Sustainability is a high priority for most Coloradoans, and this is reflected in the state’s high solar capacity. To help more residents get started on solar energy, Colorado offers considerable tax incentives and a solid net metering program.
In 2023, the cost for a 5 kilowatt (kW) solar installation in Colorado is about $12,000 after tax credits and about $17,000 before tax credits.
For more information on the cost of solar panels in Colorado, read on!
Primary factors that determine costs
Size of the system
Start by determining how many solar panels your home will need. Look at your home’s energy usage and decide how much electricity you want your panels to cover. Many opt for 100% coverage, and eliminating future electricity bills. The average U.S. home’s annual energy consumption is approximately 10,400 kWh (kilowatt-hours), so for full coverage, a similar-sized home would need between 28 and 34 250-watt panels (a popular size).
How much sunlight your area receives also affects the size system you will need. Colorado is one of the sunniest states in the union, with an average of 300 days that are at least partially sunny.
Equipment
A solar energy system requires the following equipment:
Solar panels – Monocrystalline and polycrystalline are the two types of panels to choose from. They work similarly, monocrystalline with a more streamlined appearance, higher efficiency rating, and the higher cost associated with those benefits.
Racking – Solar panels don’t get installed directly onto your roof- instead, a racking system is installed on your roof, which the panels are then installed upon. The racking system serves two functions: it places your solar panels in the way that they’ll receive maximum energy from the sun and also avoids damaging your roof. Instead of roof racking, if you are in the market for a solar carport or ground mount solar, you can find a mounting system to fit your needs.
Inverters – Solar power is received as DC current, and the inverter switches it to AC power, which most homes are wired to use.
Performance monitoring system – This allows you to monitor how effectively your system is running. Performance monitoring systems measure how much energy your system produces per hour and helps identify any issues that may come up with your solar system.
Solar batteries – Solar power storage systems let homeowners use solar energy that their homes generate when sunlight isn’t available, such as at night or on cloudy days. That way, even if your town is more overcast, you can still benefit from solar power at those less sunny times.
The Solar Installation company
With the increased popularity of solar energy, there is now a wide array of installers to choose from in most areas. Some companies charge high fees because they use only top-notch equipment, while others spend more money on advertising and promotional items, passing those costs on to the customer.
Take some time to research installers in your area. You can also check your neighborhood for solar panels and ask neighbors how happy they were with their installers. Ask multiple installers for quotes, comparing their reviews and equipment used.
Read More: The Best Solar Companies in Colorado 2023
Price of Installation Breakdown
Panels have a reputation for being the most costly part of a solar system, but they only make up about 34% of your total solar panel cost. The significant investment is actually in labor and overhead costs.
Thoroughly researching your purchase can save you up to thousands of dollars on installation costs. Large-scale companies already have a reputation, so they can charge more and not worry about competition from small-scale businesses. They also frequently charge more to cover additional marketing and overhead expenses.
CO Solar Incentives, Tax Credits, and Rebates
Utility companies in Colorado often offer their customers cash rebates for the cost of solar installation on their property. EnergySmart Colorado gives rebates worth $400 to $3,000 for solar home installations in Eagle Valley, Roaring Fork Valley, and Summit County. Holy Cross Energy offers customers a per-kilowatt (kW) rebate, offering $750 for the first 6 kW (the value decreases for larger systems). Other companies also provide rebates, so check with your local utility company to see what you may be eligible for.
If you’re in the market or have recently purchased a new home, Colorado will actually help you pay your mortgage! You are eligible for the Colorado Energy Mortgage Incentive Program if you add energy-efficient upgrades, including a renewable energy system 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.
Last but not least is the federal solar tax credit (ITC), one of the most generous incentives nationwide. With this tax credit, you will cut the amount you pay in taxes by 30 percent of your solar system’s total cost. For example, a $12,000 system will give you a $3,600 credit towards your federal taxes. However, this incentive won’t last- the credit will be phase out entirely after 2030.
Read more: Colorado Solar Incentives and Rebates
Solar Financing Options
When you pay for your solar panels upfront, this makes you the owner of your system. Owning them gives you some substantial benefits, including an increased home value. If buying your system outright isn’t an option, look into solar loans and solar leases/PPAs. Each offers $0 down, and your monthly payments will most likely be less than your current electric bill.
Other Factors that Affect the Cost
Solar power is a long-term investment, so when you look at the cost involved, think about the savings you will encounter over the next twenty years or so. Good things to consider are:
Payback period
How long it takes you to financially recover from your investment is known as the payback period. Colorado’s average payback period is 8.8-12 years. After you surpass this mark, your savings on electricity would have paid for the total cost of your system. Since solar panels often come with a 20-30 year warranty, you will likely generate clean and free electricity (other than connection fees) well after you hit the payback period.
Resident Electricity Rates in CO
Colorado residents pay an average of 9.99 cents per kilowatt-hour (kWh). This is lower than the national average of 10.48 cents per kWh, but if your solar panels cover the full electrical needs of your home, you can eliminate future electric bills. Keep the 20+ year lifespan of solar panels in mind, and you’ll see that this amounts to considerable savings over time.
Roof condition
The size and configuration of your roof will likely impact your solar installation cost. Consider how steep your roof is, if it has one or multiple levels, and if skylights or other items are installed onto your roof.
Since solar panels tend to last for 20-25 years, older roofs may need replacement before installing a solar panel system. You can likely add this expense to your solar project, possibly qualifying for incentives and rebates.
Costs by City
Costs vary based on which city or county you reside in. Park County residents pay an average of $22,243 for a 5kW system or $15,570 after applying tax credits. Residents of Broomfield County pay an average of $11,676 for the same-sized system or just $8,174 after the same tax credits are applied.
These figures are estimates, so it’s good to check with local installers and to remember that solar power systems are built to meet your finances and power needs.
Solar panel maintenance costs
Once you install a solar power system, it is usually quite self-sufficient. Minimal maintenance is required throughout the year, mainly cleaning and inspection. Regular cleaning of your system keeps it running smoothly, and an inspector will alert you if a problem arises.
The cost of professional cleaning services averages $3 – $10 per panel, or a flat rate of at least $100. Cleaning your own panels is an option- some people do- but be sure to speak with your installer before trying it yourself.
An annual inspection runs about $150 per year. During this inspection, the contractor searches for cracks or issues with the solar panel system. The price to repair a solar panel averages around $650.
Your installer will frequently offer warranties to cover your system’s performance. If damage is caused by inclement weather, your homeowner’s insurance may cover some of that expense. Be sure to ask a professional for more information, as warranties and insurance coverage vary.
Home Value Increase
In a recent study, an average home in the U.S. with solar power was found to have a 4.1% increase in value when compared with similar homes without solar panels. This estimate will likely vary, with more studies needed for a comprehensive understanding of rates nationwide. According to a recent Zillow study, no city saw a drop in property value when the owner purchased solar panels outright, but leasing may be another story.
How to Determine Your Solar Installation Costs
Solar Panel Cost Calculator
If you’re looking to estimate the cost for your specific property and solar project, Project Sunroof can be an invaluable resource. This cost calculator uses Google Earth images to view your roof’s shape and determine local weather, two significant factors in solar costs. Project Sunroof will then ask for your electric bill information to estimate how many solar panels you’d need and what the cost would be. You can then compare funding options for your project.
Conclusion
Colorado currently offers great incentives to get started, but these will only be available for a limited time. Talk with an installer in your area to see if your home is a good candidate for solar energy!
People also ask
Solar cost per watt?
The average cost for solar panels in Colorado ranges from $2.68 to $3.62 per watt. Prices will likely continue to drop, but incentives such as the ITC won’t last long.
Is solar really worth it in CO?
In short, yes. Solar power is an ever-expanding market, and Colorado’s energy companies offer generous incentives to get you started.
The high amount of sunny days means your panels will collect even more plentiful solar energy. Solar plans are highly customizable these days, so you’re likely to find one to fit your needs!
How many solar panels are needed to power a house?
This is measured by solar panel wattage, home size, average energy usage, and whether you want some or all of your electrical needs met.
If your household uses an average of 10,400 kWh of electricity per year along with the common-sized 250-watt solar panels, then an estimated 28-34 panels would fully cover your electrical needs.
How long do solar panels last?
Solar panels last for an average of 20-25 years. After this mark they may still produce electricity, but production will likely slow down. Solar panels are durable and don’t need much care- just an annual cleaning and inspection should keep them running efficiently.
Take time to research your panels’ warranties, making sure they’re well-covered for defects and environmental damage the panels may incur over the years.
Can I install my own solar panels?
Yes, but with some risks. Home solar kits cost much less than professional installation, but without comparable guarantees of quality, workmanship, and proper installation. Be sure to research how reputable the manufacturing company is.
Most installers are licensed, certified, and highly experienced with the installation process. Solar panel warranties usually cover work done by licensed professionals, but not necessarily the DIY method. A professional’s experience comes with a higher price tag, but it might pay off in the long run.
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