Solar Tax Credits and Rebates in Colorado
Colorado is one of the sunniest states in the US, with an average of 300 days of sunshine each year. That makes it an ideal place for using solar energy. If you’ve been considering harnessing the power of this Colorado sunshine to help improve your energy independence and lower your utility bills by installing solar panels, the federal and state, and local governments are making it more affordable by offering tax credits to homeowners who invest in this equipment. These credits are easy to claim, but you have to act this year. The federal solar panel tax credit expires on December 31, 2021.
The solar investment tax credit (ITC), which was scheduled to drop from 26% to 22% in 2021, will stay at 26% for two more years. This means that all solar projects that begin construction in 2021 and 2022 will be able to receive a tax credit of 26%. All markets will drop to a 22% tax credit in 2023.
Federal Solar Investment Tax Credit
The IRS Investment Tax Credit (ITC) for solar investment offers thousands of dollars in savings when you install a solar energy system at your home. With the extended tax credit for your photovoltaic system by year-end 2032, you can claim a federal tax credit of 30% of your total solar panel system cost! This solar panel installation tax credit includes equipment and installation.
NOTE: After 2033, the credit will be permanently reduced to 26%.
Am I Eligible to Claim the Federal Solar Tax Credit?
Not every property or solar panel system qualifies for the credit. In order to claim the solar tax credit, these requirements must be met:
- The solar panels must be installed between 1/1/2006 and 12/31/2023
- The panels must be installed on your primary or secondary home (not a rental or commercial property)
- They must be installed on a property located in the United States
- The Solar PV system must be new or being used for the first time.
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.
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.
Net Metering
Net metering is a solar billing incentive that allows homeowners to benefit from every ounce of energy their solar panel system produces. Essentially, if your solar panels generate more power than you use, you’ll be credited by your utility company toward future energy bills.
How it works:
During your solar panel installation process, you can choose to have your existing meter swapped out for a net meter. Net meters run backward when your system produces more energy than your home is using — storing credits for when your home is using more energy than your solar panels are producing.
In return, a net metering policy will credit you for the extra electricity your system produces and allow you to use those credits when your system doesn’t produce enough power. These credits can be carried over month after month.
Cost of Solar Panels in Florida: How Much Are Solar Panels in Florida After the Federal Solar Tax Credit?
In Florida, electricity are high, and expensive utility bills are still a concern. Considering that there is so much free solar energy available every day, this shouldn’t be the case.
Solar energy can easily reduce those costs. And because of the many programs such as the federal solar tax credit and other state and local incentives, the cost to install solar panels has been placed within the reach of more consumers.
What may be causing you to hesitate is probably the general cost of a home solar system in the Sunshine State, 1 which currently stands at between 10,00 0 to 15,000.
In some cases, with fitting included, the top price can be double that. Now, depending on the firm, and the size of your solar system energy needs, the price per watt can change, and this can affect the value of your solar array system but is in the interest of the company to make their offer as irresistible as possible, if they want your business, that is.
With no money down and a promise of 12 months of free energy, some trustworthy local installers make the purchasing process even more tempting.
With a little bit of research, you will discover that the cost of a solar system can be further offset by a variety of financing options available through local companies and the state’s solar rebate programs.
You will find that the Database of State Incentives for Renewables Efficiency is a great resource to explore all of these opportunities, as well as your utility company’s website.
On it, there is a section that explains the benefits of their net metering program, and how it can work for you.
Essentially, the program permits subscribers to send any excess power generated by a solar energy system back to the grid in exchange for credits on their next utility bill.
It is highly recommended that you at least consider this option as the savings may well surprise you.
Florida’s utility networks and some electric cooperatives offer this benefit, and they should be explored first and foremost.
Local Solar Rebates Florida, Solar Rebates From the Government: Florida Solar Incentives
A little help can go a long way.
The federal solar investment credit automatically discounts 30% from new solar investments and there are a variety of Florida solar incentives that can help offset your installation costs even more.
These include sales and property tax exemptions and rebate programs that should be at the top of your to-do list.
Local Rebates
Many of these local incentives take the form of loans, grants, or tax credits that will apply to you, and can be claimed at the time of purchase or on your tax returns.
For example, if you are eligible for the Boynton Beach Energy Edge rebate program, a possible rebate of 450,500 can be received to go towards the expense of installing a solar system that is 5kW or larger.
Panels of these sizes generally have an efficiency output of 17.5%. Yet new technologies emerging all the time will increase the efficiency and voltage output to even higher levels, 2 which will mean more power for your home.
Other local incentives include the Ocala Utility Services program and the Palm Beach County PACE financing program. One will give you the chance to claim a 450 rebate for solar water heating, while the other the choice of whether to use a low-interest loan to cover your Florida solar bill installation costs.
Tax Credits
Florida is a great state for you to go solar for several reasons. An exemption from the state’s sales tax is a great place for you to start receiving aid with an immediate 6% saving.
On top of that the federal Solar Investment Tax Credit will apply a 30% credit to you that will cover the costs of the equipment, labor costs, and even energy storage devices like batteries; this credit comes in the form of a deduction to be claimed on your federal income tax return.
First of all, all home solar energy systems are exempt from state sales tax, saving you 6% right off the bat. The state also realizes that homes with solar energy are worth more, and exempts this value from additional property taxes.
If you are a homeowning resident in Orlando, you have the possibility to apply for a 5000,000 rebate from Orlando OUC for battery installation which has a usable capacity of 8kWh or more and also a 10-year defect warranty.
The city of Dunedin offers a similar grants program with 5000,500 up for grabs. No matter which city you live in, be sure to check with local government websites and trusted references or ask your solar installer as they keep track of all local incentives that are sometimes prone to changes, and you don’t want to miss out.
Net Metering
It is more than likely that your local area suppliers and utility grid will enable you to have access to other rebate programs. In Boynton Beach, for example, the Energy Edge rebate program offers up to 450,500 in solar incentives for homeowners who install energy-efficient improvements.
Other localities have utility-administered loans that offer low rates to encourage home solar installation.
Net metering is also an excellent option that can also boost the value of your solar equipment. This policy credits you for any excess electricity your system produces and allows you to sell any unused power back to the grid.
Many states have great net metering incentives that will significantly shorten your solar panel payback period.
Florida also recognizes that if your home has solar panels installed it will be worth more than those without, and Orlando Utilities offers a 5000,000 rebate for solar battery installations on residential properties.
If you have an account with and use one of the OUC-approved batteries with an energy capacity of 8kWh, 3 you will be eligible for this program that also has a 10-year defective warranty.
Exemptions
Depending on where you live, you may qualify for local exemptions or credits that can reduce your solar energy installation costs. For example, you as a Florida resident, can benefit from a state sales tax exemption and net metering.
In order to have control over your utility bills, net metering will enable you to send whatever excess electricity is produced by your solar panels is channeled back to the grid – and you get credited for it.
This credit can be carried over for up to 12 months before it resets on the anniversary of the annual payment cycle.
Florida Solar Panel Installation Cost (Cost of Solar Panels in Florida)
The size of your home and your electricity needs are important to determine how much you should expect your system to cost.
The larger your home, the more panels you will need to meet your yearly energy demand.
Related Reading : How Much Do Solar Panels Cost In Your State? (Hidden Fees, Tax Credits)
A larger system will also produce more energy, which results in a lower average cost per watt, which is good.
Solar panel depend on the type of cells you choose, as well as the inverter that converts the solar energy into electricity for your home.
Polycrystalline and thin-film cells are the cheapest options, while monocrystalline solar panels offer better performance and durability. 4
It can’t hurt to consider all the different types along with any additional labor fees associated with different varieties before making your final decision.
Your roof pitch and height are also significant cost factors that will impact how easy or hard it will be to install your solar panels. Typically, steeper roofs are more challenging to work on and will attract higher labor costs and require more expensive racking.
Incredibly, the price of your solar panel system can vary from city to city by as much as 20%. For example, Miami has a higher cost of living than the national average and its electricity are also higher.
Combine other expensive overheads associated with the city, and they soon all contribute to driving up the overall cost of solar panels Miami and their components.
Whether you are looking to reduce your utility bills, increase the resale value of your home or reduce your carbon footprint, going solar is an excellent option for Floridians.
The initial cost of a solar energy system can seem intimidating, but it is worth your time and energy to explore the available incentives and financing options before signing on the dotted line.
Project Sunroof
Your own personalized solar savings estimator, powered by Google Earth imagery. Approximate savings are based on national average rates, not Fort Collins Utilities rates.
Start with an Epic Homes home energy assessment. The assessment will provide a full report on your home’s efficiency and recommendations to improve it, including costs. Investing in efficiency can provide less expensive improvements and better financial returns than purchasing solar generation to offset energy bills.
Fort Collins Utilities also offers the new Epic Certificate to showcase your investments in efficiency and solar, providing a way for the real estate market to value the energy and solar PV upgrades. For the Epic Certificate to accurately reflect the homes improvements and the estimated annual energy savings from the solar PV system, the required energy assessment must be performed before the solar installation.
Sizing Your Solar PV System#
Solar PV system designers often choose a system size to meet a certain percentage of a household’s annual energy consumption. Though a solar PV system provides a portion of the energy your household consumes over the course of a year, it will sometimes produce more than needed and will produce less than needed at other times (nighttime or cloudy days). Your home will stay connected to the Fort Collins Utilities electric grid so you have reliable electricity during these fluctuations. How you select the right size for your solar PV system will be a balance of your priorities:
- Total cost budget, monthly payments and cash flow
- Goals for offsetting energy from the grid
- Available sunny space on your roof or property
Solar PV system size is limited to either 12 kilowatts or to one that produces no more than 200% of your average annual energy load (based on a 24-month period), including all dedicated generation sources. For solar systems that are not owned by the property owner, such as leased systems, maximum solar system sizing is limited to 120% of intended renewable energy offset.
If your home is new or you recently moved in, Fort Collins Utilities can provide a solar system size analysis based on other estimation methods. We also consider sizing adjustments upon request to account for significant changes to electric load, such as adding an electric vehicle.
You can share energy consumption history with solar contractors through the MyData platform or by sharing your bills.
Think Before You Cut#
While it’s important to properly manage trees to minimize shading on a solar array, Utilities does not advocate removing healthy trees to install solar. Please consult the City’s Forestry Department and work with a licensed ISA-certified arborist to ensure trees stay healthy as part of the solar installation process.
If tree work is required, the City’s Forestry Department website maintains a list of qualified, licensed arborists permitted to work in Fort Collins. Feel free to also contact the Forestry Department at forestry@fcgov.com if you have additional questions.
Trees around your home add significant value to your property and can play a very important role in reducing your energy and water consumption. Trees provide many benefits including:
- Removing carbon dioxide from the atmosphere
- Reducing energy costs (up to 50%)
- Shading
- Reducing heating costs by serving as winter wind barriers
- Reducing water usage
- Increasing your home’s property value (upwards of 20%)