With 3200 hours of annual average sunlight, Colorado has excellent potential for solar energy production. The Centennial State has been encouraging residents to switch to renewable energy, with an investment of $3,259.26 million for solar. Currently, there are enough solar energy systems installed in Colorado to power approximately 249,924 homes.
If you have been thinking of getting solar panels installed on your property in Colorado but are concerned about the cost, worry not. Several financial incentives make 2023 the perfect year for a solar system installation.
Cost of Solar Panels
Solar energy is benefitting from an ever-increasing popularity, and Colorado is no exception. Installers, along with local and federal bodies, offer incentives to encourage electric consumers to make the switch over. The equipment has become significantly more advanced and efficient over the years, effectively dropping the cost of solar panels.
The exact cost of a solar panel system for your Colorado property depends on some factors, such as your county of residence, the size of your system, the installation company you have chosen, and the equipment used. According to recent data, a 5 kilowatt (kW) solar installation in Colorado averages between $13,388 – $18,112, with an average gross price of $15,750.
This might sound like a huge investment, but the good news is that there are plenty of opportunities to save on solar in 2023. There are several financial incentives available in 2023 that can help you out, so read on to find out more!
Federal Solar Tax Credit
The federal solar investment tax credit (ITC) is one of the biggest incentives available for property owners. Using this, a taxpayer can claim 30 percent of the cost of a solar energy system as a credit on his/her personal income taxes. For instance, if you purchase solar panels worth $15,000, you can get a credit of $4,500 on your federal taxes. But cash in on the 30 percent credit soon, since it is valid only till the end of 2030.
Solar Incentives in Colorado
Like many other states in the nation, Colorado also has net metering. This arrangement ensures that you get benefits from every bit of solar energy that your panels produce. For instance, on peak sunny days, the energy system may be producing much more energy than you require for your use. But instead of this excess energy getting wasted, owners of homes wired for net metering can sell it back to the grid.
The amount that you feed back into the power grid is applied as a kilowatt-hour credit on your next utility bill. This credit can be carried over month after month. Say you contribute $50 worth of solar energy and consume $60 worth – your total monthly electricity bill will be just $10. In this way, you can use the solar energy generated by your system on sunny days to pay your bills on cloudy days, thus increasing your savings. Moreover, this is excellent for the environment, since every ounce of solar energy produced is being used from the grid by those who need it.
Renewable Portfolio Standards
Colorado also has one of the strongest renewable portfolio standards (RPS) in the country. This regulation requires investor-owned utilities to get 30 percent energy from renewable sources by 2021. With the distributed generation carve-out, 3% of retail energy sales is required to be sourced from distributed energy sources, such as residential solar installations.
RPS Solar Rewards Program
While this may not be a direct incentive for customers, it encourages utilities to offer rebates and incentives to you. The energy that your solar panels produce (and you don’t use) can be sold to these companies. This way, they get to meet their RPS targets. For example, Xcel Energy, which is one of the biggest utility companies in the state, has a Solar Rewards Program. Through this, the utility will pay you $0.005 per kilowatt-hour in exchange for Renewable Energy Credits (RECs) for the solar energy produced by your home system.
Colorado’s Local Incentives
Colorado residents can take advantage of some local incentives that will help offset solar costs. Utility companies, statewide incentives, and loans can all help finance your purchase in the Centennial State.
Depending on where you live, your utility company may offer you cash rebates to cover solar installation on your property. In Eagle Valley, Roaring Fork Valley, and Summit County, EnergySmart Colorado offers its customers rebates worth $400 to $3,000 towards solar home installations. For western Colorado residents, Holy Cross Energy offers customers a per-kilowatt (kW) rebate, offering $750 for the first 6 kW. The value of this rebate will decrease for purchases of larger systems. Colorado Springs Utilities offers a Renewable Energy Rebate Program, which provides a rebate of $0.20 per watt on grid-connected residential as well as commercial solar photovoltaics. There are more companies that provide rebates, so check with your local utility company to see what you may be eligible for in your area.
If you’re in the market for a new home or have recently purchased one and are looking to install solar panels, the state of Colorado will actually help you pay your mortgage! Those factors will make you eligible for the Colorado Energy Mortgage Incentive Program when you add energy-efficient upgrades, including renewable energy systems such as solar, within 120 days of purchasing your home. Your payment can be between $750 and $3,000, depending on your home energy score.
For those ready to switch to clean solar power but are still concerned with the costs involved, Colorado’s Residential Energy Upgrade (RENU) Loan Program can help finance your solar energy system installation in 2019. This is a state-funded loan program that’s good for purchases of solar photovoltaic systems and solar water heating. If you are a recipient of this program’s loans, you will be able to receive a loan of up to $35,000 towards solar projects on your home.
There is a variety of repayment plans, some with terms that extend up to 180 months. The interest rates for this loan are considerably low, with rates starting at just 2.75 percent.
Colorado residents enjoy beautiful landscapes and bountiful sunshine. This is an excellent time to turn that sunshine into clean, sustainable energy for your home or business. Talk to solar installation companies in your area to know specific details about the solar rebates and incentives available for you in 2023. A qualified installer will also be able to help you apply for the programs and give you advice on how to finance your system.