Solar Incentives in Colorado (2026)
Colorado homeowners pay an average of $0.14/kWh for electricity. With the right incentives, solar can offset a significant portion of that cost. Below are the 3 active programs available in Coloradoas of February 2026.
Federal ITC Update: The federal residential solar tax credit (Section 25D) expired December 31, 2025 per the One Big Beautiful Bill Act (Public Law 119-21). The commercial ITC (Section 48E) remains active at 30% for systems under 1 MW through 2032. State and utility programs listed below remain in effect.
Active Incentive Programs
| Program | Type | Authority | Amount | Description |
|---|---|---|---|---|
| Net Metering | Xcel Energy / Colorado Public Utilities Commission Utility | Full retail rate credit for excess generation in Xcel territory. | Xcel Energy offers net metering at full retail rate for residential solar. Credits roll over month to month. Other utilities may have different policies. Xcel Energy residential customers in Colorado. Systems up to 120% of annual usage. | |
| Property Tax Exemption | Colorado Department of Revenue State | Solar system value excluded from property tax assessment | The added value of residential solar installations is excluded from property tax assessment in Colorado. All residential solar installations in Colorado. | |
| Battery Storage | Colorado Department of Revenue State | 10% of battery hardware cost, max $5,000. Equipment only, not installation labor. | State income tax credit for residential battery storage. Must be purchased by Dec 31, 2025 (may be installed in 2026). Cannot carry forward unused credit. Colorado residents who install qualifying energy storage systems. Renters eligible with owner approval. | |
| Community Solar | Colorado Public Utilities Commission State | Bill credits based on share of community solar garden output. Typically 5-15% savings. | Colorado was a pioneer in community solar. Renters and homeowners who cannot install rooftop solar can subscribe to a community solar garden and receive bill credits. Xcel Energy customers. Available to renters, homeowners, and businesses. |
Data sourced from DSIRE, EnergySage, and state energy offices. Last verified February 2026. Verify all programs directly with the administering authority.
Get a ZIP-Specific Incentive Report
Programs vary by utility and municipality within Colorado. Enter your ZIP code to see exactly which incentives apply to your address.
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Open ROI CalculatorFrequently Asked Questions
Does Colorado have a solar tax credit in 2026?
Colorado does not currently have a state-level solar income tax credit, but there are other incentives available such as net metering, property tax exemptions, and utility rebates. The federal residential ITC (Section 25D) expired December 31, 2025.
What is the average electricity rate in Colorado?
The average residential electricity rate in Colorado is approximately $0.14/kWh as of 2026. Higher utility rates generally improve solar ROI.
Does Colorado have net metering?
Yes. Colorado has a net metering or net billing policy that credits solar owners for excess electricity exported to the grid. See the incentives table above for current rates and program details.
Is solar equipment exempt from sales tax in Colorado?
Colorado does not currently offer a statewide sales tax exemption for solar equipment.
Does going solar increase property taxes in Colorado?
No. Colorado offers a property tax exemption for solar energy systems, meaning the added home value from solar is not included in your property tax assessment.
Did the federal solar tax credit expire?
Yes. The federal residential solar tax credit (Section 25D) expired December 31, 2025 per the One Big Beautiful Bill Act (Public Law 119-21). The commercial ITC (Section 48E) remains active at 30% for systems under 1 MW through 2032.