Is the State of Colorado Paying for Solar Panels?
“Free solar panels” is a topic that is on the minds of a lot of Colorado homeowners. This is partly because of the massive number of ads promoting programs that supposedly provide solar panel systems at no cost.
As we’ve discussed before, there is no such thing as free solar panels. The federal government will not pay you to install solar panels, and neither will the State of Colorado.
But there are still a number of reasons to go solar in Colorado, as well as multiple options for reducing the cost. Call REenergizeCO at (303) 227-1000 (Denver) or (970) 323-3191 (Fort Collins), or keep reading for more information.
Will Colorado Pay for Solar Panels?
The State of Colorado will not “pay you” to install solar panels. And, to be clear, this has never been the case. There is and never was any kind of program in Colorado providing cash payments to those who installed solar panels on their homes.
However, Colorado has instituted a number of incentives to encourage solar panel usage through consumer savings. This includes:
- Sales Tax Exemptions and Deductions: Certain components of solar panel systems are exempt from the state’s sales and use taxes, resulting in a lower upfront cost.
- Property Tax Exemption: According to Colorado Revised Statutes § 39-3-102, solar energy systems are exempt from Colorado’s property tax. This means you can improve the value of your home by installing solar panels without having to worry about a higher property tax bill.
Colorado does not offer a tax credit on solar panels. However, Colorado homeowners can still take advantage of the federal Investment Tax Credit on solar power systems. If you install solar panels in 2022, you will get a tax break of 26% on the cost of the system on next year’s taxes.
So, the question is not “does Colorado pay for solar panels,” because the answer is “No.” The more appropriate question is, “How much can I save with solar panels in Colorado?”
Do Utility Companies Pay You to Go Solar in Colorado?
One of the secrets to the tremendous growth of solar energy in Colorado is the widespread support for solar among local utilities. Many of the improvements in affordability for solar panels and their components can be traced to the incentives offered by local electric companies.
Customers of Xcel Energy, for example, have multiple benefits when they install solar panels. This includes net metering (where your utility bills are credited for the solar-generated electricity you don’t use) and monthly payments through Solar Rewards®.
Homeowners outside the Denver Metro also have access to options that make solar panels more affordable. For example, the City of Fort Collins offers a $1,000 rebate when you install a residential solar energy system.
Will Solar Manufacturers Pay You to Use Solar Panels?
Finally, it is important to be aware of incentives offered by the companies that make solar panels. Many different manufacturers provide rebates on their products. You can claim your rebate by contacting the manufacturer directly or by applying through the installer.
Be sure to ask about rebates when you are shopping for solar companies. Reputable installers will tell you about any available discounts, rebates, and other incentives, as well as assist you with applying for them.
How Do I Pay for Solar Panels?
Although there are truly no “free” solar panels, there are a number of options that can save you money on solar. There are also two different payment options on your system:
- Buying the solar panel system upfront
- Entering a solar lease or power purchase agreement (PPA)
Solar leases and power purchase agreements are financing options that require “no money down.” (These are really what’s being offered with those ads for “free solar panels.”) Far from being free, homeowners who lease their solar panels or opt for a PPA have to pay every month for the privilege to use the system.
Read More: How Much Are Solar Panels in Colorado?
Homeowners who sign up for solar leases and PPAs don’t always know what they’re getting. For example, it is difficult to know what the capacity of the system is or whether it meets the qualifications for various incentives. Furthermore, lending companies don’t always tell customers upfront that the lease or PPA includes a clause that, over time, increases what you pay each month.
With all of this in mind, we generally recommend paying for the solar panels upfront if you can. This might be hard on the pocket book at first, but owning your solar energy system outright will save you money and cause far less aggravation in the long run.
NOTE: REenergizeCO does not offer PPA agreements on our systems. Customers have the option to buy the solar system outright, or take out a loan from the Colorado Clean Energy Fund.
Get Straight Answers About Solar Panels
REenergizeCO has handled hundreds of solar installations throughout the Colorado Front Range. We are always honest with our customers, providing transparent upfront pricing and detailed recommendations for optimizing the energy efficiency of your home.
Our team handles all aspects of designing, installing, and activating solar panels. We also walk you through the myriad incentives that help offset the cost of a residential solar energy system.