The Colorado Solar Tax Credit: Everything You Need to Know

While Colorado Lacks a Statewide Solar Tax Credit, Solar Is Heavily Incentivized

There are many great reasons to add solar panels to your home. However, the upfront cost of a solar array is still a significant barrier to most homeowners. In recognition of this, there are many solar incentives to Colorado residents, including the federal tax credit and other discounts applied toward the purchase and installation of solar panels.

At Elite Roofing & Solar in Denver, our goal is to help make solar installation as easy and cost-effective for our customers as possible to maximize their savings over the life of their new solar system. We strongly encourage our customers to take advantage of any and all rebates. Between the federal solar tax credit, benefits from the state of Colorado, and municipal incentives, there’s never been a better time to go solar. Schedule your consultation today!

Does Colorado Have a State Tax Credit for Solar?

Colorado has no statewide tax credit for the purchase and installation of solar panels. The most significant tax credit for solar panels continues to be the federal income tax credit, which we’ll cover a bit later.

However, while Colorado does not offer a property tax credit comparable to the federal tax credit, our state does still offer multiple incentives for solar. Most of these come in the form of tax exemptions and discounts.

There are two statewide Colorado tax exemptions for solar: a sales tax exemption and a property tax exemption. The Sales and Use Tax Exemption for Renewable Energy Equipment means that no sales tax will be collected on the purchase of solar equipment for your home. Meanwhile, the Property Tax Exemption for Residential Renewable Energy Equipment means that, for property tax purposes, the addition of solar panels to your home will not cause the value of your home to be assessed higher—in other words, you’ll pay no additional property taxes for installing solar panels.

The Federal Solar Tax Credit Is the Most Significant

The biggest financial incentive for Colorado residents interested in solar panel installation continues to be the federal solar tax credit. Properly called the Residential Clean Energy Credit, this incentive program has been around for many years, and was initially slated to be decreased in 2023. Instead, the tax credit was significantly increased for the next 10 years, to a rebate for up to 30% of the cost to purchase and install a new photovoltaic array. 

And remember: this incentive is a tax credit, not a tax deduction! So rather than just reducing your taxable income for the year, the federal solar tax credit is subtracted from the amount you owe in taxes. 

Colorado Homeowners Can Look for Municipal Credits as Well

While Colorado has no statewide tax credit, the state is still committed to achieving 100% renewable energy by 2040. As a result of this, many municipalities and regions—Denver and Summit County, for example—have added their own rebates.

Homeowners should also research incentives from utility providers. Certain utility companies are offering rebates for solar panel installation or incentives based on the amount of power generated and put back into the grid. These incentives can help further reduce the cost to install and operate solar panels, helping homeowners recoup their investment more reliably and quickly.

Elite Is Your Partner for Colorado Solar Panel Installation!

At Elite Roofing & Solar in Denver, we’re dedicated to quality and efficiency with all of our solar panel installations. What’s more, our combination of roofing expertise and an in-house solar installation team means your installation will be handled by seasoned experts from all angles. We’ll ensure your roofing system is solar ready, install your new array, then complete a final inspection and cover the section of your roof underneath your new array with a workmanship warranty.

There’s never been a better time to go solar in Colorado! Schedule your solar consultation with Elite Roofing & Solar in Denver today.

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