Solar SME Colorado
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With more than 300 sunny days annually, Colorado has staggering solar potential and was among the first states in the United States to establish a Renewable Energy Standard. With utility rates rising, grid demand increasing, and sustainability goals accelerating statewide, solar power has become a key part of Colorado’s energy landscape. Colorado is experiencing a significant shift toward clean energy, as solar adoption continues to increase across residential, commercial, and agricultural sectors. Additionally, with multiple solar incentives available in Colorado, you can reduce the cost of installing a solar panel system. Solar SME provides professional solar installation, premium equipment, and reliable battery storage solutions customized for Colorado homes and businesses. Looking for a trusted solar installer in Colorado? We offer customized solar systems designed to deliver long-term savings, energy independence, and a strong return on investment.
How much can you save on electric bills with solar in Colorado?
The average residential electricity rate in Colorado is 15 ¢/kWh. The residents spend around $153 a month on electricity on average. That comes to $1,836 annually. In CO, installing a solar system will typically pay for itself in 12.21 years, at which point you might not have any outstanding electricity payments. The average Colorado power user will require a 6.9-kilowatt (kW) solar panel system to offset 100% of their annual electricity consumption due to the state’s abundance of sunshine. Grid independence can be enhanced by adding a battery storage system, and excess power output can even be profitable.
25-year Savings
$62,880
10 Years
84%
Solar Financing Options in Colorado by Solar SME
Solar installation is a worthy investment; however, it may cost you higher to own your solar panel system. If you are unable to own due to any reason, like you are a renter or do not have enough cash in hand, some flexible solar financing options are available for you:
Owning your solar panel system is the best way to avail all the benefits and incentives associated with solar installation. Additionally, there is no hassale of paperwork, interest calculations like solar loans, and no monthly payments. Instead, your home value will boost by 7%-14% if you are the owner of the system.
Solar loans are a good option if you want to own the solar energy system but do not have the investment at the time. You can own a system with fixed monthly payments for up to 25 years under solar loan financing. The good news is that the lending rate is down to 4.0% - 4.25%. Furthermore, you can avail all solar incentives and solar tax credit in Colorado with loan financing. A local solar installation company, like Solar SME, can help you to go solar with 0% APR option.
With 30% tax credit expiry and high upfront costs, solar lease/PPA financing is becoming popular in the U.S. for reducing high electric bills and maximum grid reliance. Third-party financing requires you to pay a fixed monthly lease payment or per-kWh rate (PPA) for the solar energy produced by the system. According to the U.S. Department of Energy, this rate is 10% to 30% lower than your electric bills. As you are not the owner, the federal tax credit and other solar incentives' expiry will not impact your savings. Furthermore, with Prepaid Lease, you can even own a system with 30% off upfront in 6 years. However, it is vital to choose your solar leasing plans wisely. Solar SME, the top solar provider in Colorado, offers the best solar lease options for making your solar journey affordable.
Best Residential Solar Incentives in Colorado
Due to solar-friendly policies that promote incentives, Colorado is considered one of the best states in the country for home solar. As a Colorado homeowner, you have access to some best solar incentives that can substantially improve your return on investment in solar panels.
01- Residential Clean Energy Credit
Colorado homeowners who pay taxes can apply for the 30% federal tax credit when they switch to solar power. This tax credit is applied to federal income liability and is equal to 30% percent of the cost of installing a solar panel system. Remember that the tax credit is not an upfront payment. However, after December 31, 2025, this credit will expire. President Trump signed legislation on July 4, 2025, which completely cancels the home solar tax credit beginning on January 1, 2026, 10 years before it was supposed to expire.
02- Colorado RENU Loan
Unlike home equity loans, Colorado’s Residential Energy Upgrade (RENU) Loan does not require collateral, has no hidden costs, and offers solar financing at rates that either meet or slightly exceed the market average. You can get a loan up to $75,000 with a 20-year repayment schedule if you own your house and don’t have a shared heating or cooling system. Your credit score and the qualified credit union you select will determine your rate. The loan will have a fixed monthly payment for the duration, with no prepayment penalty, and you won’t owe anything up front. The Colorado Clean Energy Fund, a nonprofit organisation having connections to the Colorado state government, supports it.
03- Solar Tax Exemptions in Colorado
Colorado is one of the few states in the U.S. that offers 100% property and sales tax exemptions for a solar installation. You won’t have to worry about paying any extra property taxes after installing solar due to Colorado’s 100% property tax exemption! The solar property tax exemption can save the average home $177 annually in property taxes when taking into account Colorado’s median home value and the state’s average property tax rate of 0.48%. Moreover, for homeowners who buy solar system equipment for their homes, Colorado grants a 100% sales tax exemption. As a result, Colorado residents are exempt from paying the extra 2.9% state sales tax that is applied to solar purchases.
Colorado Local Rebates & Incentives
In addition to the state incentives, Colorado utility companies and solar programs for eligible residents offer incentives to lower the upfront cost of your solar project.
Xcel Energy’s Solar Rewards On-Site Solar Program
Customers who meet income requirements or reside in a Disproportionately Impacted (DI) community are eligible to receive $1,000/kW up to 7 kW under this program. For a fair deal, you will have to give Xcel 20 years to claim your RECs. After your system is authorized to function, you will receive a check in the mail if you are eligible.
Black Hills Energy Rebate
Black Hills Utility will pay you $0.03 for every kWh your solar panels produce for the first 10 years they’re connected to the grid. Your system must be 25 kW or less, and your panels must have a 20-year warranty. Black Hills Energy will receive the renewable energy credits (RECs) linked to your system in return.
Holy Cross Energy Incentives
For systems between 6 kW, utility customers can receive an upfront incentive of $250/kW; for systems between 6 and 25 kW, the incentive is $100/kW. However, the funds are available on a first-come, first-served basis.
Battery Storage Incentives in Colorado
Solar batteries are the best option for a backup power system in Colorado.
Xcel Energy Renewable Battery Connect Program
If you install a solar battery in Colorado, it’s a good alternative to a backup gas generator, for instance, and some Colorado electric utilities provide good incentives. Customers of Xcel Energy who sign up for the Renewable Battery Connect program are eligible for an upfront reward of up to $5,000 per application, or $350 per kW (not kWh, a significant distinction). The Tesla Powerwall 2, Tesla Powerwall +, Tesla Powerwall 3, and SolarEdge Home Battery are among the batteries that qualify. Clients can receive $100 a year for up to five years if they continue to participate in the program. By continuing to be enrolled, you consent to Xcel Energy using up to 60% of your battery during control events, up to 60 times annually, for a period of five years. Therefore, at the start of a blackout, it’s likely that your battery is only 40% charged. The good news is that you can unenroll at any moment without incurring a penalty or receiving a refund.
Holy Cross Energy Battery Incentive
A $500/kW upfront incentive up to $12,500 is available to Holy Cross Energy customers who install solar batteries and sign up for the Distribution Flexibility Program Tariff, a particular electric pricing plan. Alternatively, you can earn $250/kW or $100/kWh up to $12.500 if you sign up for the Time of Day Tariff. You can only enroll in one of Holy Cross’ battery storage incentive programs.
Is net metering available in Colorado?
According to Colorado’s state net metering regulation, any extra energy produced by solar systems must be purchased by all utilities and electric cooperatives, with the exception of local municipal businesses. For every kilowatt-hour of solar power you contribute to the grid, utilities must credit your charge. The cost of electricity you consume from the grid later in the day, when your solar panels aren’t generating electricity, is entirely covered by each credit, which is worth 1 kWh. According to Colorado’s rules, utilities must reimburse consumers at the end of the year if they choose not to have those credits rolled over, and their net power production stays above consumption for a full year. This is the best-case scenario for homeowners in terms of savings and can potentially reduce 100% of your energy costs.
The best way to determine how to maximize your solar savings in Colorado is to consult with a local solar installer. Solar companies near you can guide you with the best solar solutions and incentives in your area and can help you to get the most out of your solar investment.
Commercial Solar Installation in Colorado
Commercial solar installation in Colorado is an effective way for businesses to combat all of the power challenges. Businesses can generate power using free and unlimited sunlight via commercial solar panels. Furthermore, using solar electricity combined with a reliable battery backup system like Tesla Powerwall 3 eliminates power disruptions. Hence, enabling smooth workflow and increased operational resiliency. Unlike residential FTC, which is expiring on Dec 31, 2025, you are still eligible for a 30% ITC for commercial solar systems. Additionally, High Performance Building Program, MACRS Depreciation, and PACE Financing options are available for business solar installation.
Why is it Worth it to Switch to Solar in Colorado?
Definitely! Colorado residents can save an average of $5,340 through solar incentives and rebates available throughout the state. Colorado offers excellent incentives to go solar and to add battery storage, contributing to the state’s goal of achieving 100% clean energy generation by 2050. Top reasons to switch to solar in CO include:
Low Electric
Bills
Maximum Grid Independence
Flexible Financing Options
Increased Home Value
Earn Energy Credits/SREC Programs
The best way to determine how to maximize your solar savings in Colorado is to consult with a local solar installer. Solar companies near you can guide you with the best solar solutions and incentives in your area and can help you to get the most out of your solar investment.
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Our Customers are Getting Up to 90% Lower Electric Bills with
Solar SME Tailored
Solar Solutions
Solar SME provides its valuable clients with an exceptional solar experience by designing solutions according to its customers’ unique needs. Also, we hold a positive image in solar marketplaces like Energysage. Moreover, we are accredited with BBB, and our happy customers share their solar experience and highly recommend Solar SME for the best solar services in Colorado.
City: Denver, CO
System Size: 5 kW
Annual Savings: ~$750–$900 per year
City: Colorado Springs, CO
System Size: 6.5 kW
Annual Savings: ~$950–$1,150 per year
City: Fort Collins, CO
System Size: 7.8 kW
Annual Savings: ~$1,100–$1,300 per year
City: Boulder, CO
System Size: 8.5 kW
Annual Savings: ~$1,250–$1,450 per year
City: Aurora, CO
System Size: 9.5 kW
Annual Savings: ~$1,400–$1,650 per year
City: Grand Junction, CO
System Size: 11 kW
Annual Savings: ~$1,700–$1,950 per year
Frequently Asked Questions
The average system in Colorado can pay itself off in about 10 years, based on our calculations. The time required for solar panels to pay themselves off in Colorado, also known as the payback period, varies based on factors such as the type of solar panels and resulting power generation, total system cost and layout, and more. For example, you may achieve a faster payback period with a smaller system that costs less.
Colorado Solar for All (COS4A) is a solar program that caters to moderate-to-low-income residents and disadvantaged applicants. A few states across the country have adopted their own SFA programs that all fundamentally work the same way: eligible applicants can ‘subscribe’ to a community solar project virtually for free, gaining access to electric bill savings and clean energy.
EnergySmart Colorado partners with utility companies, such as Black Hills Energy, Holy Cross Energy, and Xcel Energy, to offer rebates to homeowners for energy-efficient home improvement upgrades or investments in renewable energy. Rebates have been offered for solar-related projects, but their availability varies with your location. As for the other rebates available, it’s a great opportunity for homeowners to save money on energy-efficient upgrades but can’t get solar panels right away.
No, there are not currently any state or federal programs in Colorado that offer solar panels for free. If you’ve ever heard the term free solar panels, it is referring to financing your system through a solar lease or power-purchase agreement (PPA). These financing options require no upfront cost but still require monthly payments.
Look for a licensed, NABCEP-certified solar installer. Check reviews, warranty terms, equipment quality, and utility knowledge. A trustworthy installer like Solar SME will provide transparent pricing, accurate system design, and long-term support.