Partner content: This content was created by a business partner of Dow Jones, independent of the MarketWatch newsroom. Links in this article may result in us earning a commission. Learn More
The average cost of a solar system in Colorado after applying incentives is $11,844 which is estimated to be paid back in savings in 8 to 9 years. Rechargeable Batteries For Solar
Leonardo David is an electromechanical engineer, MBA, energy consultant and technical writer. His energy-efficiency and solar consulting experience covers sectors including banking, textile manufacturing, plastics processing, pharmaceutics, education, food processing, real estate and retail. He has also been writing articles about energy and engineering topics since 2015.
Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.
The average cost of a solar panel system in Colorado is $2.82 per watt, which is three cents less than the national average of $2.85. So, for a 6 kilowatt (kW) system, you could expect to pay $16,920, which could drop to $11,844 after considering the 30% solar federal tax credit. Colorado also offers sales tax and property tax exemptions for renewable energy systems.
Colorado receives abundant sunshine, even during the winter months. This means a 6 kW solar system could yield more than $1,400 in annual savings, based on our calculations, resulting in a potential payback period of eight to nine years.
Colorado homes have an average electricity consumption of 8,144 kilowatt-hours (kWh) per year, according to the U.S. Energy Information Administration’s (EIA) Residential Energy Consumption Survey. To generate 8,144 kWh per year under Colorado’s sunshine conditions, you could use a solar array with a capacity of 5 kW to 6 kW.
The below table shows our estimated prices for home solar systems in Colorado ranging from five to 10 kW in size. Keep in mind that the exact cost of a solar system will depend on equipment brands, installation company, roof architecture and location.
*Average cost figures are based on market research and our March 2023 survey of 1,000 homeowners with solar. Actual costs may vary depending on your location, installer, equipment and site conditions.
You can also use our solar calculator to estimate solar panel costs in your area.
When you install solar panels, an important determining factor of system price is kilowatt capacity or the size. However, solar costs also depend on available incentive programs and local labor costs.
Here are some factors that determine the cost of solar installations in Colorado:
Colorado’s abundant sunshine can help make home solar systems more affordable. Since each panel has access to increased sunlight, a system can achieve higher levels of productivity, meaning you need fewer panels to power your home. You can also use solar incentives to achieve a lower cost and a higher return on investment.
Colorado solar panel buyers are eligible for three tax incentives:
Assume you purchase a 6 kW solar system for $16,920. In this case, the federal tax credit is $5,076, and you avoid sales tax of $490.68. The property tax exemption does not reduce upfront costs but delivers annual savings — if your solar panels add $25,000 in home value and your tax rate is 0.50%, you can avoid a tax hike of $125 per year.
Depending on your location in Colorado, you may also find local incentive programs. Here are a few examples:
The MarketWatch Guides team used Pollfish to survey 1,000 homeowners with solar panels nationwide in October 2023. Based on the results, 93% of Colorado-based participants reported using one or more incentive programs when purchasing a solar system.
Colorado offers a net metering policy for homeowners who buy solar panels. Under the program, electric utility companies must offer net metering to customers, who in turn earn billing credits for excess solar generation at retail rates. If customers cannot use the billing credits in one month, they can roll over unused amounts to the following month.
All investor-owned utilities and municipal utilities with at least 5,000 customers must offer net metering in Colorado, regardless of system size. Under the policy, every kilowatt-hour of excess energy generated by your solar panels should count toward your power bill savings. If you are away from home during the day and rely on grid energy to power your home at night, you can use the excess energy from your system’s daytime production to offset your bills.
Net metering programs may vary by utility company. If you are considering solar panels, contact your utility provider or visit its website to learn about interconnection guidelines. Qualified solar installation companies will also have ample experience with local net metering requirements and can help ensure your system qualifies.
We recommend comparing offers from multiple solar companies, regardless of your state and available incentives, to determine the best deal. If you only contact one solar installer, you may miss other offers or end up paying for an overpriced system. We recommend requesting quotes from solar companies that offer panels with 25-year or more warranty coverage and a workmanship warranty to cover installation services.
The MarketWatch Guides team constantly researches and compares solar companies. Here are our top picks for Colorado:
The price of solar panel systems in Colorado, which is around $16,920 for a 6 kW system, is close to the U.S. average of $17,100. For those who want to avoid a large initial expense, you can look at solar companies with one or more $0 down payment options, including:
With a solar loan, you can purchase your solar system with financing and pay the cost over time. With a solar lease, you can pay a monthly fee to use a system that remains under the ownership of a provider.
A solar PPA is similar to a lease, except you pay for the electricity generated instead of a monthly fee. These contracts typically have kilowatt-hour prices below local electricity rates, which can help save you the difference on power bills.
Our 2023 solar survey asked solar system owners about their chosen payment options, with the following results for Colorado:
As you can see in the table, all four solar payment options seem common in Colorado, but PPAs are the least popular option by a slim margin.
A cash purchase offers the most long-term savings — you pay no interest as with a solar loan and do not have to share your savings with a solar lease or PPA provider. However, paying more than $16,000 for a system upfront may not be a feasible option for every homeowner.
If you are deciding between $0 down payment options, such as a loan or a lease, the MarketWatch Guides Team recommends a solar loan for three major reasons:
A 6 kW solar panel system can generate around 9,600 kWh of energy per year in cities like Denver, Colorado Springs or Aurora, based on our calculations. The average residential rate in Colorado is 14.61 cents per kWh, according to the U.S. EIA. At this electric rate, a home solar system generating 9,600 kWh per year could save around $1,403 in power bills.
The typical cost of a 6 kW solar system in Colorado is $16,920, a price that drops to $11,844 after the 30% federal solar tax credit. Considering annual energy savings of $1,403, you could achieve a payback period of around eight to nine years, based on our calculations. High-quality solar panels have a 25-year or longer warranty, which exceeds our sample payback period.
Given that energy prices rise constantly, the payback period of your solar panels could be shorter. On average, U.S. electric rates rose by around 5% between 2022 and 2023. Although this is bad news for homeowners who buy power from the grid, people with solar power can potentially achieve more savings by using renewable energy to offset higher electric rates.
Solar panels can also raise your property value, and Colorado exempts solar owners from paying higher property taxes related to solar installation. For example, if you own a $500,000 home with a 0.50% tax rate, you would pay $2,500 a year in property taxes. If your home value increases to $530,000 with solar panels, your annual property tax stays at $2,500. Without the exemption, you would pay $2,650 after going solar.
However, you will likely achieve much lower net savings if you lease solar panels. For example, if you rent a 6 kW system for $100 a month, you would pay $1,200 a year. Even if you save $1,403 in total power bills, your net savings come out to around $203.
Colorado had installed 3,486 megawatts (MW) of solar capacity by July 2023, according to the Solar Energy Industries Association (SEIA). This represents a cumulative investment of $6.7 billion and enough capacity to power 705,977 homes.
According to our research and homeowner survey results, solar panels typically cost $2.82 per watt in Colorado. Based on this figure, a 5 kW system would cost $14,100 and a 10 kW system would cost around $28,200. However, your exact price may vary.
While Colorado does not have statewide programs that cover the entire cost of solar panels, you can qualify for incentives to lower your system’s price tag. For example, some rebates that cover a fraction of solar installation costs include:
No, but the state offers sales and property tax exemptions for solar panel systems. Colorado residents can also claim the federal solar tax credit, a nationwide incentive.
It depends on the solar panel brand you choose. When purchased as part of a professional solar installation, PV modules have a typical price of less than $250 each. However, solar installers get bulk discounts from manufacturers so you may see a higher price if you try to purchase panels directly.
Choosing an installer that offers solid warranty coverage can prevent you from paying for panel replacements over time. If you look for companies that offer a 25-or-more-year warranty on panels and performance, you will have a free replacement for any units that fail during the outlined period. Maintaining your solar panels regularly can also help ensure they continue to perform over time.
We closely evaluate solar installation companies with a focus on the factors most important to homeowners like you. We based our solar company methodology on input from multiple homeowner surveys, discussions with industry experts and research into the renewable energy market. Our review process involves assessing each company on the following criteria, which we then use to calculate a rating out of 5 stars. Cost and payment options (20 points): Cost is one of the most important factors when installing a solar energy system. Solar providers that offer cash purchases and in-house loan financing earn full points in this category. Companies also receive bonus points for offering solar panel leasing or power purchase agreements (PPAs). Services (20 points): In addition to solar installations, companies offering backup battery and electric vehicle charger installations, energy efficiency audits and system monitoring earn the most points in this category. Companies can also receive points for completing installations in-house, as opposed to using third-party contractors. Reputation (20 points): To assess the reputation of each company, we consider Google star ratings, Better Business Bureau (BBB) scores and reviews, and NABCEP certification status . We also look at customer complaint rates on sites like the BBB and weigh how the company responds. Warranty (15 points): We verify that each company offers workmanship, product and performance warranties on all of its solar installs. A provider earns more points for extending warranties that meet or exceed industry standards, including 10 years for system workmanship and products and 25 years for panel performance. Customer Support (10 points): Solar companies that offer virtual consultations, a mobile app, 24/7 customer support and high customer satisfaction with backend support earn the most points in this category. Industry Experience (10 points): Providers with 10 or more years of experience in the solar installation industry earn a perfect score in this category. Sustainability (5 points):To measure sustainability, we assess each company based on whether it shares a detailed sustainability statement or ESG disclosures on its website. We also conduct research to see if companies offer end-of-life panel disposal programs or have eco-friendly community partnerships.
We conducted in-depth research and analyzed several factors to determine our solar cost data, which is based on the following resources:
Leonardo David is an electromechanical engineer, MBA, energy consultant and technical writer. His energy-efficiency and solar consulting experience covers sectors including banking, textile manufacturing, plastics processing, pharmaceutics, education, food processing, real estate and retail. He has also been writing articles about energy and engineering topics since 2015.
Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.
Copyright © 2024 MarketWatch, Inc. All rights reserved.
Solar Energy Storage By using this site you agree to the Terms of Use | Privacy Notice | Cookie Notice