Current Financial Incentives

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To spur demand for renewable energy in the state, Colorado and many of its counties have enacted a variety of incentives for residents and businesses to “go solar.” At the state and local level, you can find help through grants and rebates that can cut your initial installation costs by up to 50%.

Couple these rebates with federal incentives and you’ll find that installing solar in your home has never been more affordable.

Federal Tax Credits

Federal Tax Credits for your home system

Who is it for?

Residents in the United States

What is it about?

Under the Energy Policy Act of 2005, people who install residential solar energy systems are eligible for a federal tax credit. Taxpayers may claim a credit for 30% of expenditures for their home solar system through 2016.

Eligible expenditures include labor costs for on-site preparation, assembly and system installation, and wiring to connect the system throughout the house.

You can learn more about federal tax credits for going solar by exploring the EnergyStar website.

Business Energy Investment Tax Credit

Who is it for?

Businesses in the United States

What is it about?

Businesses who invest in renewable energy sources are also able to claim a tax credit worth 30% of total expenditures. These tax credits are available through December 2016, helping business owners access clean energy.

To learn more about how much money you could save your business, contact the U.S. Department of Energy.

State Incentives

Sales Tax Exemption for PV Systems

Who is it for?

Businesses and homeowners in Colorado

What is it about?

When buying solar modules, supporting structures, inverters, and other solar components for your commercial or residential property, you won’t need to pay sales tax. These incentives only apply to state sales tax, and not to taxes levied by towns, cities, and counties, but many towns have implemented their own exemptions for residents. Find more information on Colorado.gov.

Contact local installers to learn more about your town's or county's local incentives.

Property Tax Exemptions for Renewable Energy Systems

Who is it for?

Residents of Colorado

What is it about?

Colorado laws exempt on-site solar electric systems from property tax in residential properties. For more information, contact Ken Beazer from the Department of Local Affairs at Ken.Beazer@state.co.us

Direct Lending Revolving Loan Program

Who is it for?

Businesses and nonprofits in Colorado

What is it about?

The Colorado Energy Office provides loans to businesses or organizations that “promote energy efficiency or renewable energy.” Eligible businesses are set to receive minimum loans of $100,000 to establish large photovoltaic systems. Learn more about the Direct Lending Revolving Loan Program on the Colorado.gov website.

For more information on whether your business or non-profit is eligible, contact Colorado Energy Office Financial Manager Paul Scharfenberger - paul.scharfenberger@state.co.us.

Local Incentives

At the city and county level, Colorado offers a variety of benefits for solar panel owners. Some of these include:

Boulder Solar Grant Program

Who is it for?

Residents and non-profit organizations of Boulder County

What is it about?

If you live in a home funded through the affordable housing program in Boulder, or one owned and operated by a nonprofit, you’re eligible for a grant to help pay for your solar system installation.

While there is no maximum grant limit, the city typically limits the amount of tax credits and incentives to 50% of the total project cost. According to the City of Boulder website, recent grants for residential buildings have ranged from $1,600 to $30,000.

If you’re interested in learning more about the two grant programs, explore the following applications.

Nonprofit Owned Low-to-moderate Income Housing

Homeowners in the Affordable Housing Program

Boulder Solar Rebate Program

Who is it for?

Residents and businesses in Boulder County

What is it about?

The City of Boulder offers residents who install solar electric or thermal systems a sales and use tax rebate of 15%. For a 4.5 kW system, the average rebate calculates to $140. You can learn more about applying for the rebate by filling out the application. Learn more about the specifics of the Solar Rebate Program on the City of Boulder's website.

If you have questions about the application process, you can contact Debbie Fox at the Boulder Local Environmental Action Division. (oxd@bouldercolorado.gov)

Elevations Energy Loan Program

Who is it for?

Residential and commercial solar panel buyers in Boulder and Denver

What is it about?

Elevations Credit Union offers residents and businesses of Boulder and Denver counties low-interest loans for solar panels and other renewable energy upgrades. By enrolling in the energy loan program, you’re also assigned an energy adviser who can review bids from installers and help you access local rebates and other incentives.

Minimum loan amounts for residents start at $500, and can reach up to $25,000. Commercial businesses can obtain loans for as much as $150,000 for large scale projects. If you’re interested in learning more about how Elevations Credit Union can help finance your green upgrades, contact them at (800) 429-7626 or explore the Elevations Energy website.

EnergySmart Energy Efficiency Rebate

Who is it for?

Businesses in Boulder County

What is it about?

In Boulder County, EnergySmart helps businesses access local rebates after installing photovoltaic panels. As of late 2012, EnergySmart has served 2,552 businesses and distributed $1,307,920 in rebates for renewable and energy efficient commercial upgrades.

To learn how much of a rebate you could earn for your business, contact an Energy Adviser at 303.441.1300 or explore the Boulder EnergySmart website.

Roaring Fork Valley Renewable Rebate

Who is it for?

Residents and businesses of Western Colorado

What is it about?

Residents and businesses of Snowmass Village, Pitkin County, the town of Basalt, Glenwood Springs, Carbondale, and Aspen can receive solar rebates through the Community Office of Resource Efficiency (CORE).

At your home or business, you can receive $0.50 per annual kWh production, for a maximum incentive of $3,000. You can learn more about requirements and the application process by visiting the CORE website.

Fort Collins Utilities Financing Program

Who is it for?

Residents of Fort Collins

What is it about?

In Northern Colorado, residents can receive loans for solar panel installations if they are Fort Collins Utilities customers. Loans typically range from $1,000 to $15,000 and can cover up to 100% of the cost of a project.

For more information, contact Fort Collins Utilities at powertosave@fcgov.com or explore the City of Fort Collins' website.

Utility-Specific Rebate Programs

Many utilities companies in Colorado offer programs that reward customers for going solar. These include:

Black Hills Energy Rebate Program

Who is it for?

Residents and businesses of southern Colorado who receive electricity from Black Hills Energy

What is it about?

Customers of Black Hills Energy can obtain an instant rebate for installing solar electric systems in their homes or businesses. Those who install systems less than or equal to 3 kW can receive an upfront $1 per DC watt rebate, in addition to performance-based payments of $0.0945 per kilowatt-hour for the first nine years.

The Black Hills Energy rebate program is currently on hold, but is expected to resume in the future. For more information, explore the Black Hills Energy website.

Colorado Springs Utilities – Energy Rebate

Who is it for?

Residents and businesses who receive electricity from Colorado Springs Utilities

What is it about?

Colorado Springs Utilities encourages its customers to install solar panels on their homes and businesses with a $1.50 per watt rebate. Residential solar installers can receive a maximum rebate of $15,000, while businesses can receive up to $37,500.

Depending on the price of installation, 40 to 60 percent of the total cost could be covered with a combination of federal tax credits and the CSU rebate. To learn more about the CSU rebate program, contact CSU representative Deborah Mathis (dmathis@csu.org), or explore the Colorado Springs Utilities website.

Holy Cross Energy – Renewable Rebate

Who is it for?

Residents and businesses who receive electricity from Holy Cross Energy

What is it about?

Holy Cross Energy will pay up to $1.50 per watt of installed solar panels, up to $9,000 per system. This maximum payment must not exceed 50% of the total cost of the installation.

You can apply for the program with this form. If you have additional questions, you may contact Holy Cross Energy representative Stephen Casey at scasey@holycross.com or explore the Holy Cross Energy website.

La Plata Electric Assn. – Renewable Rebate

Who is it for?

Residents and businesses receiving electricity from the La Plata Electric Association

What is it about?

Customers who receive power through the La Plata Electric Association may obtain either a one-time upfront rebate for their solar electric systems or a performance-based rebate over time based on their systems.

Depending on the size of their systems, customers can earn $0.40 per watt incentive for systems under 10 kW. For larger systems, customers earn $44.91/megawatt-hour paid every six months.

For more information on solar incentives, contact La Plata Electric Association representative Richard Archuleta at rarchuleta@lpea.coop or explore the LPEA website.

Poudre Valley REA – Photovoltaic Rebate

Who is it for?

Residents who obtain energy from the Poudre Valley Rural Electric Association

What is it about?

If you receive energy from the Poudre Valley Rural Electric Association, you may receive a solar rebate of up to $1.50 per watt up to a maximum of $4,500.

The REA notes that demand is particularly high, and customers should apply as quickly as possible if they hope to receive a rebate. You must contact the REA before construction begins, allowing them to define the construction window and terms of the rebate reward.

For more information on REA’s rebate program, contact the proper representatives at mdaily@pvrea.com or explore the Poudre Valley REA website.

San Miguel Power Assn. – Energy Rebate

Who is it for?

Residents and businesses who obtain energy from the San Miguel Power Association

What is it about?

For installing a grid-connected solar system as a SMPA residential customer, you can receive a rebate of $1.00 per watt, up to $3,000 or 50% of the cost of installation. This limit is raised even higher for commercial businesses, which can obtain a maximum of $10,000.

You can fill out applications via the SMPA website, or contact Brad Zoporski at brad@smpa.com.

United Power – Energy Rebate

Who is it for?

Residents and businesses served by United Power

What is it about?

Residents and businesses that receive energy from United Power are eligible to receive solar rebates for installing panels at their home. United Power offers customers $.60 per watt back of their system installation fee, providing more incentives to use renewable energy.

This incentive reaches up to $1,800 per customer, supplementing tax credits and other rebate programs you may access at the state and local level. Apply for this rebate with this form. Learn more about this rebate from your local solar installers.

Xcel Energy Solar*Rewards Program

Who is it for?

Commercial and residential solar panel buyers who obtain electricity from Xcel Energy

What is it about?

Xcel Energy provides electricity for up to 40% of Colorado residents, and offers a rewards program for those who install grid-connected photovoltaic systems on their homes.

Customers who generate electricity through solar power earn Renewable Energy Certificates over time that are based on the size of the system and how much power it generates. As you accrue Renewable Energy Certificates, you can sell them back to Xcel. Even with a smaller 0.5 kW system you can earn $0.11 per kilowatt-hour for the first 10 years of production.

For more information on the rewards program, contact Julia Woodson at solarprogram@xcelenergy.com or explore the XCEL website.

Colorado Net Metering

For many consumers, the idea of creating enough energy to sell back to the utilities companies is a dream come true. Unfortunately, in many states, this process known as “net metering” is limited, and doesn’t provide a huge incentive for many people.

However, Colorado is rated one of the best states in the country for net metering, receiving an “A” rating from “Freeing the Grid,” a policy guide that tracks net metering legislation in the United States.

On a sunny day when you’re using little to no power in your house, you might go outside to see your electrical meter literally running backwards. This is because you’re generating more electricity than you’re using – electricity that is banked onto the grid in the form of kilowatt-hour (kWh) credits.

During periods when you pull power from the grid, that power is actually deducted from the credits you’ve accrued. This means that at the end of the month, any power you took from the grid is offset by the credits you’ve earned – lowering and sometimes even completely negating your bill for that month.

In Colorado, at the end of a 12-month period, if the energy you’ve generated exceeded your annual use, you can actually sell that energy to the utility company at a cost slightly lower than the retail value for the prior year.

Net metering does have limits – in Colorado, solar systems can only generate 120% of your annual energy needs for you to be eligible for net metering. This is to prevent consumers from installing oversized systems that take advantage of net metering policy.

What is a Renewable Energy Certificate (REC)?

Xcel Energy, one of the largest Investor-Owned Utility (IOU) companies in Colorado, offers incentives based on Renewable Energy Certificates (RECs) their customers earn by generating electricity.

A renewable energy certificate, also called renewable energy credit, is essentially a form of currency that takes into account the non-tangible aspects of renewable electricity. Based on federal and state law, a REC is composed of both the actual electricity, plus its green attributes, such as greenhouse gas emission offsets.

What does an REC tell you?

As companies seek to increase the amount of renewable energy they provide, RECs will become a hotly traded commodity in the future. While RECs might seem like a made-up and unnecessary creation, they actually provide important information about the energy you use, such as:

  • The type of renewable resource producing the energy
  • The date it was created
  • The date the generator, like a solar panel, was first set up (known as vintage)
  • The location of the generator
  • How much greenhouse gas the energy offsets

Each REC is created as the result of generating one megawatt-hour of electricity from renewable sources. These credits are growing in importance as regulations increase the amount of renewable energy utility companies must provide to customers. Essentially, utilities use RECs to prove that renewable energy sold to individuals or businesses came from a renewable source.

In Colorado, Investor-Owned Utilities like Xcel Energy must generate or purchase 10% of their electricity from renewable energy sources. This number is set to increase to 15% by 2015, and further to 30% in 2020.

In order to reach this goal, more utilities companies are looking to buy RECs from independent energy creators. For example, under the current Xcel Energy Rebate program, consumers enter into an up to 20-year contract to sell the REC’s they generate to Xcel energy, helping Xcel reach their required renewable energy goals.

In return, they are paid for the sale of the REC – earning $.11 per kWh of energy they sell to Xcel Energy.

Future Innovations in Solar Financing

In Europe, particularly Germany, massive growth in solar energy use has been linked to their policy of feed-in tariffs – a financial incentive designed to encourage the installation and use of renewable energy.

Feed-in tariff policies are somewhat similar to net metering policies, in that they allow renewable energy generators to earn money for their solar output. However, while net metering helps offset your energy bill, feed-in tariffs actually allow you to enter into contracts with utility companies who are obligated to buy all of the energy you create.

Under a feed-in tariff program, you receive a guaranteed payment from the utility for your energy production. Instead of simply offsetting your own energy use, you must sell all generated energy to the utility company. In the contract, the utility company is obligated to purchase all generated energy, while you’re obligated to sell all of the energy generated.

In Germany, feed-in tariff programs have driven the renewable energy industry toward a boom. Since introducing the program in 1991, renewable energy jumped from 5% to over 20% in 2011.

Over 63 countries, states, and provinces have created feed-in tariff programs, but the idea hasn’t caught on as strongly in North America. Some states have proposed their own programs, but many are currently stalled.

To get an idea of how much money you could earn through a feed-in tariff program, consider California, which has explored the concept. In the state’s research, the California Public Utilities Commission estimated starting prices for energy at $89.23 per megawatt hour.

As more states look toward new ways of generating interest in solar energy, feed-in tariff programs will continue to be considered. Most recently, in 2011, Colorado representatives introduced bills that would prompt the study of a feed-in tariff program in the state. Unfortunately, these bills did not pass, currently stalling the effort in the state.