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Colorado solar at a glance
Estimates use the inputs above and the assumptions in our methodology: Colorado net metering: exports credited at the retail rate (statewide rule; your utility's tariff may differ). Prices rise 2.5% a year; panels lose 0.5% a year.
Solar cost in Colorado by system size
Same assumptions as the typical home above; only the system size changes. Prices are the state median before incentives and include the incentives our calculator applies by default in Colorado.
| System | Price before incentives[3] | After incentives | kWh in year 1[2] | Year-1 savings[4][5] | Payback (years) |
|---|---|---|---|---|---|
| 4 kW | $14,400 | $14,400 | 6,380 | $1,070 | 12 |
| 6 kW | $21,600 | $21,600 | 9,570 | $1,360 | 14 |
| 8 kW | $28,800 | $28,800 | 12,760 | $1,360 | 17 |
| 10 kW | $36,000 | $36,000 | 15,950 | $1,360 | 21 |
| 12 kW | $43,200 | $43,200 | 19,140 | $1,360 | 24 |
Incentives that lower the price in Colorado
Business credit for leased and PPA systems (48E)
Claimed by the system owner, not the homeowner; solar must begin construction by July 4, 2026 or be in service by December 31, 2027[6]
If a company owns the panels on your roof (a lease or power purchase agreement), that company may claim the business clean electricity investment credit and can reflect it in your price. You cannot claim it yourself.
- Who
- Third-party-owned systems (leases and PPAs). Ask the provider whether the price assumes this credit.
- Deadline
- December 31, 2027
- Checked
- November 5, 2026
Residential renewable energy property tax exemption
Homeowner-owned rooftop solar on a home is exempt from Colorado property tax; third-party-owned (leased/PPA) residential systems are exempt only up to 100 kW AC.[7]
Solar equipment on residential property, owned by the homeowner and producing energy used by the home; independently owned residential systems qualify if no more than 100 kW AC and used primarily for the home.
- Who
- Solar equipment on residential property, owned by the homeowner and producing energy used by the home; independently owned residential systems qualify if no more than 100 kW AC and used primarily for the home.
- Deadline
- None set in the source
- Checked
- November 5, 2026
State sales and use tax exemption for renewable energy components
Exempt from Colorado state sales and use tax (local taxes may still apply)[8]
Components used to produce AC electricity from a renewable source, such as solar modules, racking and inverters (C.R.S. 39-26-724).
- Who
- Components used to produce AC electricity from a renewable source, such as solar modules, racking and inverters (C.R.S. 39-26-724).
- Deadline
- None set in the source
- Checked
- November 5, 2026
All Colorado incentives, including utility and local programs →
How Colorado utilities credit your solar
Xcel Energy must offer net metering: exports offset your bill at the full per-kWh energy rate, and leftover credits either roll over indefinitely (Continuous Rollover, cannot be cashed out) or, by default, are paid out once a year at Xcel's low average hourly incremental cost (about 1.5 cents/kWh in 2023). SB21-261 (2021) made indefinite carry-forward the rule unless the customer chooses annual reimbursement or donation.[5]
We have not added every Colorado utility yet, so the estimates on this page use the state-level rule: Colorado net metering: exports credited at the retail rate (statewide rule; your utility's tariff may differ).[5]
Next steps
FAQ
Frequently asked questions
How much do solar panels cost in Colorado?
How long does solar take to pay for itself in Colorado?
Is there still a federal solar tax credit?
Not for homeowners who buy. The Federal Residential Clean Energy Credit (25D)[9] does not apply to systems whose installation is completed after December 31, 2025. Leased and PPA systems are different: the company that owns the system may still claim a business credit.
sources
[ 9 ]Every number on this page links to one of these sources. Dates show when we last checked each one.
- EIA Electric Sales, Revenue, and Average Price 2024, Table 5A: Residential average monthly bill by stateeia.gov · checked Nov 5, 2026
- NREL/NLR PVWatts v8 (1 kW-DC, fixed roof mount, 20° tilt, south-facing, 14% losses, TMY weather)pvwatts.nlr.gov · checked Nov 5, 2026
- U.S. Distributed Solar and Storage 2026 Data Update (Barbose, Darghouth, O'Shaughnessy, Forrester), Berkeley Labeta-publications.lbl.gov · checked Nov 5, 2026
- EIA Electric Power Monthly, Table 5.6.B: Average price of electricity by state, year-to-date (August 2026, preliminary)eia.gov · checked Nov 5, 2026
- Xcel Energy Colorado Solar Bank Election Form (17-9178, 02-24)xcelenergy.com · checked Nov 5, 2026
- Public Law 119-21 - Sec. 70513(a) and (g)(5) (48E); Sec. 70512(a) and (l)(4) (45Y)govinfo.gov · checked Nov 5, 2026
- Renewable and Clean Energy Assessment - Colorado Division of Property Taxationdpt.colorado.gov · checked Nov 5, 2026
- Sales & Use Tax Topics: Renewable Energy Componentstax.colorado.gov · checked Nov 5, 2026
- IRS FS-2025-05: FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21 (OBBB)irs.gov · checked Nov 5, 2026
State data last re-checked November 5, 2026.
Change log
- Residential renewable energy property tax exemption: now "Homeowner-owned rooftop solar on a home is exempt from Colorado property tax; third-party-owned (leased/PPA) residential systems are exempt only up to 100 kW AC." (active).
- What the rule says updated to “Any excess generation from your net metered PV system will be multiplied by the prevailing total energy rate (base energy rate plus riders assessed on a per kWh basis)” (Xcel Energy Colorado Solar Bank Election Form (17-9178, 02-24)).