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Colorado Solar Rebates and Incentives

Colorado Rebates and Incentive Summary

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As a state with over 300 days of sunshine a year, Colorado is a prime location for solar energy—and it knows it! Colorado is among the vanguard states for solar on a number of fronts. It has one of the nation’s strongest renewable portfolio standards (RPSs), which requires investor-owned utilities to source 30 percent of their energy from renewable energy by 2020. The RPS also requires IOU utilities, and to a lesser extent rural and municipal utilities to source a certain amount of their power from distributed generation sources like homes and small businesses. As solar has gained popularity in the state so too have options for residents in the state. For instance, a growing number of homeowners in the state are choosing to install systems on their homes with no up-front costs through power-purchase agreements or leases. Regardless of their choice there are plenty of qualified solar installers in the state that can explain options and costs prior to installing a system.

 

Colorado also is home to solar testing centers, including the National Renewable Energy Laboratory. All this has culminates in a rich environment for  solar thermal and photovoltaic installations throughout the state. As the price of photovoltaics has dropped and solar has become more popular the incentive programs offered by utilities like Xcel Energy have decreased. But Colorado also is the hotbed for a new type of solar array, the community solar garden, through which residents can buy a part of a local solar array and use that to offset their electricity costs. 

 

In addition to the utility incentive programs offered in Colorado, the state offers property- and sales-tax exemptions. Combined with federal incentive programs there are plenty of  options to save on the cost of your solar equipment and installation. The state also is doing a lot to help reduce the cost of solar by, for instance, participating in the Department of Energy’s SunShot Initiative, in one instance to to simplify the permitting process throughout parts of the state, making it easier, quicker and cheaper to permit solar systems in the state. Locally, residents and businesses can also find grant, loan or rebate programs that can help them finance solar and other renewable energy projects. Colorado easily has some of the strongest support in the nation for renewable energy.

 

(As of October 2012)

 

Colorado Solar Power Financial Incentives

 

Local Grant Program

Local Loan Program

Local Rebate Program

PACE Financing

Performance-Based Incentive

Property Tax Incentive

Sales Tax Incentive

State Loan Program

Utility Loan Program

Utility Rebate Program

 

Rules, Regulations & Policies

 

Building Energy Code

Energy Efficiency Resource Standard

Energy Standards for Public Buildings

Generation Disclosure

Green Power Purchasing

Interconnection

Line Extension Analysis

Mandatory Utility Green Power Option

Net Metering

Public Benefits Fund

Renewables Portfolio Standard

Solar/Wind Access Policy

Solar/Wind Permitting Standards

 

Related Programs & Initiatives

 

Alternative Fuels Data Center

The U.S. Department of Energy's Alternative Fuels Data Center (AFDC) provides information, data and tools to help fleets and other transportation decision-makers find ways to reduce petroleum consumption through the use of alternative and renewable fuels, advanced vehicles, and other fuel-saving measures. 

 

Green Power Network

The U.S. Department of Energy's Green Power Network provides news and information on green power markets and activities, including opportunities to buy green power. This site provides state-by-state information on green power marketing and utility green power programs. In addition, the site lists marketers of renewable energy credits (RECs), also known as green tags or renewable energy certificates, which represent the environmental attributes of the power produced from renewable energy projects. 

 

Weatherization Assistance Program

The U.S. Department of Energy's Weatherization Assistance Program (WAP) enables low-income families to reduce their energy bills by making their homes more energy-efficient. Through this program, weatherization service providers install energy-efficiency measures in the homes of qualifying homeowners free of charge. The WAP program web site offers a state-by-state map of opportunities, projects and activities. 

 

Wind Powering America

The U.S. Department of Energy's Wind Powering America site provides state-by-state information on wind projects and activities, including wind working groups, validated wind maps, anemometer loan programs, small wind guides, state-specific news, wind for schools, workshops and web casts.

 

(Source: DSIRE)

 

Property Tax Exemption for Residential Renewable Energy Equipment

Program Type Property tax exemption
Technologies Photovoltaics (solar panels), Solar Space Heat, Solar Water Heat, Wind, Biomass, Geothermal Heat Pumps, Small Hydroelectric
Amount

100% percent tax exemption for photovoltaics, varies for other technologies by local variances

Required Documentation Receipt of purchase and installation 
Official Web Site http://www.dola.state.co.us/dpt/index.htm

Residential photovoltaic installations and some other renewable energy installations, like wind, up to 2 AC megawatts in size are 100 percent exempt from property taxes in Colorado.The system must primarily be used to supply electricity to the onsite home or building. Property taxation of some other forms of renewable energy like solar space heating, biomass or geothermal and others may be determined on a local basis. To learn more about whether such systems are exempt locally, discuss it with an installer or check with the local municipality or county.

 

Sales and Use Tax Exemption for Renewable Energy Equipment

Program Type

Sales Tax Incentive

Technologies

Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Wind, Biomass, Geothermal Electric, Other Renewables (not specified)

Amount 100% Expemtion at state level
Required Documentation  
Official Web Site http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251773934969&ssbinary=true

 

In Colorado solar, wind, geothermal and other renewable energy systems are exempt from state sales and use tax—at least through July 2017. This includes exemption from taxation of all sales, storage, and use of components used in the production of alternating current electricity from a renewable energy source. This includes equipment like trackers, generating equipment, supporting structures or racks, inverters, towers and foundations, balance of system components such as wiring, control systems, switchgears, and generator step-up transformers. 

 

While the exemption only applies to state-level taxes, Colorado also enacted legislation that allowed local jurisdictions, towns, counties, cities, etc., to also exempt renewables from sales and use taxes. Check with local jurisdictions to find out whether or not they tax such purchases or uses.

Xcel Energy Solar Rewards

Program Type Performance-Based Incentive
Technologies Photovoltaic
Amount

Incentives are reduced over time as certain thresholds, in terms of solar installed, are met.

 

As of 10/5/2012:

Customer-owned systems up to 10 kW: $0.14/kWh for first 10 years of production

Third-party-owned systems up to 10 kW: $0.9/kWh for first 20 years of production

Systems 10.1 kW up to 500 kW: $0.09/kWh for first 20 years of production

Required Documentation

Reservation Letter

Interconnection Agreement

REC Purchase Contract

Official Web Site

http://www.xcelenergy.com/Save_Money_&_Energy/Find_a_Rebate/Solar*Rewards_-_CO

This popular program has paid over $263 million dollars in incentives to customers,  supporting more than 11,000 systems and 127 megawatts of solar in Colorado. Over time the rebates have changed, from an up front rebate of $2 per watt as recently as 2010 to a performance-based incentive only program, meaning Xcel purchases the renewable energy credits (RECs) produced by the system at a fixed kilowatt per hour rate for a period of 10 years for customer-owned systems and 20 years for third-party owned systems, like systems installed under power-purchase agreements. Homeowners can install a system up to 120 percent of their current electric  use under the program. The company uses bidirectional meters to determine how much energy the system produces. 

 

Xcel customers with solar can also net meter their system, meaning that customer generators are credited for producing net excess generation. If, over a year period, the system produces more energy than the household consumes, homeowners can elect wither to have the credit roll forward indefinitely or they can receive a yearly payout. The payment is at a rate comparable to the utility's avoided-cost rate.

 

Xcel Energy - Solar Rewards Community Program

Program Type

Performance-Based Incentive

Technologies Photovoltaic
Amount

Systems, up to 2 megawatts in size. Solar garden REC incentive of (as of October 2012) $0.14 per kW/h for small systems, $0.11 per kW/h for mid-sized systems, up to 500 kW.

Required Documentation

Qualifying community solar garden and customer subscription agreement

Official Web Site

Xcel Energy - Solar*Rewards Community 2 - CO

Colorado is one of the first states to enact legislation (in 2010) enabling community solar gardens and is a leader in community solar gardens in the nations. Xcel Energy, the state’s largest utility offered it’s first incentive program for community solar gardens in 2012. Within 30 minutes of opening the program to applications it received applications for more than triple the amount of megawatts the request for proposals called for in terms of small and medium systems.

Unlike traditional residential solar systems, community solar gardens are located near a center of energy use, like a town. They’re also larger than a residential system from 10s of kilowatts to a few megawatts in size, depending on local regulations and rules. Local utility customers can essentially subscribe to or buy a part of the solar array. The electricity produced by the subscriber or buyer’s part of the system is then used to offset their monthly electric bill, or, in some cases wipe it out. 

The payment rates are for the renewable energy credits (RECs) generated by the system. The customers receive bill credits but not REC payments. The REC payments help offset the cost of the installation itself.

Under other specifics of the program, community solar gardens must have at least 10 customer subscribers—prior to applying—to qualify for the program. At least 5 percent of the allocation must be attributed to income-qualified subscribers. In addition, no one subscriber have more than 40 percent interest in a project. Customers can purchase no more than the equivalent of 120 percent of their annual electric usage. In counties with less than 20,000 people customers  can participate in gardens in adjacent counties with fewer than 20,000 people.