Solar power has grown nationwide, including in Colorado. The state has enough solar capacity to power more than 515,000 homes, according to the Solar Energy Industries Association.
That figure includes utility-scale solar installations, but more Colorado residents are turning to solar panels too, for saving money on energy bills and lowering household carbon emissions.
While traditional energy rates have gone up in recent years, the cost of solar
panels
has decreased substantially. Solar panel costs have fallen 52% in the last 10 years, according to the Solar Energy Industries Association. There are also a growing number of tax credits and rebates to help bring down the cost of a solar panel
system
further.
Here’s a look at what you should know if you’re thinking about going solar in Colorado.
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Average cost of solar panels in Colorado
Here’s a look at the average cash price for a 5-kilowatt system before factoring in tax credits and incentives, according to data from FindEnergy.com.
Colorado solar panel costs
| System size (kW) | Price per watt | Total cost |
|---|---|---|
| 5 | $3.98 | $19,900 |
The best national solar companies in Colorado
According to the Solar Energy Industries Association, 388 solar companies operate throughout Colorado, 186 of which are installers. As solar panels continue to grow in popularity, the number of solar companies in Colorado will also likely increase to meet demand.
We’ve compiled a
list
of solar panel companies that excel in the industry. Here are a few Colorado solar installers to consider. As with most large projects, it’s a good idea to get multiple quotes before making a decision.
ADT Solar
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ADT Solar (formerly Sunpro Solar) provides solar and battery installation services in Colorado. ADT Solar provides 25-year labor, power production and manufacturer warranties — as long as solar warranties come — and offers a price-match guarantee on installation costs.
Currently, ADT Solar only offers solar panel systems for purchase and does not offer solar leases or power purchase agreements. It partners with top-tier solar manufacturers to provide high-quality products from Enphase, Tesla and others.
Palmetto Solar has become one of the largest solar companies in the nation since it was founded in 2010. It offers solar panel systems for purchase, solar leases and power purchase agreements. Most of Palmetto’s customers buy their solar panels outright because of the benefits of owning the system.
Palmetto Solar’s panels have an efficiency rating above 19.8% and come with a minimum 12-year product and 25-year performance warranties. Palmetto says it is committed to providing the best customer service in the industry. It offers a subscription service called Palmetto Protect, which monitors how a solar panel system is performing. The subscription also provides tiered levels of support in the event the panels are damaged or fail.
SunPower has the best solar panels on the market, with the highest efficiency available right now for residential panels. That’s a huge plus. The company also offers very strong warranties.
As for downsides, SunPower only offers one type of battery and doesn’t have a price-matching policy. The lack of price matching is significant here: SunPower has excellent hardware, but it comes at a steep price.
Tesla Solar
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One of the most well-known names in the solar industry, Tesla installs a lot of solar panels all over the country. In addition, the company offers some of the most affordable panels nationwide. Tesla also offers a price match and a solid choice of battery: the Tesla Powerwall.
Tesla’s biggest weakness is its customer service. Anecdotally, the company has a reputation for bad customer experiences.
Colorado solar panel incentives or rebates
The residential clean energy credit (formerly called the investment tax credit) is a federal solar incentive offered in every state that credits you 30% of the total cost of your solar system when you file their federal income tax. The rate increased from 26% after the Inflation Reduction Act passed in August 2022.
There is no cap on the amount you can claim with this credit, so you can receive the full 30% regardless of the size or cost of your system.
To apply for the residential clean energy credit, fill out IRS form 5695 (PDF). The IRS provides detailed instructions on how to fill out the form properly. Once your application is approved, you will receive your credit when you file your federal tax return.
There are several solar tax credits and incentives available at the federal, state and local levels to make solar panels more affordable. Depending on where you live in Colorado, you may qualify for several additional solar incentives.
|
Incentive program |
Description |
|
Residential clean energy credit |
Extended through 2032 by the Inflation Reduction Act, this federal tax credit will reimburse you for 30% of the cost of a solar system when you file your tax return. |
|
Property tax exclusion |
When you add a solar panel system to your home, typically that home’s property value also increases while increasing property taxes. The property tax exclusion in Colorado will exempt you. |
|
Sales tax exclusion |
Residential solar panel equipment is excluded from state sales tax applying in Colorado. |
|
Net metering |
Most utilities in Colorado, such as Colorado Springs Utilities, offer a net metering program where the utility will buy back excess stored solar energy |
How to pay for solar panels in Colorado
Solar panels are a big investment. Several financing options make the upfront cost of solar more affordable. As with any major purchase, you will want to think about how to finance the cost of solar panels. Bear in mind that the
money
from the tax credit won’t be yours until after you’ve filed your taxes for the year the panels are installed. It’s also important to factor in the solar payback period, which is the time it takes to recoup your upfront investment and when savings begin.
Here are some ways to pay for solar panels:
Solar loan: Your solar installer likely has a relationship with a bank or other financial institution to offer a loan designed for solar panels. This can be a great deal, but you’ll want to get multiple offers to ensure the rates and terms are the best.
Lease or power purchase agreement: Some solar companies allow you to lease your system or enter a power purchase agreement. If you choose to lease, you won’t own the solar system, you’ll just pay for the use of the equipment. Entering a power purchase agreement means you’ll buy solar energy generated from the solar company to power your home. The price you’ll pay is usually lower than the retail rate from your local utility company. Note that not all incentives are available with a lease or power purchase agreement.
Cash: This approach only works if you happen to have thousands of dollars sitting around in a bank account. If you don’t have that yet, but want solar panels in the future, consider saving money in a high-yield savings account. Interest rates are high right now, and this can help you save faster.
Home equity: You don’t have to use a loan from your solar company. Financial institutions offer home equity loans and lines of credit (or HELOCs) that are commonly used for home improvement projects. These loans can be used for basically any purpose, and they may be a good fit for your solar project. Shop around and make sure you’re getting the best deal.
Personal loan: You can also borrow money through a personal loan. The main difference between a personal loan and a home equity loan is that a personal loan is typically unsecured, which means your house isn’t at risk. The downside is they tend to have shorter terms and higher interest rates than home equity products.
Read more: Just looking for an emergency backup? Check out portable solar panels and solar generators.
Installation factors to consider
Before signing a contract with a solar installer, you should consider whether solar panels are the right choice for you and your home. Here are some installation factors to consider:
Is your roof right for solar? The age, shape, size and slope of your roof impact how efficiently a solar panel system generates energy. The Department of Energy says solar panels will generate the most electricity on roofs with a slope of between 15 and 40 degrees. Older roofs or roofs in need of repairs should be maintained or replaced before solar installation occurs.
Are solar panels allowed in your neighborhood? In Colorado, homeowners’ associations aren’t allowed to ban solar panels. However, your homeowners’ association or neighborhood may have requirements or approval processes that you should consider before signing a contract.
Can you add solar panels to your insurance policy? Most standard homeowner insurance policies cover rooftop solar panels. However, you should still check with your insurance agency for the specific details of your policy.
Does your home receive enough sun? While solar panels can generate some electricity in indirect sunlight, direct sunlight of at least 4 hours per day is a general rule of thumb for when they make financial sense. In Colorado, many residents receive significant snowfall in the winter. Solar panels are designed to operate in the snow, although they will produce less power if it remains cloudy. If your roof gets consistent shade coverage, a solar panel system may not generate as much power as you’d like.
Do you rent your home? If you rent your home you may not be allowed to install solar panels. If this is the case, community solar programs are an alternative option. Community solar allows residents to subscribe to solar power produced in another location (usually somewhere nearby) and receive a credit on energy bills. The subscription rates are lower than the value of the credits, meaning you pay less than you would on normal energy bills.
How we evaluate solar companies
The companies we listed above as “the best” are curated from CNET’s best solar companies list. Companies making the best list are scored on the equipment, warranties and customer service they offer. Then, we make sure these recommendations are available in your state. You can read a full breakdown of how we review solar companies here.
Companies listed under the local installers were chosen in a less rigorous way. We chose them because they offered something unique or notable to customers in the state, they seemed well-regarded by internet reviewers or because they were one of the few installers we could find information on in the state.
Whether we’ve completed a full review on a company or not, it’s always a good idea to get multiple quotes from different installers before choosing a company.
Colorado solar power FAQs
Is solar power good for the environment?
Solar power is a more sustainable source of energy compared to coal or gas because it doesn’t emit greenhouse gases like carbon dioxide. Burning fossil fuels is a major contributor to climate change and air pollution. Scientists say we need to quickly transition away from fossil fuels and rely more on green energy sources in order to avoid the worst effects of climate change. While manufacturing solar panels does have environmental impacts, they have a much lower impact over their lifetime compared to the continuous burning of fossil fuels.
Does Colorado have a solar tax credit?
There are a variety of solar tax credits, rebates and incentives available in Colorado. The federal solar tax credit gives you 30% of the price of a solar system back on your taxes and is offered in every state. Colorado also offers several solar incentives at the state and local levels. Check the Database of State Incentives for Renewables and Efficiency for a full list of Colorado solar incentives.
How can I find a solar installation company in Colorado?
With a growing number of solar installers operating in Colorado, it can feel overwhelming trying to pick the right one. Take the time to do your research before signing a contract with an installer. Read customer reviews, check installers’ warranty terms and compare multiple quotes from installers. You can use CNET’s picks for top solar companies as a starting point.
