Solar power in Colorado

The initial cost of solar panels in Colorado can be substantial, averaging around $27,696. However, the long-term savings in energy costs make it a worthwhile investment. The exact cost of a solar system will vary based on factors like your home’s energy consumption, solar system size, roof type and condition, and other considerations. Solar power can significantly reduce your electricity bill, decrease your carbon footprint, and help you achieve greater energy independence from traditional utilities. Typically, you can expect to recoup your investment within a payback period of six to ten years.

Colorado is an excellent location for solar power because it gets more than 300 days of sunshine annually. A pro-solar policy plays an important role in the adoption of panels. Colorado has strong net metering policies and other incentives that make solar energy a cost-effective and attractive option for residential customers. SaveOnEnergy can help you find a solar panel installer in your area. You can get detailed Colorado solar quotes with an estimate of your savings. 

Colorado also has a Renewable Portfolio Standard (RPS) that requires utilities to generate and purchase 80% of their electricity from renewable sources by 2030, with a target of reaching100% renewables by 2050. Residential solar system owners can help produce solar energy and sell it to utilities to help meet their RPS goals. This page will cover the benefits of going solar, how much it costs, and whether solar panels fit your Colorado home.

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Colorado solar panel cost

Understanding the cost of solar panels in Colorado is important when deciding whether to invest in them. According to Lawrence Berkeley National Laboratory’s Tracking the Sun report, solar panel pricing in Colorado averages about $4 per watt, with system sizes averaging 6.8 kilowatts (kW), totaling $27,696. The following table compares the average system sizes, costs, and the number of panels in Colorado relative to national solar figures based on 400 and 300 Watts per panel.

Colorado vs. the U.S.

*Estimated panel count is based on the average panel size ranging from 300 to 400 watts.

The next table shows the cost breakdown based on various solar system sizes in Colorado, highlighted in Tracking the Sun data. If you have net metering benefits, you can get a bigger system to fully cover your electricity needs and send back any surplus solar generation to the grid. A smaller solar system can be the right fit for you if you aim to lower your electric bill.

Compare solar panel cost and size in Colorado

*Estimated panel count is based on the average panel size ranging from 300 to 400 watts.

You can significantly lower the total solar investment with federal solar incentives like the Residential Clean Energy Credit. Let’s say you pay $27,696 for a 6.8 kW system in Colorado, and your electric bill is the state monthly average of $103.28. The payback period for your solar panels in Colorado will be about 15 years if you factor in the 30% Residential Clean Energy Credit. The tax credit would help you recover $8,309. In 20 years, your savings would amount to $5,400.

The solar system size and capacity you need will depend on various factors, including your energy usage, panel type and size, local climate, sunlight availability, roof characteristics, energy goals, and financial constraints. The solar installation process typically entails a thorough site evaluation and an in-depth energy analysis of your home. Completion of these steps will help build a system to meet your needs. SaveOnEnergy will connect you with a local installer to help guide you through this process.

Factors determining Colorado solar panel costs

Solar systems are custom products designed to suit your home’s specific energy needs. The following factors can determine the cost of solar:

Based on data from the National Renewable Energy Laboratory (NREL), we can provide a general breakdown of the costs associated with solar system components as a percentage of the price per watt.

Source:NREL

The “Balance of System” (BoS) portion includes all the hardware needed to make solar panels work well together. “Soft costs” are the non-material expenses of installing and operating solar systems. This covers customer acquisition, marketing, financing fees, permitting, inspection, design, engineering, customer support, and solar system maintenance.

The best Colorado solar panel incentives or rebates

The cost of solar panels has dropped significantly in the last decade, but it is still a significant investment. Solar incentives, tax credits, and rebates can help offset some of those costs and make solar panels more accessible.

In 2022, the U.S. Congress extended the federal Residential Clean Energy Credit (formerly called the ITC) through 2032 as part of the Inflation Reduction Act, a landmark climate law. This incentive allows you to claim a 30% tax credit in your federal taxes if you install solar panels on your rooftop. It can also be applied to systems previously purchased at the beginning of 2022. The credit will decrease to 26% in 2033 and 22% in 2034 before expiring in 2035. At the state level, Colorado homeowners have several state solar rebates and incentives available for installing solar panels:

Solar panel incentives in Denver

The city of Denver provides additional benefits if you decide to buy solar panels.

• You can receive$4,000 in rebates from the city. To be eligible for the rebate, you must meet the following criteria:
  • Residency: You must reside in the City and County of Denver.
  • Project Type: The rebate applies to projects carried out in existing residences. New construction projects are not eligible. In addition, the project should be completed in a single-family home or a multi-family building with a maximum of four units.
  • Xcel Energy Customer: You must be a customer of Xcel Energy, the area’s utility company.

Low-income households earning less than80% of the area median income could get more funding for their solar installations.

If you can’t afford to purchase a system in Denver, consider joining the Denver Solar Co-Op — a division of Solar United Neighbors.

• The Co-op doesn’t obligate you to purchase solar. However, there is limited availability.
• If you join the Co-op, you could get a rebate of up to $8,000. Eligible households can start saving on their electricity bills right after the installation with little to no upfront expenses. 
• The application deadline is July 24, 2023, after which the city of Denver will review all applications and inform the chosen recipients of the rebate. The city of Denver doesn’t specify the qualifying criteria for the rebate.

Solar panel incentives in Colorado Springs

• Residential solar system owners in Colorado Springs can save on their electricity bills and lower the upfront cost of investing in solar by taking advantage of net metering benefits from the Colorado Springs Utilities (CSU). 
• If you own solar panels in Colorado Springs, CSU gives you the full retail value for the surplus electricity you send back to the grid, helping you maximize your savings. 
• If you have a surplus of net metering credits at the end of the year, you will receive a credit on your bill for January.
• CSU provides detailed information on how to go solar and how net metering works in Colorado Springs. 

Solar panel incentives in Aurora

• Homeowners with solar panels in Aurora can receive the full retail rate of net metering credits from their utility, Xcel Energy. These credits are aimed at lowering your electric bills and increasing your savings. 
• You have two options to get the credits: kilowatt-hour (kWh) credits used toward future bills or a kWh-based cash payment defined by the Average Hourly Incremental Cost of Electricity of the preceding year.

The following is the list of eligibility criteria for Xcel Energy’s net metering benefit.

• You must be an Xcel Energy customer for residential or business electricity.
• You must have an active and valid account and premise number in your name, corresponding to the name on the Xcel Energy account/bill.
• All solar equipment must be UL 1741 certified and listed on the California Energy Commission website. 
• You must provide general liability insurance based on the Gross AC Nameplate Rating of the Generation System greater than 1 MW AC.
• Systems must be sized so that the expected generation, when combined with other distributed generation resources, does not exceed 200% of historical consumption in the previous 12 months at the time of application submission.

Save by going solar in Colorado

Lower energy costs

Many people choose solar energy for their Colorado homes to lower energy costs. The price of electricity from the power grid can change abruptly and increase over time. One way to reduce those energy costs is to generate electricity with solar panels. You can also improve your home’s value by installing solar. A solar array is a significant investment, but many homeowners find long-term savings in energy bills after recouping the initial costs in a few years.

Establish energy independence

Extreme weather events can cause outages and a spike in electricity rates. You can increase your energy independence by powering your home with solar energy. When electricity rates spike, you will have extra protection because solar panels generate electricity for your home.

Go green

Another benefit of going solar is its positive impact on the environment. Solar energy production does not emit carbon dioxide and other pollutants into the atmosphere. Investing in a solar system can help reduce your home’s carbon footprint. If you’re concerned about the environment’s future, installing solar panels can directly support the planet.

Solar financing options

Most consumers will save more in the long term by buying and owning the solar system. According to the Office of Energy Efficiency & Renewable Energy, you can increase your home’s resale value by $15,000 if you own solar panels. Considering that an average solar system in Colorado costs about $27,696, you could offset that cost in the future with an increase in your home’s value. Here’s a summary of the advantages and disadvantages of buying, leasing, entering a power purchase agreement, or joining a community solar program.

Colorado solar panel companies

As home solar has grown in popularity, the number of local and national solar companies on the market has increased. This is especially true in Colorado, where tax credits and incentives have attracted 388 solar panel companies. If you are interested in investing in Colorado solar panels, you can begin the research process here. SaveOnEnergy partners with solar installers and community solar projects to give options to Colorado residents looking to go solar.

Solar installer	Year founded	Financing options	Warranty terms
	2020	Purchasing, financing, or leasing systems	10-year quality-of-work guarantee and 25-year manufacturer warranty
	2010	Purchasing, financing, or leasing systems	Minimum 12-year product warranty and 25-year performance guarantee
	1985	Purchasing, financing, or leasing systems	25-year product, performance and quality of work warranties

What to look for in a solar contractor

It’s important to get competing solar bids from several installers. The following is a list of some important factors to consider before deciding on a solar installer:

• Licenses. Ensure the contractor has the licenses and certifications to install solar panels in your state. Ask if they are certified by the North American Board of Certified Energy Practitioners (NABCEP) or other reputable organizations. Proper licensing ensures that the contractor has the training and expertise necessary to complete the installation safely and effectively.
• Experience. Check the contractor’s experience in the solar industry. Experienced contractors are more likely to have the knowledge and expertise to effectively design and install your solar system. 
• Products. Consider the quality of the solar panels, inverters, and other components available from the contractor. Contractors tend to have a few component options available. 
• Reviews. Read online reviews and ratings to understand the contractor’s reputation and customer satisfaction. Ask for references from previous customers. Online forums can be a great place to get first-hand information on a solar installer in your area.
• Communication. A good solar contractor should be responsive, transparent, and willing to answer any questions you have throughout the solar process. Ask about the installer’s post-installation services, like maintenance and monitoring so they can address any future maintenance or repair needs.

How does Colorado solar save you money?

A primary motivation for installing solar is to save money. While a solar investment can be high, you can experience savings for decades. 

• Bill savings. Solar energy is a renewable resource, and once the initial installation cost is covered, the electricity your system produces is essentially free. This can significantly reduce your monthly electric bills, or even eliminate them. Getting the appropriate system size for your home’s energy use is important.
• Net metering. Colorado’s net metering policy allows you to receive credits for surplus electricity that your solar panels generate and send back to the grid. These credits can offset the cost of electricity you use during the times when your solar panels aren’t producing enough energy, for example, at night or during cloudy days.
• Long-term savings. Over time, the cost of electricity from traditional sources tends to rise. By relying on electricity generation from solar panels, you can protect yourself from future increases in utility rates. The savings you accumulate over the years can be substantial, especially considering the typical lifespan of solar panels, which can range from 25 to 30 years or more.

Beware of Free Solar Panels Scams in Colorado

• Be mindful of claims for free solar panels, which are often misleading sales pitches or scams. Nobody gives or installs solar panels for free. The U.S. Department of Energy warns about free solar panel scams, cautioning consumers about providing personal data to get a price quote or verify service eligibility.
• Certain solar companies may offer to install solar panels for free, but only if a homeowner signs a long-term lease or power purchase agreement (PPA). However, panels installed through a lease or PPA are never free but rather different forms of financing.
• It is important to carefully review the terms of any offers for free solar panel installations and consider the long-term financial implications before signing any contracts.

Important solar installation factors to consider

It’s important to note some factors that can affect how much electricity your solar panels can generate. Here are three important considerations to remember when thinking about investing in solar panels.

• Roof condition, age, and angle. Your home’s roof is the first point of consideration. If you have an older roof, it might not support the weight of a solar system. If this is the case, you may need to fix or replace your roof before installing solar panels. According to the U.S. Department of Energy, panels will be most efficient on south-facing roofs with a slope between 15 and 40 degrees.
• Shading around your property. Solar panels are most efficient in sunny areas. Colorado receives more than 300 sunny days each year. While solar panels can generate electricity in indirect sunlight, they will be most efficient when placed on a roof with consistent and direct access to sunlight.
• Investment in solar vs. time. Think about how long you plan to live in your home before you go solar. Buying your solar system makes the most financial sense over the long term. Remember that purchasing or financing a solar system can add value to your home if you sell it. However, transferring solar leases and PPAs can be more difficult.