Colorado Solar Incentives
With the latest advancements in solar technology, more affordable solar system prices, and attractive new incentives, there’s never been a better time to capitalize on Colorado’s solar potential. We’ve compiled some of the most beneficial solar incentives available to Colorado homeowners below.
From now until 2032, the federal government is offering a 30% investment tax credit against the total cost of a home solar system. It’s one of the best incentives the federal government has ever offered in way of a solar tax credit.
How it works:
If you buy your solar system outright, you can apply 30% of the total cost of your solar system installation to your tax liability for the year.
For example, if you purchase a solar panel system that’s worth 20,000, you can get a credit of 6,000 on your federal taxes.
Illinois Solar Program
Keep in mind, this is not a cash rebate — it’s a tax credit.
Starting in 2033, the value of the tax credit will lower to 26%. After 2034, the tax credit for residential solar systems will end.
Local Solar Battery Rebates
In Colorado, some utility companies and other local organizations offer cash rebates to homeowners who install solar systems on their property.
- Xcel Battery Rebate: Xcel Energy is offering a 5000,500 rebate per Powerwall plus 100/year (up to five years) for opting into their virtual power plan. This is in addition to the 30% federal tax credit.
- Tesla Powerwall Rebate: To celebrate the global milestone of 500,000 Powerwalls installed, Tesla is offering a 500 rebate on any Powerwall 2 or Powerwall commissioned through October 31, 2023. To get the rebate, the customer will submit directly within the Tesla app once their battery is commissioned and monitoring is set up. This rebate is direct from Tesla and is handled within the Tesla App during the rebate period.
- Colorado State Tax Credit: Colorado is offering a 10% tax credit available on eligible Powerwall equipment. This tax credit is available through the DR-1307 form.
- Energy Smart Colorado: Depending on your home’s location, they offer rebates for solar installations ranging from 400 to 3,000.
- Holy Cross Energy: To reduce the cost of solar system installations, Holy Cross offers customers a per-kilowatt (kW) rebate of 750 for the first 6 kW. Homeowners with an average 6 kW system can save up to 4,500 on installation costs.
- Black Hills Energy: As part of their “ Ready EV” program, Black Hills Energy is now offering a 500 credit towards electric vehicle chargers for your home or business. See their website for more details.
- Speak with one of our solar professionals at (720) 370‑3344 to learn more about available solar rebates in your area.
Colorado State Sales Tax Exemption
With Colorado’s sales tax exemption, homeowners who install solar energy systems are not taxed on their system components, which can save hundreds of dollars.
How it works:
Residential solar power system components are not taxed in Colorado. The exemption only applies to sales and use taxes imposed by the states, not those imposed by incorporated towns, cities and counties.
Some of the eligible components include:
- Turbine generators
- Rotors and blades
- Solar modules and trackers
- Supporting structures or racks
- Inverters
- Balance of system components
- …and more
Some of the ineligible components include:
- Step-transformers at the production site
- Energy storage
- Remote monitoring systems
Note: The sales tax exemption does not include labor.
What is the federal solar tax credit?
The residential clean energy credit itself isn’t totally new. Previously called the investment tax credit, it’s been around for years but was expanded significantly under the Inflation Reduction Act.
It actually had been scaling down prior to the passing of the IRA, said Gilbert Michaud, an assistant professor in the School of Environmental Sustainability at Loyola University Chicago. As part of the Inflation Reduction Act, they just said, ‘We’re going to mitigate all the risk and the changes and uncertainty’ and bump it back up.
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The credit now covers up to 30% of the cost of new, qualified clean energy improvements in your home, made between now and 2033. That includes projects like solar, but also water heaters, wind turbines, geothermal heat pumps, fuel cells and battery storage technology.
How does the federal solar tax credit work?
This federal incentive, while generous, won’t come directly in the form of cash in your Instead, it’ll reduce the amount of money you pay in federal taxes.
For example, if you installed a 15,000 solar array, you’d qualify for a federal tax credit of 4,500. That means your tax bill in the following year would be lowered by 4,500. (This is different from a typical tax deduction, which lowers your total taxable income and could result in a reduction in your tax bill as well.)
If the credit you’re eligible for is more than the amount you owe in taxes to begin with, you can carry forward any excess unused credit. and apply it to reduce the tax you owe in future years, according to the IRS.
What is covered by the solar tax credit?
The residential clean energy credit covers a broad array of home energy improvements. When it comes to solar, the credit covers:
- The expense of the actual solar panels and related hardware.
- The cost of labor for installation and assembly.
- Any electrical work required to connect the solar array to your home.
- Any soft costs, like permitting fees.
It’s basically an all-in.- ‘How much did you spend to put this on your roof?’ Michaud said.
The Solar Tax Credit Explained [2022]
Other roofing costs, like new support beams or shingles, aren’t covered by the solar tax credit.
How Much Are Solar Panels in Illinois? Cost of Solar Panels in Illinois
The first item up for discussion is the cost of solar panels in Illinois because you will have to pay for it in one way or another. 8 So how deep in your s do you have to go to be called a solar panel owner?
What you need to buy the equipment and have it installed in your home can be anything between 13,000 to 17,595, but on average, 15,300 will do.
What this means is that you will have to have about 3.06 for every watt you install. Note that these are only general numbers and that you can easily spend less if you factor in the size of the system, the quality of the equipment, and several other factors.
But still, remember that the same way that the price can go down is the same way that it can escalate; it all depends on what you are really going for.
The general rule of thumb when it comes to all matters concerning the cost of solar panels in Illinois is that the more you need, the more you will spend. If you usually expect a giant energy bill at the end of the month, it only makes sense that you will find yourself spending more to install the panels.
Factors Affecting the Cost of Solar Panels in Illinois
You are thinking it and probably so is any other prospective solar panel buyer, why are solar panels so expensive?
Look at it this way, it may cost a lot of money upfront, but imagine how much you will save in the long run.
10 or 15 years down the line, you will thank yourself for making the decision when everybody else may be complaining about high utility costs and the solar panels are even more expensive by that time.
The good news is that the cost can go down if you play your cards right and consider the following factors:
The Size of the System
This has got to be one of the most important determinants of how much your installation will cost you. Simply put, the bigger you go, the higher the cost of solar panels in Illinois.
If your energy needs are higher, it will basically mean that you will need more panels and a generally more intricate system and no doubt pay more.
Solar Panel Quality
Next up, and something you should never take for granted is the quality of the product. 4 With a myriad of solar companies in Illinois.
You don’t want to fall prey to cheap, ineffective products. Yes, they will cost less, but what if they break down in a few years and you have to replace them?
The Solar Companies Doing the Job
Each solar company has specific products and there is no way that you will find identical versions. 9 Each comes with its own price tag and it is solely upon you to sift out the panels and equipment to find out which one of them you will go for.
Here is where you will save some or lose some, it all depends on your choice.
The Type of Installation
You should know that there are various ways to install solar panels, it can either be on the roof (the most obvious), on the ground, or on a carport.
Attaching on the roof is the simplest and cheapest way to go, but what if your roof cannot support the panels? You will have to resort to ground mounting, which will unfortunately cost you more.
The Type of Roof
Another aspect that many new customers tend to ignore is their roof type. You would think that it doesn’t matter but it is crucial, depending on the material because it is the one to determine how the racking process will go.
All those who know how to install solar panels on roof will tell you that there is a lot more to it. If you have a special roof, sadly, you will have to pay more for special equipment to effectively anchor the panels.
Solar Panel Cost Calculator Illinois: How Does It Work?
Cost calculators are secret weapons to help you estimate the cost of solar panels in Illinois even before going to an installer for a quotation. It feels great knowing what your budget should look like because it kind of gives you bargaining power and ultimately an upper hand when it comes to negotiations.
So how does the cost calculator work? Pretty simple.
All it expects from you is to insert accurate details about your address, the size of the installation that you expect (the modules multiplied by their size in watts), how much energy you use, and several other concerns based on how the software is designed.
With as little as a single click, you can receive an estimate, after which you can be able to tell whether you can afford it or not. But remember this, the results from the calculations should not be taken as is, at least not always.
The real figures are with your installer and the wisest thing is to still obtain their quotes regardless of the results.
How much is the Tax Credit worth?
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3- Solar Energy Sales Tax Exemption
New Jersey offers a full exemption from the state’s sales tax (currently 7%) for all solar energy equipment. This exemption is available to all taxpayers. All major types solar energy equipment, including equipment for passive solar design, are considered eligible for the exemption as described by the New Jersey Division of Taxation Publication SU-6 (Sales Tax Exemption Administration). According to SU-6, the exemption includes all solar energy devices or systems specifically approved by the Board of Public Utilities, Division of Energy and designed to provide heating or cooling or electrical or mechanical power by converting solar energy to some other usable energy source, including devices for storing solar-generated energy. The exemption does not apply to devices that would be required regardless of the energy source being utilized. In order to claim the exemption, the purchaser must fill out and submit Form ST-4 (Exempt Use Certificate) to the seller instead of paying sales tax. Rear Here.
4- Property Tax Exemption for Renewable Energy Systems
In October 2008, New Jersey enacted legislation exempting renewable energy systems used to meet on-site electricity, heating, cooling, or general energy needs from local property taxes. (There is not a state component to property taxes in New Jersey). Eligible renewable energy systems include solar PV, wind, fuel cells, sustainable biomass, geothermal electric, landfill gas, hydroelectric, resource recovery, wave, and tidal systems that produce electricity. Systems that produce energy from solar thermal energy (e.g., solar hot water) or geothermal energy (e.g., geothermal heat pumps) are also eligible for the exemption. The exemption may be claimed for all qualified systems installed on residential, commercial, industrial, or mixed use buildings as accessory uses.