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Solar Panels in Colorado: Cost and Savings

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Cost of solar panels in Colorado

The cost of a residential solar system depends on various factors, including the size, configuration, and labor costs. Solar panel costs are measured in dollars per watt, and the average cost ranges from $3 to $5. The average total price tag falls between $15,000 and $25,000 before any tax credits and incentives.

Main components of a solar panel system

One of the factors that will impact the cost of your solar systems is the configuration and the components of your system. The solar panels are the most important part of the setup, with options including monocrystalline, polycrystalline, and thin-film. Regardless of whether you place your solar panels on the ground or your roof, you’ll also need mounting and racking equipment.

Another piece that you’ll need for your solar system is an inverter, which takes the power your solar panels generate and converts it into the type of electricity needed to power your home.

Your system may also include one or more batteries. When your solar panels create energy, you can use them to power your home at the time. But you can also store that power in batteries to use later or re-sell to the electricity grid.

Solar incentives and rebates in Colorado

There’s no doubt that a residential solar system is a significant investment, but there are plenty of incentives in place to help you save money.

One of the easiest ways to save money with your solar panels is the federal government’s 26% tax credit available to those who invest in green energy infrastructure for their homes, including solar panels. The tax credit expires at the start of 2022, so be sure to purchase your panels before the close of 2021.

There are also ways to save specifically for Colorado residents. First, the state has a sales and use tax exemption, which exempts you from paying sales taxes on the purchase of renewable energy equipment. Colorado also has a property tax exemption for renewable energy, meaning you won’t pay more property taxes for the increase in your home’s property value from solar panels.

Other ways to save include net metering, where you can get credits for the electricity you give back to the power grid and rebates from local governments on solar installations.

Solar energy in Colorado may help lower your electric bills 

The credits and rebates aren’t the only ways you can save, thanks to your residential solar system. You can also see plenty of savings on your monthly electricity bill.

The average electricity rate in Colorado is 12.61 cents per kilowatt-hour, with the average electricity bill being about $83 per year. And while Colorado residents enjoy some of the lowest electric bills in the nation, there’s still plenty of room to save.

If you spend $15,000 on your solar system, you could expect to make your money back in about 15 years. But remember, that’s when you only factor in your monthly electricity savings. It doesn’t even take into account tax credits, rebates, net metering, and a home value increase.

Energy independence in Colorado can help you

One of the benefits of installing solar panels on your home is that you could reach energy independence. When you’re energy independent, you aren’t reliant on the electricity grid to power your home.

There are several benefits to energy independence. First, you don’t have to worry about power outages. If the power goes out in your area due to downed power lines or storms, you can power your home with solar energy.

Another benefit of energy independence is the cost savings. Not only will you save on your monthly electricity bill, but you also aren’t vulnerable to price hikes when electricity demand is high.

How to buy solar panels in Colorado

As you consider a solar panel purchase, there are a few things you should consider to make sure it’s really a good investment for your home:

  • Your roof: The Department of Energy says solar panels are best for south-facing roofs with a slope between 15 and 40 degrees. They’re also best on roofs that won’t need to be replaced in the near future and in homes that you plan to stay in for the long term.
  • Your HOA: Some homeowner and neighborhood associations may have restrictions in the installation of solar panels or require approval ahead of time.
  • Your location: Are you located in an area that gets a lot of sunshine? Colorado homeowners may not get the same benefit of solar panels as those in a state like California.

The future of energy is solar in Colorado

Colorado has consistently worked to incentivize the installation of solar panels and other green energy infrastructure. Through the state’s tax credits and net metering programs, it provides financial benefits to homeowners who invest in solar power.

Another step Colorado has taken to expand its solar energy generation is the creation of loan programs to help residents invest in solar power. Additionally, the state has invested in community solar programs, meaning you can benefit from solar power without installing them on your home.

Colorado still has room to grow when it comes to solar energy. The state isn’t ranked in the top ten in the nation for solar generation, but it’s getting closer each year. New solar installations grow each year among residential, nonresidential, and utility customers. The state has an impressive 348 solar companies working to expand the industry, including manufacturers, installers, and developers.

Solar energy FAQs

Do solar panels save you money in Colorado?

Solar panels save you money in Colorado through the tax credits and rebates available, the state’s net metering program, and the money you’ll save on your monthly electricity bill. 

What is the life expectancy of solar panels in Colorado?

Solar panels can last between 25 and 30 years, meaning you have more than enough time to get your money back. In that time frame, you could save twice as much as your initial investment.

Is it better to buy or lease solar panels?

Buying and leasing your solar panels both come with benefits. Leasing provides short-term savings, while buying is more cost-effective in the long run.

What percent of Colorado energy production is solar?

As of the end of 2020, Colorado gets about 3.96% of its electricity from solar power.

 

[Arina P Habich] / Shutterstock

Updated: 07/07/2021