Solar Incentives and Financing in Colorado
What type of solar incentives are available?
Several types of incentives can help you go solar. This section covers the solar incentives available in Colorado. You can learn more about the national context of solar incentives on our national solar incentives page.
Renewable Energy Credits in Colorado
Renewable Energy Credits (RECs) is an accreditation system for the production of renewable energy [often 1 credit = 1 megawatt hour (MWh) of electricity] to support achieving state or regional renewable energy portfolio goals. These credits can be traded on an open market– often bought and retired by regulated polluting industries like utilities who are mandated to offset their climate emissions and sold by renewable energy producers (including solar homeowners).
What’s the status of Colorado’s REC market?
There’s not much of a REC market in Colorado, in part because the economics of renewable energy are increasingly favorable and are rapidly eclipsing the state’s Renewable Portfolio Standard. If someone did want to take advantage of the market, they would want to register their credits and sell them on a voluntary market like the Western Renewable Energy Generation Information System (WREGIS). Since there’s already a large supply of individual or ‘unbundled’ RECs, the pricing can be very low ($1-$2/MWh). This would amount to just a few dollars a year for a typical solar homeowner.
Should I ‘relinquish’ my RECs to my utility?
While you are contributing to making your electric grid more renewable, the utility can’t technically take credit for that production unless you agree to relinquish your ownership of the credits to them. Once obtained, the utility will ‘retire’ the credit to count toward their renewable energy goals. Given the continued downtrend of renewable energy pricing for utilities, it is unlikely we’ll see utilities otherwise purchasing your credits over building their own renewable infrastructure for the foreseeable future. Of course, everyone has different goals when they install solar and we always recommend you consult your financial adviser to determine the best decision for your needs.
For more information on the REC process, check out this VOX article.
There are no state-specific incentives for installing solar currently, though there are a variety of local incentives. Check with your local utility and municipality for programs applicable to your location.
The city may rebate approximately 15% of city sales and use tax on materials and permits for the installation. Additional grants are available for qualifying nonprofit-run facilities and housing, and individual residences owned by low/moderate and middle-income residents.
Business and residential customers are eligible for a $0.20 per watt rebate.
Homeowners are eligible for an annual cap of $500 for renewable mitigation as part of their Energy Smart program.
Residential customers who select solar installers certified through the city’s program qualify for a $1,500 rebate. Commercial customers can qualify for a rebate up to $100,000.
Customers from Aspen to Glenwood Springs have cash-back rebates for households and businesses with the Community Office for Resource Efficiency (CORE) amounting to $0.75/watt up to 3 kW for a solar PV system.
Not sure of your utility? Check out the Colorado Electric Utilities Service Territories.
As an alternative to net metering, Xcel Energy customers can participate in the Solar*Rewards program where customers can receive monthly payments in exchange for Renewable Energy Credits. For systems under 25 kW, the price is $0.005/kWh.
Holy Cross provides incentive for customers who install renewable generation for net metering are $750 per kW for the first 0-6 kW of capacity, $500 per kW for the next 6-12 kW of capacity, and $200 per kW for 12-25 kW of capacity [e.g. a 15kW system would be tiered $4,500 (6 kW) + $3,000 (6-12 kW) + $600 (12-15 kW) = $8,100]. Non-profit entities can receive an incentive of 40% of the installed system up to $1,500/kW for the first 25 kW installed at a site.
Know of a solar incentive not yet listed here? Let us know so we can add it!
Clean Energy Credit Union: Clean Energy Credit Union is a nonprofit financial cooperative (aka federally chartered credit union) that focuses exclusively on providing loans for clean energy projects. Colorado residents are eligible for a 0.50% rate discount on solar PV system loans from Clean Energy Credit Union via its partnership with the Colorado RENU program.
The Colorado RENU Loan is a statewide residential loan program sponsored by the Colorado Energy Office in partnership with Elevations Credit Union. It makes home energy upgrades easy and affordable by offering low-cost, long-term financing for energy efficiency and renewable energy improvements. Interest rates start at 2.75%
Colorado Energy Office’s AgEE program provides a turnkey approach for Colorado agricultural businesses by providing a no-cost energy audit and technical assistance, including supporting applications for state and federal funding. https://energyoffice.colorado.gov/clean-energy-programs/agricultural-energy-efficiency
Other Colorado solar financing options
- Alpine Bank: Green Lending program line of credit
- Colorado Commercial Property Assessed Clean Energy (C-PACE): Eligible commercial (includes multi-family of 4+ units) and industrial buildings to finance up to 100% of energy efficiency, renewable energy and water conservation eligible improvement
- Elevations Credit Union: CO RENU Loan – low interest rates, with zero down payment. Available statewide with exception of Boulder (see Energy Smart Program) and Fort Collins Utilities (EPIC loans).
- Fort Collins Utilities EPIC Loan: On bill financing, zero down loans for FC Utilities customers
Rural farms and small businesses may be eligible for grant funding available from federal programs.
- USDA Rural Energy for America Program (REAP): Offers grant funding and guaranteed loan financing to agricultural producers and rural small businesses for renewable energy systems or energy efficiency improvements.
- USDA Natural Resource Conservation Service (NRCS)Environmental Quality Incentives Program (EQIP) Energy Initiative: Provides technical information, financial assistance, and energy upgrade financing.