Colorado Solar Panel Tax Credits, Rebates, & More

Using solar energy has many benefits, from reducing your monthly power bill to increasing the value of your home. Best of all, going solar is less expensive than ever, especially if you live in Colorado. You may qualify for a variety of state-specific solar and battery rebates, including the Xcel Battery Rebate or the Colorado State Tax Credit.

Before you purchase solar panels, it’s important to understand what credits, rebates, and discounts are available. We created this guide to provide more information about these savings options:

• Federal Solar Investment Tax Credit (ITC)
• Colorado Solar and Battery Rebates
• Other Ways to Save

Federal Solar Investment Tax Credit (ITC)

The ITC is one of the biggest tax incentives available to help consumers switch to solar power. From now until 2032, you can get a 30% credit on your federal tax return if you purchase a home solar system. You won’t get the 30% credit in cash, but you can use it to reduce the amount of federal tax you owe.

Assume you purchase a home solar system for $21,000. If you qualify for the ITC, you can apply $6,300 as a credit on your tax return. Time is of the essence, as the credit drops to 26% in 2033. After that, you won’t be able to use the ITC at all. That makes now the best time to take advantage of the many benefits of switching to solar energy.

Colorado Solar and Battery Rebates

Colorado residents have access to several solar and battery rebates.

Xcel Battery Rebate

Xcel offers two financial incentives for customers in Colorado. The first one is for joining its virtual power plan, which makes you eligible for a rebate of $100 per month for up to 5 years. If you install a Powerwall, you may qualify for a one-time rebate of $2,500.

Denver CARes (Denver Climate Action Rebates)

This rebate is eligible for Xcel customers who reside in the city of Denver. Work must have been completed between January 1, 2023 and December 31, 2023. We will provide information on the 2024 program when it becomes available. 

Colorado State Tax Credit

Another option for reducing the cost of a Powerwall is to take advantage of the Colorado State Tax Credit. This gives you a 10% tax credit on all eligible equipment.

Energy Smart Colorado

Depending on your home’s location, you may qualify for a solar rebate 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 for their solar and battery installation.

Black Hills Energy

To encourage consumers to switch to electric vehicles, Black Hills Energy launched its Ready EV program. As part of this program, you may qualify for a $500 rebate for installing an EV charger at home.

Whether you need us to install a Powerwall or a set of solar panels, Photon Brothers is pleased to offer 100% satisfaction guaranteed. We also have a dedicated service department, ensuring you can get expert solar advice whenever needed.

Other Ways to Save

Even if you don’t qualify for government credits or rebates available through local utility providers, there are still a few ways to save money when you switch to solar.

Colorado State Sales Tax Exemption

Colorado requires merchants to charge sales tax on many goods and services. Fortunately, the components of residential solar systems are exempt from these taxes. This includes rotors, blades, solar modules, and turbine generators. Note that this only applies to state tax. It doesn’t eliminate sales taxes levied by cities, counties, and towns.

Net Metering

Depending on where you live and what type of system you have, your solar system may be capable of producing more power than you need. If that’s the case, you can have a net meter installed. Any time your system produces more energy than you’re using, the net meter runs backward, allowing you to build up credits that you can use to reduce your energy costs.