Solar Incentives and Rebates in Colorado (2026): Tax Breaks, Utility and City Programs

Solar incentives in Colorado no longer include a big statewide rebate, but homeowners still get real help: no state sales tax on most solar equipment, no property tax on a home solar system, and net metering that credits your exports. On top of that, some utilities and cities pay rebates, and Xcel Energy and the state offer extra money for income-qualified households and batteries. Here is what is current as of November 2026.

• Colorado exempts solar modules, inverters, racking and wiring from state sales and use tax, but not labor or batteries, and many cities and counties still charge their own sales tax.
• A homeowner-owned solar system is exempt from Colorado property tax, and credits and rebates under the state's net metering law do not count as income for that purpose.
• The federal 30% residential clean energy credit (Section 25D) is not allowed for expenditures made after December 31, 2025, and a solar expenditure counts as made when installation is complete.
• Colorado's 10% income tax credit for home battery storage covers tax years 2023 through 2026, so a battery has to be bought in 2026 or earlier to count.
• Local rebates exist in places like Fort Collins and Boulder, and Xcel offers larger incentives to income-qualified customers.

What solar incentives does Colorado offer in 2026?

Colorado's help for rooftop solar comes in layers. The state handles taxes. Your utility handles net metering and any rebates. Some cities add grants. The table below sums up the main programs we verified in November 2026.

If you only remember one thing, remember that there is no statewide cash rebate for a typical household. Most of your savings will come from lower bills, the tax breaks and, in some towns, a local rebate.

Colorado sales tax and property tax breaks for solar

The sales and use tax exemption

Colorado law (C.R.S. 39-26-724) exempts components used to produce energy from a renewable source. The Department of Revenue's guidance, revised in October 2026, lists solar modules, trackers, racking, inverters, wiring and control systems as qualifying items.

There are two catches. First, the exemption does not cover labor, energy storage devices or remote monitoring systems. Second, it applies to state sales tax and to some special district taxes, such as RTD and the Scientific and Cultural Facilities District, but not to city or county sales taxes the state collects unless that city or county adopted the exemption. Home-rule cities set their own rules. Ask your installer to show which taxes are on your quote.

The property tax exemption

Under C.R.S. 39-3-102, an independently owned residential solar electric system is treated like household furnishings and is exempt from property tax. The statute says rebates, offsets, credits and reimbursements under C.R.S. 40-2-124, the law that sets up net metering and utility solar rebates, do not count as income, so a normal home system keeps the exemption. That means adding solar should not raise your property tax bill the way a new deck or addition might.

Federal solar tax credit status for Colorado homeowners

For years, the biggest solar incentive in Colorado was federal. That has changed. The IRS says the residential clean energy credit is not allowed for expenditures made after December 31, 2025. The IRS's August 2025 guidance adds that an expenditure counts as made when installation is complete. For solar, that means a system finished in 2026 does not qualify for the old 30% credit.

So if you are getting quotes now, ask installers to show your payback without the federal credit. Older sales materials that still subtract 30% will make the numbers look better than they are. Our guide to solar savings without the federal tax credit walks through how to redo the math.

Utility solar incentives in Colorado: Xcel, Black Hills and others

Xcel Energy

Xcel is the largest electric utility in the state. Its Solar*Rewards program now focuses its biggest incentives on income-qualified customers and those in disproportionately impacted communities. Under a settlement the Colorado Public Utilities Commission approved in a written decision on April 7, 2026, the residential incentive for those customers in the 2026-2027 Renewable Energy Plan rose to $3 per watt. The same settlement raised Xcel's Renewable Battery Connect incentive for income-qualified customers to $1,000 per kilowatt.

Renewable Battery Connect also has a standard track for other customers, but the amount has changed over time. Check Xcel's current program page before you count on a figure.

Black Hills Energy and co-ops

Black Hills Energy is another investor-owned electric utility in Colorado. We did not find a current cash rebate for its residential solar customers, so its main benefit is net metering. Rural co-ops and city utilities, such as Holy Cross Energy or United Power, set their own solar and battery programs. Call your co-op directly, because these programs change often.

For more on how credits work, see our explainer on net metering in Colorado.

Local solar rebates and grants in Colorado cities

Some Colorado cities run their own electric utilities or climate programs. Two examples we verified:

• Fort Collins Utilities: For 2026, the city pays $300 per kW-DC for solar, up to $1,500, and $300 per kWh for batteries, up to $6,000. The combined cap is $7,500. You must use a Participating Solar Contractor, install within six months of your reservation letter, and sell the system's renewable energy credits to the city for 20 years. DIY systems are allowed but do not get the rebate.
• City of Boulder: Income-qualified residents can get a grant of $1 per watt, up to $8,000 and no more than 50% of project costs after other incentives. For example, the limit for a four-person household is $121,800 in gross income. Grants are first come, first served while funding lasts, and the city's page does not say how much is left for 2026, so check before you sign.

In western Colorado, Energy Smart Colorado works with local governments in more than a dozen counties, including Summit, Eagle, Pitkin and Routt. The Vail Daily reported in early 2026 that eligible households can get rebates for solar that vary by county. If you live outside these areas, search your city and county websites or ask your utility.

Battery storage tax credit and income-qualified help

Colorado has a state income tax credit equal to 10% of the purchase price of a residential energy storage system (C.R.S. 39-22-546). A legislative evaluation says it is available for tax years 2023 through 2026, with an expiration date of January 1, 2027. The credit applies to the tax year of purchase and is based on the price of the equipment, not installation labor or permit fees. If you are thinking about a battery, the timing matters: buy it in 2026, or plan without the credit. A credit you claim yourself cannot be refunded or carried forward. You can instead assign it to the seller at the time of purchase, and the seller must pass the full value to you as a discount, but the same evaluation found that none of the four installers it interviewed accepted assignment.

For lower-income households, the picture is mixed. Colorado's Solar for All program, funded by a $156 million federal grant, is on hold. The Colorado Energy Office says the EPA terminated the national program in August 2025 and that Colorado's attorney general joined a multistate lawsuit on October 16, 2025. Its single-family 100% subsidy was still listed as on hold when we checked in November 2026. Xcel's income-qualified Solar*Rewards incentive and local grants like Boulder's remain the main options.

How to apply for Colorado solar incentives

1. Check your utility. Find out whether you are served by Xcel, Black Hills, a co-op or a city utility. That decides your net metering rules and rebates.
2. Reserve before you build. Programs like Fort Collins' rebate and Xcel's incentives need approval before installation. Do not sign off on construction until your application is approved.
3. Get itemized quotes. Make sure state sales tax is not charged on exempt equipment, and see how local tax is handled.
4. Keep your paperwork. Save invoices for the battery storage credit and any assignment form if your installer claims it.
5. Compare more than one installer. Prices and incentive handling vary. Run each offer through our solar quote checker.

Is solar still worth it in Colorado without the federal credit?

It can be, but it depends on your usage, your roof and your utility. Colorado's sunshine helps production, and the sales and property tax breaks cut costs a little. Xcel's time-of-use rates, with on-peak hours from 5 to 9 p.m. on non-holiday weekdays since November 1, 2025, mean a battery can add value for some homes. Without the federal credit, though, payback periods are longer than they were in 2025.

Check typical sizes and output on our Colorado solar panels page, and see where your bill stands on our Colorado electricity rates page. Higher bills generally mean faster payback.

Next steps

Start by confirming your utility and any local rebate. Then gather two or three quotes and test them with our solar quote checker so you know the price and savings claims hold up before you sign.