Solar incentives for photovoltaic systems in Colorado come from two sources: Federal government tax credits, and electric utilities. Some states have state income tax credits too but Colorado does not.
Federal Tax Credits for Solar
The most important benefit for people and businesses installing solar is a tax credit for 30% of the cost of the installation. Current Federal law allows the 30% credit for any system installed by the end of 2016. That is a dollar for dollar credit than can be used to cover income tax liabilities. Costs that can be used for the tax credit include electrical modifications needed to connect and structures for the solar panels. For example the cost of solar carport structures can generally be included in the calculation of the 30% tax credit. If a taxpayer cannot use all the credit it can be carried over to the next year.
Utility Incentives for Solar
The trend in utility incentives for solar installations is certainly down and looks as if they will drop further in the future. Just 3-4 years ago utility incentives used to cover more as much as half the cost of a solar. All utilities in Colorado at least offer net metering so that one kilowatt hour sent to the grid is worth one kilowatt hour pulled back from the grid. (Discussions are currently underway at the Colorado Public Utilities Commission regarding whether investor owned utilities will be required to continue to offer net metering for customer installed renewable energy systems.) Below are some Colorado utilities with whom we have experience and the solar incentives they offer for grid-tied solar systems to their customers:
Xcel Energy Solar Rewards Incentives
The largest electric utility on Colorado is investor owned Xcel Energy. Under the direction of the Public Utilities Commission Xcel currently offers what are called Production Based Incentives (PBI). Its 2014 incentives are running out in December 2014. But we expect them to offer a new round of incentives in about Feb 2015. Xcel plans to offer a PBI of 2 cents per kilowatt hour produced by newly installed systems for a period of ten years. This can amount to a few thousand dollars over ten years.
Xcel Energy incentives for commercial solar for systems of greater than 25 kilowatts (KW), which is about 100 solar panels, up to 500 KW are about to be restored at rather generous levels. Reports are that the new PBI will be at 5 cents per kilowatt hour produced for at least 10 years and perhaps 20 years. These payments significantly improve the rate of return for solar electric installations. This can also help compensate those Xcel commercial customers who might still have demand charges even after installing commercial solar electric systems.
The United Power Electrical Cooperative currently has an incentive of 40 cents per Kilowatt for photovoltaic installations up to a maximum of $1800. United Power also offers a wind generator incentive of up to $1050.
Ft Collins Utility
The Fort Collins Utility offers an incentive of $1.00 per watt for the first three kilowatts of DC solar power installed so this amounts to $3000 for three kilowatts or more on residential solar systems and up to $20,000 for commercial solar systems up to twenty kilowatts. The incentive is limited and not always available so it can be important to get applications in as soon as incentives are made available.
Colorado Springs Utility
The Colorado Springs utility offers some of the most generous incentives in Colorado. They offer up-front payments which are calculated using a formula that takes into account the efficiency of the system. Please check with us at Golden Solar for details and for how to calculate the expected incentive for your residence or commercial establishment.
Black Hills is the other investor owned utility in Colorado so it is also under the direction of the Public Utilities Commission. It has offered Performance Based Incentives (PBI) in the past and may again if ordered to do so by the PUC. It does still offer net metering.
Highline Electric Association
HEA has offered solar incentives. Check with them or with us for latest information on HEA solar incentives.
Morgan County Rural Electric Association
MCREA does not offer any financial incentives to its members for installing solar, other than allowing net metering.
Intermountain Rural Electric Association
IREA does not offer any financial incentives to its members for installing solar other than allowing net metering.
As always feel free to contact us at Golden Solar for the latest information on utility solar incentives and utility requirements for grid-tied solar electric systems.