Colorado solar incentives in 2026, in one line: no federal credit for a system you buy, but sales and property tax exemptions, retail-rate net metering at the big utilities and strong sun keep solar working in Colorado. Last updated: 16 October 2026.
Colorado Solar Incentives 2026 at a Glance
| Incentive | Status in 2026 | What it is worth |
|---|---|---|
| Federal residential credit (Section 25D) | Ended 31 Dec 2025 | $0 on a 2026 cash or loan purchase |
| Federal Section 48E (lease / PPA) | Claimed by the system owner, not you | Indirect – may show up as a lower lease or PPA rate; tightens after 2027 |
| Sales and use tax exemption | Active | No state sales tax on residential solar; many cities and counties also exempt it |
| Property tax exemption | Active | Residential solar is exempt from property tax |
| Net metering (Xcel and other utilities) | Active | Monthly surplus credited at the retail rate; year-end excess paid at a lower rate |
| Xcel Energy Solar*Rewards | Varies | Incentives now focus on income-qualified customers – check the current offer |
| State income tax credit | None for solar panels | Colorado does not offer one for home solar |
Looking at solar in Colorado? Here is every incentive and rebate you can stack in 2026, and the headline has changed: the 30% federal tax credit expired at the end of 2025, so Colorado’s own programs are what is left. Colorado combines full tax exemptions, retail-rate net metering and reliable sun, making solar a solid investment.
Colorado Solar Incentives in 2026
- No federal tax credit on a 2026 cash or loan purchase - Section 25D expired 31 December 2025. See solar tax credit 2026.
- Sales and use tax exemption on solar equipment.
- Property tax exemption on residential solar.
- Net metering at the retail rate at major utilities.
- Utility programs such as Xcel Energy Solar*Rewards, mainly for income-qualified homes.
What Solar Costs in Colorado
Colorado gets plenty of sun, including in winter. A typical 7 kW system runs about $21,000 before incentives. There is no federal tax credit in 2026, so only Colorado programs reduce that. Use the calculator above for your estimate.
Is Solar Worth It in Colorado?
Yes for most Colorado homeowners, especially where utility rebates apply. See our full breakdown: Is Solar Worth It in 2026?
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Colorado Solar Incentives FAQ
What solar incentives does Colorado offer in 2026?
Sales and use tax and property tax exemptions, retail-rate net metering at the major utilities, and utility programs such as Xcel Solar*Rewards. There is no federal credit for a system you buy.
Are there solar rebates in Colorado?
Some, through utilities. Xcel Energy Solar*Rewards incentives now mostly target income-qualified customers, and a few municipal utilities and co-ops run their own programs. Check what your utility offers before you sign.
Does Colorado have net metering?
Yes. Investor-owned utilities like Xcel credit monthly surplus at the full retail rate. Credit still unused at year-end is paid out at a lower rate, so size the system to your usage.
Do I pay sales or property tax on solar in Colorado?
No state sales tax, and residential solar is exempt from property tax. Local sales tax depends on your city or county.
Can I combine Colorado and federal incentives?
There is no federal credit left to stack on a 2026 cash or loan purchase - Section 25D ended 31 December 2025. Colorado incentives still stack with each other. With a lease or PPA, the system owner may claim Section 48E - see solar tax credit 2026.
Related
- Solar incentives by state
- Solar tax credit 2026: what changed
- Arizona solar incentives
- Illinois solar incentives
- Net metering explained
- Solar panel cost
- Is solar worth it?
General 2026 guidance, not tax advice. Verify current Colorado program rules before purchasing.