Free Colorado Solar Incentives: Register for Solar Panels (Open Enrollment)

Colorado offers residents and businesses clean energy incentives to install solar panels and invest in clean energy vehicles.

In combination with federal tax credits for green energy, the cost of any new equipment installed can qualify.**

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Click Here to Sign Up for Free Solar Panel Installation

Schedule	Acceptance Date	Last Day To Register
Q1	Monday January 1, 2024	March 30, 2024
Q2	Monday April 1, 2024	June 30, 2024
Q3	Monday July 1, 2024	September 30, 2024
Q4	Tuesday October 1, 2024	December 30, 2024
Q1 (2025)	Wednesday January 1, 2025	March 30, 2025

Energy Smart Colorado

Inflation Reduction Act Tax Credits & Incentives

Xcel Energy

 

PLEASE NOTE:  Beginning in 2025, the federal tax incentives for solar residential installation will be impacted. See the table below for the dates and amounts currently legislated.

**The Federal tax credit is available every year that new equipment is installed.

Clean Energy and Vehicle Federal Tax Credits

Business Federal Tax Credits

 

State Tax Credit and Rebate Schedule

Year	Credit Percentage	Availability
2024-2032	30%	Individuals who install equipment during the tax year
2033	26%	Individuals who install equipment during the tax year
2034	22%	Individuals who install equipment during the tax year
2024-2025	$5,000-$12,000	Individuals who purchased or leased a motor vehicle or electric or plug-in hybrid electric truck
2026-2028	will be determined by Legislative Council Staff or the Office of State Planning and Budgeting	Individuals who purchased or leased a motor vehicle or electric or plug-in hybrid electric truck
2024	$500-$3,000 depending on the heat pump technology	Contractor and customer who purchase and install heat pumps
2026-2029	will be determined by the Colorado Energy Office	Contractor and customer who purchase and install heat pumps
2024-2032	Varies, amounts may be project and/or applicant-type specific	Industries within North American Industry Classification System (NAICS) codes 31-33
2024-2032	Varies, amounts may be project and/or applicant-type specific	Eligible entities for geothermal energy projects

If you have determined that you are eligible for the green energy credit, complete Form 5695 and attach to your federal tax return (Form 1040 or Form 1040NR).
IRS Form 5695
Instructions
Future Due Dates and Basics

Office of Energy Efficiency & Renewable Energy
Forrestal Building
1000 Independence Avenue, SW
Washington, DC 20585

RESIDENTIAL CLEAN ENERGY TAX CREDIT

Solar Tax Credit Options for Colorado Residents

Colorado residents, like those in all states, can take advantage of of the Federal Tax Credit for Solar Photovoltaics, but there are many other state and providers rebates and programs that have open enrollment now, which can save you lots of money on your monthly energy costs.

Colorado has obtained a high ranking for state solar implementation and other renewable energy options.

This comprehensive guide explains exactly how you can access and register for solar tax credits and other Colorado solar incentives that reduce dependence on fossil fuels and help you reduce your out of pocket expenses. 

Currently, Colorado uses wind, biomass, geothermal, hydroelectric, and solar power to supplement the fossil fuel energy in the state.

In order to increase solar use, a lucrative solar tax credit for residents is available, offered by the U.S. government.⁷

Using the Federal Tax Credit for Solar Photovoltaics

With the solar tax credit, homeowners can receive 30 percent of the total amount of money that you spent on your home solar installation, as a tax liability credit, or ITC, as it is more popularly known.

It is not really a cashback. Instead, this money is deducted straight from the amount of taxes that you owe for that year.

This incentive has been in effect since the year 2005 and was supposed to expire until the Inflation Reduction Act of 2022 had it extended until the year 2032.⁸ After that, the rate of the tax credits will start gradually declining, from 30% to 26%, and later to 22%, before fully ending in 2035 (when solar credit expire under this legislation).

You may ask, what are the individual limits on the federal solar tax credit and when do federal credits expire? Is there a maximum amount payable?

More great news: there are absolutely no limits when it comes to how much you are able to get from the incentive, just as long as it is 30% of the installation cost.

There are no caps, and you can even have some of the credits rolled over to the next four more years if your tax liability doesn’t really cater to the amount.

Application Process for Energy Tax Credit

If the solar panel tax credit looks like something that you would be interested in, there is one more thing to know: how to apply for it. Not everyone is able to get it: what matters is that you have to follow the rules, be eligible, and actually learn how to fill in the solar tax credit forms Colorado requires.

At least it helps that it is not such a daunting process and will most likely take just a few minutes.

Step 1: Print Out Federal Solar Tax Credit Form 5695

You may ask, what forms do I need for solar tax credit? You will start off by printing out the IRS Form 5695 from the official IRS website.³

This is probably the first and most important part of the whole application process because it is literally the only way that the IRS can do their review and deem you eligible for the tax credit.

Step 2: Fill In the Documentation

If you were wondering how does the IRS verify solar credit. Here is where you will have to disclose all the information that is required about the solar system.

You will have to follow the Form 5695 instructions from the IRS,¹³ detailing how massive the setup really is and how much it costs you to get it up and running.

Step 3: Filing

When you are certain that Form 5695 is answered very accurately,⁹ you are now free to file it together with your taxes. You can always confirm your tax returns to see to it that the tax credit was effected.

Before you even apply for the Colorado solar tax credit in the very few simple steps above, you should know that there are rules to follow, failure to which you may sadly miss out on the incentive.

• The application has to be made after you are done with the entire solar power system installation. Only then will you be able to calculate the total cost to install solar panels and the expected 30% credit.
• The only way that you will be able to receive the credit is if you can prove that you are the actual owner of the system. It must be fully under your custody, and that is why systems under solar leases are not eligible.
• The panels and the equipment are supposed to be brand new, straight from a solar installation Colorado company.

US Dept of Energy Solar Options: Energy Provider Rebates for Solar Power

Colorado understands that one effective way for the solar market to improve is only if residents find solar power more accessible. Here is where the solar incentives in the area come into play.

In addition to the federal solar tax credit, there are also some really great programs at the local level that are being offered either by local utility companies or municipalities.

Xcel Energy Rebate Program

Xcel actually offers one of the most enticing renewable energy programs for its customers.¹⁹ Would you believe that there are up to $2,000 up for grabs for each and every kilowatt that you have installed?

What the utility does is offer you about $0.07 for a kWh, and what that basically means is that a 7 kW system will be able to bring in a total of $15,000.

Moreover, there are energy efficient appliance rebates (such as water heaters), rebates for LEDs and smart thermostats as well.

This incentive is however only available for projects like community solar or commercial customers but enrollment is free.

The four step process is outlined on the website,¹⁴ making it simple to register for this Colorado solar incentive.

Colorado Springs Rebate Program

This utility provider also offers cash rebates for upgrading to LED,¹⁵ energy efficient water heaters and other water conserving products.

And the solar program offers incentives for rooftop installations as long as you are a customer and have at most a 15 kW system.¹⁶

There is a $0.10 for every watt up for the taking, and that means that it is about $750. Simply visit the site to enroll.

Black Hills Energy Program

If you are a loyal customer of the Black Hills Energy program,¹⁷ you will be able to receive about $0.03 for each and every single kilowatt you can produce, just as long as your system is 20 kW big or less.

Sign up for this rebate using their website.

EnergySmart Colorado

EnergySmart is also offering its customers attractive solar rebate Colorado programs.¹⁸

One example is the 25% rebate for solar system installation, capped at $2,500.

Holy Cross Energy Solar Rebates

This energy provider offers a host of solar incentives for customers, including solar rebates for systems that meet the HCE requirements.

These include the Distribution Flexibility program, optional tariff (DFT) and Time of Day optional tariff (TOD).

Customers can receive rebates ranging from $100 per kW solar energy systems, to $500 per kW green energy. To apply for these first-come, first serve Colorado solar incentives, visit the utility company’s website.

San Miguel Power Association (SMPA) Renewable Energy Rebate

This utility provider also offers up to $300 in solar rebates for customers who install a home solar systems.

Town of Erie: Rooftop Solar Rebate

In Erie, residents who install home solar can obtain a $500 rebate.

To qualify and enroll in this cash payment, apply on the website.

Aspen Solar Rebate for Residential

In Aspen, residents can enroll to collect solar rebates, based on specific conditions.

For example, you can only claim the rebate (up to $2250) if the system is produces solar panel electricity for your personal energy use.

In other words, you can’t install a system that is twice what your home normally uses (in the last 3 years) and qualify for the watt-based cash offer.

What Materials and Parts Do You Need for Solar Panel Systems?

A solar module is an elaborate interconnection of cells that are basically what make up the solar panel. Several PV modules are what make up the PV panel that you know.

Besides the solar photovoltaic panels, there are other equally important components without which the system would not even work,⁶ and you should know about them before the installation.

There are the inverters (string, power optimizers, and microinverters), and what they do is to make the conversion from direct power from the sun to electricity that your household or business can now use.

The charge controller is also there to regularize the power and make sure that it is safe for the system. You will also need a battery system to store the excess power from the panels and, lastly, the racking because the panels don’t just go directly onto the roof.

Given how elaborate the installation seems to be, you can’t help but wonder, what is the cost of solar panels in Colorado? The average cost of installing solar panels in Colorado is about $13,000- $19,000, that is particularly if you have a 5-7 kW system.²

But of course, the solar estimates rate varies based on many factors, and in reality, you may find yourself paying less or sometimes more.

It all depends on a lot of different factors. Here are some of them

• How large your household is or how high its energy needs are
• Quality of the panels that you go for
• Installer

Also, remember that the solar incentives in Colorado may also step in to help reduce the total average cost of installing solar panels.

So, you don’t have to worry about them being expensive. Also, think about the savings that you are going to end up making over the course of the life of your panels; it makes the cost all worth it in the end.

Solar Installation Calculator Costs

A residential solar power calculator is a handy tool that any first-timer should have. Not only do you need software that helps you estimate the cost of solar, but it should also be able to help you calculate the number of panels that you need and how much power will be coming from those panels.

All you have to do is enter the details that the software needs and let it do the rest.

For instance, when using a solar panel calculator by address, you will enter your ZIP code first for the system to make out the average solar panel cost based on where you live.

After that, you will also feed in some specifics like:

• Type of roof
• Form of roof (flat or steep)
• Shading or the amount of sunlight hours a day
• Size of your house in square feet
• Average energy bills

It may look to be asking a lot, but adding these pieces of information will give a more accurate average cost of the solar panel installation for your home.

When it comes to the solar energy estimator or the PV watts calculator, you will go through the same process of entering details about your solar panels, but the only difference is that, in this case, there is more emphasis on just how much power will come from your system. Here is where information like the size of the system, or number of panels, the angle of your roof, and the array type will come in handy.

How To Save on Utilities Costs in Colorado

There are plenty of benefits that come with going solar.¹⁰

The minute you detach from the traditional grid and are able to produce your own power from your rooftop panels, you start making savings. The hefty utility bills that you are used to that come every month just stop, and you can focus on the payback period of your panels, after which you can start counting the actual savings that you make over the course of their service.

You can even enroll for net metering in Colorado to help further reduce the amount that you pay for receiving power from the grid. It’s like you are selling the power and the credits are the payments that step in to offset the utility costs.

Maybe the only problem that stands in the way is the upfront cost of installing solar panels in Colorado. .

The concept of free solar panels in Colorado or Colorado no-cost solar program is quite tricky because there are currently no such programs. That is unless you are talking about solar leases or Power Purchase Agreements, and none of them is a Colorado free solar program.

In these contracts, you allow an installer to set up the system for you at very little or no cost, and in exchange, you have to pay a small solar bill at the end of every month.⁵ It has seemed to work for so many people so far, especially low-income households.

Using Photovoltaic Cells in Colorado for the Solar Grid

If you have weighed all your options and are certain that going solar would be the best thing for your home, the next stop is now finding the right company or installer for the system.

Remember that this project may actually be one of the most crucial and even the most pricey that you will ever carry out for your home, and that is why you have to be very careful when choosing who will get the job done.

1. Take your time to research which companies are operating in Colorado, and particularly in your city first. That kind of helps you narrow it down only to the ones in your area.
2. With a full list, it now becomes easier to check the company reviews and ask around to get more details about how they work, their level of professionalism, and any other information that you may need. And with that, the list starts getting shorter and shorter.
3. When you are certain of the top few companies that you would really like to work with, you can now start comparing the rates. With that, you will be certain that you are getting the best of both worlds, a top company that has also got the most competitive prices.

How Long Will Solar Panels Last in Colorado?

So, before you buy the panels, you should know how long will solar panels last in Colorado. This will be a clear indication of the solar panels’ sustainability and will also be quite instrumental in helping you calculate the total amount of savings that you are going to make over the course of their life.¹¹

It is a good thing that the life expectancy of solar panels in Colorado stands at 25 to 30 years, although there are also exceptional cases where the equipment can go up to 40 years.

Given that the panels usually lose about a percentage of their efficiency in a single year, it basically means that even after the 25 years have gone, they will still be at 85% efficiency.⁴

Solar Power in Colorado: Current Solar Farms

Photovoltaic solar energy in Colorado has been a massive success, particularly in the last decade. The SEIA states that the cost of solar panels in Colorado has dropped a historic 43% so far, and the state is not doing too bad either when it comes to solar market ranking.¹²

Did you know that Colorado is number 13 on the list of the best states to go solar?¹ That is a huge deal if you ask.

Just imagine harnessing power from a resource that is completely free of charge and turning it into energy that can power up your entire home. That is exactly what solar panels do.

One more thing that makes Colorado stand out from other states is the fact that it has abundant sunshine. With an average of 300 sunny days out of the entire year, you can limit how much storage you need to purchase.

Keep in mind that knowing when federal credits expire for government solar programs can make a big difference in the cost of home solar power.

Using Colorado solar incentives to reduce your energy costs is easy, and knowing where to enroll in rebates and tax credits can help mitigate the upfront installation costs so you can take advantage of them now.

Frequently Asked Questions About Colorado Solar Incentives