4 Best Solar Companies in Colorado Springs of May 2024 – MarketWatch

Colorado offers two main incentives for solar panel systems — a sales tax exemption and a property tax exemption. Homeowners can combine these benefits with the nationwide federal tax credit for even more savings.

Federal Incentives

The Investment Tax Credit (ITC) is the primary incentive for solar panels and other renewable energy systems across the U.S. Here’s how it works:

• The federal solar tax credit allows you to claim a tax credit worth 30% of your total solar costs on your next IRS filing after installing a system.
• If you install a 6 kW solar system for $16,920 in Colorado Springs, you would get back $5,076.
• In this case, the net cost of your solar installation is reduced to $11,844.

People who buy solar systems can combine the federal tax credit with local incentives from state governments and electric utility companies to generate more savings. You can claim the federal tax credit for solar systems installed on primary and secondary homes but not for rental and other investment properties.

Colorado State Incentives

Colorado offers two tax exemptions for homeowners who decide to go solar and net metering policies.

• Sales and Use Tax Exemption: Colorado exempts solar panel systems from the state’s 2.9% sales tax. The exemption is applied at the time of purchase. So if you purchase a 6 kW solar system for $16,920, you would save $491 upfront.
• Property Tax Exemption: The increase in home value after installing solar panels is also tax-exempt in Colorado. The property tax rate is around 0.31% in Colorado Springs, which means you would pay $1,395 per year in property taxes on a $450,000 home. If a solar panel system increases the value of this property to $470,000, you would only get taxed on $450,000.
• Net metering: Colorado also has a state net metering policy to compensate solar owners for excess energy production. With net metering, you can send the excess energy your panels produced back to the grid in exchange for billing credits.

Colorado Springs Local Incentives

Based on our research, Colorado Springs does not offer local incentives for solar panels. However, homeowners can claim the above incentives and the federal tax credit.

Colorado Springs Utilities has offered rebates for solar installations in the past, but the program is currently closed.

This post was originally published on 3rd party site mentioned in the title of this site