Cost of solar panels in Colorado

How much do solar panels cost in Colorado?

Installing residential solar panels can cost between $10,000 to $30,000 or more, though individual costs vary. On average, residents of Colorado pay $20,176 before using the federal tax credit for their systems. Anecdotally, Jennifer in Golden paid $18,000; on the higher end, William in Grand Junction paid more than $20,000 to go solar.

The size of your system plays a big factor in your overall costs. Not surprisingly, the smaller your system, the less you pay. The average size of solar systems in Colorado is 7.5 kilowatts (kW).

Not sure what size system you need? First, find out the amount of electricity you used in the last year in kilowatt-hours (kWh). You’ll find this information through your electric account dashboard online. Then divide your annual kWh by 1,200 to find the system size you need.

For example, the typical Colorado household uses 8,448 kWh per year. Using this formula, the typical household would need a 7-kW system.

» WATT’S THE DIFFERENCE? kW vs. kWh

Average cost by system size in Colorado

Are solar panels worth it in Colorado?

Solar panels can be a great investment in Colorado. The state gets plenty of sunshine, especially in places like Pueblo, Denver and Alamosa, and you get increased solar radiation at higher altitudes.

Lots of happy solar customers in Colorado tell us about significant savings on their electric bills. For example, Paul in Colorado Springs said his electric bill is only $14 per month. Bryan in Denver is only paying $4 now.

Colorado receives an average of 5 to 6.5 peak sun hours a day.

It doesn’t work out for everyone, particularly if a lot of your utilities currently run on gas. Charnay in Brighton says it was a mistake going solar because it didn’t help to reduce her gas bill.

“Instead of having a cheaper electric bill, I now have a regular gas bill, United Power bill — not a $20 bill like they tell you,” she said. “It's $106, around that range, and now a Mosaic bill that you purchase your panels through.”

If your house is a good candidate for solar panels, making the switch now is a smart way to protect yourself against rising energy costs in the future.

» STILL NOT SURE? Solar energy pros and cons

Cost factors of going solar in Colorado

Going solar is an investment, and, like with any investment, it's important to know what you're getting into. From the equipment to the roof over your head, many factors affect how much you end up paying.

Solar equipment costs

Solar panels aren't the only thing you're buying. You'll also need inverters, mounting hardware and potentially a solar battery if you're thinking of storing extra energy. All these pieces add up, so make sure you're considering the whole package when you're budgeting. Here are a few common equipment costs:

Solar panel efficiency

Some solar panels are more efficient at converting sunlight into electricity than others. This is called solar panel efficiency. Panels with higher efficiency ratings cost more, but you could save money in the long run. It's worth weighing the upfront cost against the long-term savings.

» COMPARE: Most efficient solar panels

Size of your system

Speaking of the number of panels, the size of your system is a big deal. The larger the system, the more it'll cost. But size isn't just about the number of panels: It's also about their weight. Your roof has to be able to handle that load, which brings us to our next point.

» POTENTIAL ENERGY PRODUCTION: How many kWh does a solar panel produce?

Condition of your roof

Quality solar panels can last up to 30 years, so your roof better be up for the long haul, too. If it's not, you'll end up paying extra to remove the panels, fix or replace the roof and reinstall the panels. It's a headache you don't want, so get a roof inspection to make sure it’s ready for your system.

» SHOULD YOU? Replace your roof before going solar

How you pay

Purchasing your solar panels upfront is ideal, but not everyone has the money to do that. The good news is you can finance your solar power system. Just keep in mind that solar loans come with interest charges that increase the overall cost.

Leasing or entering a  power purchase agreement (PPA) are options to get the system installed for little or no down payment, but you won't own the panels and won’t qualify for the federal solar investment tax credit.

If you are considering a solar loan, lease or PPA, always ask:

• Is there a down payment?
• How much will I pay per month?
• Will monthly payments increase, and by how much?

» SOLAR PANELS: Lease vs. buy

Local permits and fees

Don't forget the paperwork. Most places require permits to install solar panels, and those aren't free. You might also face some other local fees, so make sure you're factoring those into your budget.

Other cost factors

Solar panels are pretty low-maintenance, but that doesn't mean they're no-maintenance. You might need to shell out for repairs, replacements or just a good cleaning.

Solar incentives, tax credits and rebates in Colorado

The average ITC value in Colorado is $6,053 in 2023.

The federal solar investment tax credit (ITC) is the biggest factor in reducing the cost of going solar in Colorado. If you install a residential solar panel system by the end of 2032, you can deduct 30% of the system's total cost — including equipment, labor and permits — from your federal taxes. The credit drops to 26% in 2033 and 22% in 2034.

Colorado also offers tax incentives, rebates and affordable solar loan programs to make going solar easier. For example, residents installing solar are exempt from state sales and property taxes. Many incentives are also offered through your local power companies.

» EXPLORE: Colorado solar incentives

Compare solar installation companies in Colorado

Compare popular solar companies available in Colorado below. Read our guide to finding the best solar companies for more information.

» TIPS: Tips for getting the best solar quotes

Bottom line

Colorado is ranked as one of the top 25 most green states. This is partially due to the great solar incentives the state offers and the low cost of solar for residents. Overall, Coloradans will pay around $14,123 after the ITC and can save around $14,479 over the next 25 years on a new solar system.

Solar costs: Colorado vs. nearby states