Solar power adoption has accelerated nationwide — and Colorado is no exception. The state already has enough solar capacity to power more than 705,000 homes, according to the Solar Energy Industries Association (SEIA).
That figure includes utility-scale solar installations, but more Colorado residents are turning to solar panels in order to save money on energy bills and lower household carbon emissions. The federal and state incentives mean that switching to solar energy has never been easier; in fact, the Inflation Reduction Act legislated a major 30% tax credit on all clean energy additions to households throughout the country.
Colorado’s local incentives also make the clean energy switch much easier for resident homeowners. Net metering allows homeowners to pull power from the grid when their solar panels don’t generate enough to power their household, and a property tax exemption means you won’t have to pay any taxes on value the solar panel system adds to your home.
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If you’re thinking about going solar in Colorado, these are the best solar installers to keep an eye on:
The best national solar companies in Colorado
According to the SEIA, 409 solar companies operate throughout Colorado, 196 of which are installers. As solar panels continue to grow in popularity, the number of solar companies in Colorado will also likely increase to meet demand.
We’ve compiled a list of solar panel companies that excel in the industry. Here are a few Colorado solar installers to consider. As with most large projects, it’s a good idea to get multiple quotes before making a decision.
Local solar installers in Colorado
How to determine which solar company is best for you
Before choosing a solar panel installation company, it’s recommended to reach out to multiple installers and get bids from them before moving forward. Consult with these installers for price options, as well as to see if they meet all of your installation needs.
In addition to affordability, important variables you may want to consider when choosing a solar installer include the company’s reputation, reviews and products and warranties they offer.
If you need additional assistance from a third party, Solar United Neighbors is a nonprofit that operates a free helpdesk for consultations.
Cost of solar panels in Colorado
Here’s a look at the average cash price for a typical solar panel system in Colorado before factoring in tax credits and incentives, according to data from FindEnergy.com.
Average cost of solar panels in Colorado
|Typical system size (kW)
|Price per watt
|Total installed cost
|Cost after 30% federal tax credit
The following infographic displays the average total price, cost per watt and system size for solar panel systems across the country, according to data from FindEnergy.com. The estimates provided are not representative of any fluctuations from tax credits or state solar incentives. If FindEnergy doesn’t have solar data for a particular state, it appears grayed out on the map.
Colorado solar panel incentives or rebates
The residential clean energy credit (formerly called the investment tax credit) is a federal solar incentive offered in every state that credits you 30% of the total cost of your solar system when you file their federal income tax. The rate increased from 26% after the Inflation Reduction Act passed in August 2022.
There is no cap on the amount of money you can claim with this credit, as long as you have enough taxable income. This means you can receive the full 30% regardless of the size or cost of your system.
To apply for the residential clean energy credit, fill out IRS form 5695 (PDF). The IRS provides detailed instructions on how to fill out the form properly. Once your application is approved, you will receive your credit when you file your federal tax return.
There are several solar tax credits and incentives available at the federal, state and local levels to make solar panels more affordable. Depending on where you live in Colorado, you may qualify for several additional solar incentives.
Colorado solar incentives
|Residential clean energy credit
|Extended through 2032 by the Inflation Reduction Act, this federal solar tax credit will reimburse you for 30% of the cost of a solar system when you file your tax return.
|Property tax exclusion
|When you add a solar panel system to your home, typically that home’s property value also increases while increasing property taxes. The property tax exclusion in Colorado will exempt you.
|Sales tax exclusion
|Residential solar panel equipment is excluded from state sales tax applying in Colorado.
|Most utilities in Colorado, such as Colorado Springs Utilities, offer a net metering program where the utility will buy back excess stored solar energy.
How to pay for solar panels in Colorado
Solar panels are a big investment. Several financing options make the upfront cost of solar more affordable. As with any major purchase, you will want to think about how to finance the cost of solar panels. Bear in mind that the money from the tax credit won’t be yours until after you’ve filed your taxes for the year the panels are installed. It’s also important to factor in the solar payback period, which is the time it takes to recoup your upfront investment and when savings begin.
Here are some ways to pay for solar panels:
Solar loan: Your solar installer likely has a relationship with a bank or other financial institution to offer a loan designed for solar panels. This can be a great deal, but you’ll want to get multiple offers to ensure the rates and terms are the best.
Lease or power purchase agreement: Some solar companies allow you to lease your system or enter a power purchase agreement. If you choose to lease, you won’t own the solar system, you’ll just pay for the use of the equipment. Entering a power purchase agreement means you’ll buy solar energy generated from the solar company to power your home. The price you’ll pay is usually lower than the retail rate from your local utility company. Note that not all incentives are available with a lease or power purchase agreement.
Cash: This approach only works if you happen to have thousands of dollars sitting around in a bank account. If you don’t have that yet, but want solar panels in the future, consider saving money in a high-yield savings account. Interest rates are high right now, and this can help you save faster.
Home equity: You don’t have to use a loan from your solar company. Financial institutions offer home equity loans and lines of credit (or HELOCs) that are commonly used for home improvement projects. These loans can be used for basically any purpose, and they may be a good fit for your solar project. Shop around and make sure you’re getting the best deal.
Personal loan: You can also borrow money through a personal loan. The main difference between a personal loan and a home equity loan is that a personal loan is typically unsecured, which means your house isn’t at risk. The downside is they tend to have shorter terms and higher interest rates than home equity products.
Installation factors to consider
Before signing a contract with a solar installer, you should consider whether solar panels are the right choice for you and your home. Here are some installation factors to consider:
Is your roof right for solar? The age, shape, size and slope of your roof impact how efficiently a solar panel system generates energy. The Department of Energy says solar panels will generate the most electricity on roofs with a slope of between 15 and 40 degrees. Older roofs or roofs in need of repairs should be maintained or replaced before solar installation occurs.
Are solar panels allowed in your neighborhood? In Colorado, homeowners’ associations aren’t allowed to ban solar panels. However, your homeowners’ association or neighborhood may have requirements or approval processes that you should consider before signing a contract.
Can you add solar panels to your insurance policy? Most standard homeowner insurance policies cover rooftop solar panels. However, you should still check with your insurance agency for the specific details of your policy.
Does your home receive enough sun? While solar panels can generate some electricity in indirect sunlight, direct sunlight of at least 4 hours per day is a general rule of thumb for when they make financial sense. In Colorado, many residents receive significant snowfall in the winter. Solar panels are designed to operate in the snow, although they will produce less power if it remains cloudy. If your roof gets consistent shade coverage, a solar panel system may not generate as much power as you’d like.
Do you rent your home? If you rent your home you may not be allowed to install solar panels. If this is the case, community solar programs are an alternative option. Community solar allows residents to subscribe to solar power produced in another location (usually somewhere nearby) and receive a credit on energy bills. The subscription rates are lower than the value of the credits, meaning you pay less than you would on normal energy bills.