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%
Savings of 57% on the total cost of your solar system through incentives