Colorado Solar Tax Credits, Incentives and Rebates (2024) – MarketWatch

Colorado offers a sales tax exemption and a property tax exemption for solar power systems. Depending on the location of your property within the Centennial State, you may also qualify for solar rebates.

Sales and Use Tax Exemption for Renewable Energy Equipment

Incentive value: Exempts the state’s 2.9% sales and use tax

Frequency: Applied once at the time of purchase

Colorado introduced a state sales tax exemption for renewable energy systems in July 2006, which includes heat pumps and lithium-ion batteries. As a result, you will not get charged the state’s 2.9% sales tax when purchasing solar panels or other eligible technologies.

The sales tax exemption is offered as an immediate discount for Colorado homeowners who switch to solar. Assume you pay $16,000 for a rooftop solar system. With the exemption, a 2.9% sales tax of $464 is exempt from your purchase.

Property Tax Exemption for Residential Renewable Energy Equipment

Incentive value: Exempts increases to your local property taxes

Frequency: Ongoing

Colorado residents also get a property tax exemption for renewable energy systems. If you add a solar panel system to your home, your municipality will not tax the resulting increase in property value.

Assume you own a $450,000 home in Colorado. If you live in a municipality with a 0.6% property tax rate, you would owe $2,700. If you decide to go solar and the system increases your home value to $475,000, your annual property taxes would remain at $2,700. Without the exemption, the $25,000 property value increase from installing solar panels would add $150 to your annual taxes.

Colorado Residential Energy Upgrade (RENU) Loan

Incentive value: Low-interest loans up to $75,000

Frequency: One-time 

The Colorado RENU program offers low-interest financing options for various home upgrades, including solar panel systems and battery storage. The program offers loans of up to $75,000 with a repayment period of 20 years. If you qualify for a RENU Loan, you can implement energy efficiency measures and solar panels at zero upfront cost and pay off the loan with utility bill savings.

To qualify for a solar loan from Colorado RENU, you must use an approved contractor to install your PV system. The program is funded by the Colorado Clean Energy Fund, in partnership with local credit unions.

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