Being one of the most active states to adopt renewable energy sources to transform its electricity sector, Colorado surely is a good place to go solar. But even now, people are skeptical if solar panels increase home value in Colorado. Let’s find out!
Do Solar Panels Increase Home Value in Colorado?
Yes, solar panels increase home value which is a major benefit of it. Colorado is one of the most popular states known for solar conversions and ranks 12th for solar adoption.
How Much Value Does Solar Add to a House in Colorado?
According to a famous real estate company Zillow, houses with solar panels sell for around 4.1% more than houses without solar panels. It means $9,274 extra for a median house.
According to research conducted by the United States National Renewable Energy Laboratory (NREL), it has been found that when a solar panel system reduces a home’s monthly power bill by $1, the value of the home increases by $20.
Do Solar Panels Increase Property Taxes?
No, solar panels, solar batteries, and other residential renewable energy equipment are exempt from Colorado property taxation.
Also Read: Can I Install My Own Solar Panels in Massachusetts?
How Many Houses Have Solar Panels in Colorado?
The state of Colorado installed more than 1,700 MW of solar power, which accounts for 4.12% of electricity used in the state. It powers more than 340,000 houses. The state completed more than 80,000 solar installations accounting for $4.3 billion.
The Centennial state ranks 14th in the United States in residential solar installations. Colorado became the 1st US state to create a renewable portfolio standard (RPS) in November 2004.
What is the Typical Cost of Solar in Colorado?
As per the data collected in June 2024, the average solar panel system costs including installation costs $3.07/W in Colorado. It reaches around $15,339 for a 5-kW system without incentives, but the price ranges from $13,038 to $17,640. With the federal solar tax credit, the price drops by 30%. However, the overall cost of your solar panel system depends on the system’s size.
Other solar incentives provided in Colorado are net metering, property tax exemption, SREC program, and sales tax exemption.
Here is a table with the estimated average solar cost by system size in Colorado.
| System size | System cost | System cost (after Investment Tax Credit – ITC) |
| 3 kW | $9,203 | $6,442 |
| 4 kW | $12,271 | $8,590 |
| 5 kW | $15,339 | $10,737 |
| 6 kW | $18,407 | $12,885 |
| 7 kW | $21,474 | $15,032 |
| 8 kW | $24,542 | $17,180 |
| 9 kW | $27,610 | $19,327 |
| 10 kW | $30,678 | $21,474 |
Find out how to calculate solar panel KWp?
How Much Do Solar Panels Save in Colorado?
On average, a residential rooftop system generating 9,600 kWh per year could save around $1,403. This is because the average residential electricity rate in Colorado is 14.61 cents per kWh, according to US EIA.
A 9.23 kW solar panel system is needed to meet the needs of an average Colorado home. However, with incentives and federal solar tax credits, more than 30% of costs are brought down.
With Federal Solar Tax Credit – A 6-kW solar system in Colorado costs around $16,920. With a 30% federal solar tax credit, it drops to $11,844. This way, annual energy savings could be around $1,403.
With Upfront Cost – Over their lifespan, solar panels will save you a lot of money, but still, upfront costs are not low.
Cross-Reference: How much savings with solar panels?
How to Pay for a Solar Panel System in Colorado?
There are various financing options to pay for a solar system in Colorado. Some easy ways to pay for solar panels are as follows:
Important – One major condition here is to pay your taxes for the year when you install the panels. This enables you to get the benefits of solar tax credit. It is an important factor in the solar payback period too.
1. Cash – It is an easy approach if you have ready cash in hand with you.
2. Home equity – Various financial institutions offer home improvement loans known as lines of credit (HELOCs) and home equity loans. These types of loans are useful for any purpose and are a good option for solar projects.
3. Personal loan – It can also be an option to take a lump sum amount to get things done and then pay off in installments. Between home equity and personal loan, the latter is unsecured, and often the property is at risk. It is important to go through the terms and conditions before entering into any contract or taking any loan.
4. Power Purchase Agreement (PPA) or Lease – Some solar companies offer to lease your solar system or help you get into a PPA. However, if you lease the system, you won’t be the owner and just pay for the amount of energy used by the system.
With a PPA you can buy the power generated from the solar company to power your house. The price thus paid is lower than the retail rate of a local utility company.
Important – Not all incentives and credit facilities are available with a lease or PPA.
5. Solar loan – Your solar installer already has things set up with a bank or other financial institutions to offer solar loans. It is similar to how we take other consumer durable loans.
To conclude, solar panels do increase home value in Colorado but without increasing property tax. However, with various payment options, you can easily make the transition and enjoy savings for many years to come.
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