Is Solar Worth It in Colorado in 2026?
Complete analysis of solar costs, incentives, net metering, and payback for Colorado homeowners — without the federal ITC.
Cost Per Watt
$3.20
installed
Electricity Rate
$0.154
per kWh
Payback (No ITC)
16.4 yr
current reality
Payback (With 30% ITC)
11.5 yr
hypothetical
25-Year ROI
52%
return on investment
Incentive Breakdown — Colorado
Available incentives for a typical 7kW residential solar system in Colorado
Federal ITC (25D)
ExpiredThe federal solar Investment Tax Credit expired on January 1, 2026. No federal credit available for new installations.
State Tax Credit
NoneColorado's state tax credit for solar expired in 2015.
SREC Market
Not AvailableColorado has a community solar garden program but no traditional SREC market.
Property Tax Exemption
Solar system value excluded from property tax assessment
Sales Tax Exemption
No statewide sales tax exemption for solar
Low-Income Program
AvailableColorado offers programs to help low-income households access solar energy.
Key Incentives: Property tax exemption for solar; Low-income solar program available.
Solar Math — With vs Without Federal ITC
Cost breakdown for a typical 7kW residential system in Colorado
2026 Reality (No Federal ITC)
- System Size
- 7 kW
- Cost per Watt
- $3.20/W
- Gross Cost
- $22,400
- Federal ITC
- $0
- Net Cost
- $22,400
- Annual Savings
- $1,363/yr
- Payback Period
- 16.4 years
Hypothetical (With 30% ITC)
- System Size
- 7 kW
- Cost per Watt
- $3.20/W
- Gross Cost
- $22,400
- Federal ITC (30%)
- -$6,720
- Net Cost
- $15,680
- Annual Savings
- $1,363/yr
- Payback Period
- 11.5 years
Impact: Without the federal ITC, Colorado homeowners face a 4.9-year longer payback period — paying $6,720 more out of pocket.
Net Metering Policy — Colorado
How Colorado compensates your excess solar production
Full retail rate net metering — you earn the same rate you pay for electricity. Best case for solar savings.
Colorado mandates net metering at full retail rate for systems up to 10 kW under PUC rules.
Cost Per Watt Benchmark — Colorado
Colorado Average
$3.20/W
National Average
$3.05/W
Typical 7kW System
$22,400
Colorado's average installed cost is above the national average of $3.05/W
Breakeven Timeline
Without the federal ITC, a typical 7kW system in Colorado breaks even in 16.4 years. With the former 30% ITC, payback would drop to 11.5 years.
Without Federal ITC
16.4
years to break even
With Former 30% ITC
11.5
years to break even
Production Details
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