Colorado - Energy tax credit, solar rebates and incentives

Colorado Renewable Energy and Solar Incentives

Use and Sales Tax Exemption for Renewable Energy Equipment (Residential/Commercial)

Colorado grants complete exemption of all renewable energy products from use and sales tax.
The following renewable energy equipments are eligible for exemption: PV, wind systems, solar thermal process heat, solar water heat, solar space heat, solar thermal electric, biomass and geothermal electric.

Solar Use and Sales Tax Rebate – Boulder (Residential/Commercial)

This refund is offered to solar system purchasers and taken from tax revenue that accrues from solar energy sales.
System purchasers will receive a refund of 35% of unrestricted tax revenues.
Only unrestricted revenues will be refunded.
A refund of 15% of the installation cost for solar systems will be issued.

Solar Power Pioneer Loan Program – Aspen (Residential/Commercial)

This program grants a financing option of 0% on loans for PV and solar thermal systems.
Loans generally are set for a payback period of up to 5 years.
The size of the loan is dependent upon the system size.
To qualify for this program, applicants must be year-round residents of Roaring Fork Valley.

Solar Pioneer Rebate Program (Residential)

Homeowners residing in Roaring Fork Valley who install PV or solar thermal systems are offered this rebate.
Authorized installers are required to complete a rebate application following installation. They must also be certified under COSEIA standards.
Awards are allotted as follows:
- $2.00/watt AC capped at $6,000 for photovoltaic systems.
- $66.54 x the annual savings for solar thermal systems. This rebate is capped at $1,000-$2,000 based on the size of the system.

Clean Energy Finance Districts (Residential)

Under this finance option, residential owners may purchase renewable and conservation energy systems with a loan granted by their local government and pay back the loan through raising their property tax assessment.

Sources of revenue: contracts, grants, donations from utilities, private lending organizations, bonds, gifts, etc.
A maximum capacity of $12,500 may be financed per resident.

Climate Smart Loan Program – Boulder County (Residential)

Homeowners residing in Boulder County are granted financial options who are seeking renewable energy upgrades and installations.

Qualifying conservation energy systems: photovoltaic systems, wind, solar thermal, geothermal heat pumps, wood stoves and biomass.
Loan awards range from $3,000 to $50,000 and are generally paid back over a 15-year period.
- Payback is issued in the form of a special assessment on the homeowner’s property tax bill.

Local Photovoltaic and Solar Thermal Rebate Programs (Residential)

This program is offered to homeowners residing in regions outside the service area of Black Hills Energy and Xcel utility companies.
The awards given are equivalent to those provided for subscribers to Black Hills Energy and Xcel within utility service areas.
Grants are offered to homeowners who buy and install solar thermal or PV systems on their land.
Based on system size, rebate quantities may vary. Awards are capped at $9,000 for residential photovoltaic systems and $3,000 for residential solar thermal systems.

Utility-Sponsored Loan and Solar Rebate Programs (Residential/Commercial)

Rebate and loan programs are typically offered to all customers who purchase and install conservation energy systems and equipment.
Loans generally maintain either a low interest or 0% interest to assist in the buying and installing of renewable technologies.
Rebate awards specifically for solar and wind are dependent on the following: system size, applicable sectors and per-watt AC of a given system.
Utility companies and metropolitan cities grant loan and rebate awards all over the state of Colorado.

Federal Tax Credit (Residential/Commercial)

Taxpayers are granted a personal tax credit of 30% of the total expenses, which include installation of residential and commercial solar-electric systems, solar thermal systems, fuel cells and installation costs. Residential and commercial wind energy installations and geothermal pumps are also subject to a tax exemption.

Solar electric installations and solar thermal systems installed after 2008 have no limit to their incentive.
If there is excess federal tax credit, it may be carried over to the subsequent taxable year only if it surpasses tax liability.
The federal energy tax credit is in force through 2016

Federal Energy Conservation Subsidy Exclusion (Residential)

Public utilities provide residential purchasers with an exemption of 100% of energy conservation subsidies.
The overall worth of an installation or renewable utility regardless of the energy conservation capacity, will be excluded from the buyer’s gross income.
Customers who participate in a utility company’s energy conservation program may be given a reduced rate of electricity utilized or a nonrefundable credit of the price of electricity on the customer’s monthly electric bill.

Energy-Efficient Mortgages (Residential)

With this federal loan program, homeowners may utilize energy-efficient mortgages (EEM) to either supplement or completely fund renewable energy systems.

Example: 4KW System – Residential Installation Cost

Average Electric Bill: $250/mo

Projected Annual Bill Escalation: 5%

Cost Per Watt: $6.50

Estimated System Cost: $26,000
Federal Tax Credit: $4,740
State/Utility Rebate: $10,200
Net Cost: $11,060
Cumulative Lifetime Savings (25 Years): $29,491
Investment Return: 10.6%