by reducing cost and uncertainty.
One downside to installing solar panels in Colorado is the relatively low cost of electricity here. At about $.12/kWh, Colorado is below the national average of $.13/kWh. That means if you’re not an Xcel customer, you might find the financial benefits of solar to be less great than they are in other states.
Still, Colorado rooftops get lots of sun, meaning every solar panel generates more electricity here than it does in cloudy states at higher latitudes. With incentives set to go away soon, now is the time to see how much you can save with solar in the Centennial state!
This solar calculator requires you to input your address, utility company, your average monthly power spend - it tells you:
If you want to see all of the above but also see live pricing, the three best solar deals available in your city and get binding quotes from each of these solar companies then use this Colorado solar panels calculator. This calculator requires you to also input your name and contact details because most of our 200+ installer partners will only authorize the sharing of their live solar pricing where we have validated that you are a real homeowner with a home in their service area. We respect the privacy of your data and only share your contact details with the solar companies you ask us to get binding quotes from.
Note: Please keep in mind that the best source of up-to-date information on incentives are the solar installers who specialize in your area.