Colorado solar panels: The complete guide in 2025
Data updated Jul 8, 2025
Looking to go solar in Colorado? On average, you'll need to install a 10.77 kW solar panel system to cover your electric bill—which costs about $21,433 after the federal tax credit.
Cost for an average system in Colorado
| Out of pocket cost, cash | $30,619 |
| Federal tax credit (30%) | - $9,186 |
| Price post tax credit | $21,433 |
| 25-year savings | Payback period | Electricity offset |
|---|---|---|
| $32,062 | 11 Years | 99% |
As long as your federal tax bill is high enough, you can take advantage of the federal investment tax credit (ITC).
See your solar savings
Compare multiple offers and save up to 20%
Going solar in Colorado
One day, it's blizzarding; the next, it's 80 degrees. Colorado's weather is pretty unpredictable– except when it comes to sunshine. Most Coloradans will tell you they see at least 300 sunny days each year, making it a great state for solar.
Mix in Colorado's lucrative solar incentives, and it makes sense why so many Colorado homeowners are interested in adding solar panels.
Here's what you should know about going solar in the Centennial State.
Cost
How much do solar panels cost in Colorado?
Solar panels will save you a lot of money over time, but the upfront costs aren't cheap. The average Colorado homeowner needs a 10.77 kW solar panel system to cover their electricity needs, which comes out to $30,619 before incentives. Prices range from $26,026 to $35,212 before incentives. After the federal tax credit, that drops by 30%, and Colorado has some local incentives that bring down the cost as well.
While this may sound high, it will usually pay off in Colorado. That's why over 31,000 Colorado homeowners have used EnergySage to receive and compare quotes for solar installations. You can expect to earn back your initial solar investment through electricity savings in about 11.2 years, while most systems last at least 25 years. You'll often see this number referenced as your solar payback period.
Solar panel systems are expensive upfront purchases, but there are a few different financing options to make that initial cost more manageable.
Cash purchase: You pay for your entire system upfront. This provides the best long-term savings.
Solar loan: Enables you to maintain ownership of your system while owing little to no money upfront. When it comes to solar loans, subsidized clean energy loans through local incentive programs are usually your best bet. The next best options include a home equity loan or a personal loan—private solar loans typically come with higher interest rates or upfront fees.
Solar lease or power purchase agreement (PPA): A third-party company owns your system and either leases you the solar panels (solar lease) or allows you to purchase the electricity they generate (PPA). In general, these provide the lowest savings and garner the most negative press about solar. If you go this route, remember to read the fine print so you’re not trapped in a contract for longer than you intend.
)
Incentives
What are the best solar rebates and incentives in Colorado?
Incentives help bring solar's price tag down considerably in Colorado. Here are the major ones to know about:
| Incentive | Average savings in Colorado | Description |
|---|---|---|
Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC) | $9,186 | Lowers your solar panel system's cost by 30% |
Colorado Residential Energy Upgrade (RENU) Loan | Varies depending on how you finance your system | Provides 20-year, low-interesting financing up to $75,000 for home energy upgrades including solar panels |
Local incentives & rebates | Up to $8,000 for solar | Depending on your utility company and where you live, additional incentives may lower your system's cost |
Colorado solar sales tax exemption | 2.9% of your system's cost | You don't need to pay any sales tax on new solar panel systems in Colorado, saving at least 2.9% of your system costs. |
Colorado solar property tax exemption | 0.6% of your system's value annually on average | If you use solar energy as a source of power, you won't need to pay tax on the value your solar panels add to your property. Colorado’s average property tax is 0.6% |
Is net metering available in Colorado?
In certain states, net metering policies allow you to earn credits for the extra energy your home solar system produces. This incentive is known as net metering—basically a solar buyback program—and it can make it so you owe little to nothing on your electric bills.
All major utility companies in Colorado offer net metering, but each one's policy is a bit different. Any utility with less than 5,000 customers isn't required to offer net metering at all.
Equipment
Equipment quality
Solar panels continue to get more efficient, meaning they produce more power per square foot. In 2025, the most popular solar panels can produce about 450 watts of electricity in full sunlight—you’ll want panels with at least that much power output to get the most out of your installation.
It’s also important to choose a solar inverter setup that works for your roof’s layout.
And if you plan to install a solar battery, pick one that can easily integrate with that inverter.
While premium equipment can result in sticker shock, it typically saves you more money in the in the long run: The highest-quality panels degrade at a slower rate and maintain more of their power output for longer, and the best warranty terms often guarantee up to 40 years of coverage in case you need repairs or replacements.
Companies
Who are the best solar installers in Colorado?
We pre-screen all of the solar companies on EnergySage to ensure they'll provide you with a high-quality installation. We then rate them based on their results, reputation, and responsiveness. Here are the highest-rated EnergySage installers in Colorado:
Ready to start looking for a solar installer?
Here are some of the most popular ones near you:
)
resources
Top solar resources for Colorado
- Colorado solar loan providers
Search through our list of top loan providers to finance your solar panel system.
- Community Solar farms in Colorado
Can't install solar on your roof? Check out local solar farms to save money.
- Colorado Energy Office
Learn about CO clean energy programs from the state government.
- Colorado Public Utilities Commission (PUC)
Read more about how utility companies work in CO.
- Colorado Electricity Profile (EIA)
Learn about CO energy production and prices.
- CO State Solar Factsheet (SEIA)
See quick stats about how much solar energy has grown in CO.
Real homes. Real savings.
Helping customers make informed decisions since 2009.
Learn more about solar
Explore heat pumps, the latest in clean heating & cooling technology.
