Living or moving to Denver? Looking to save on energy costs?
These days solar power is an increasingly popular option for homeowners. Besides the advantage of low power costs, there are all sorts of tax breaks and other payments available from the government, the state, and the power companies — if you know the system. Here’s our handy guide for Denver residents.
Let’s start with the biggie. How long will it take to get your installation costs back? Based on a 5kW installation size, it will take roughly ten years to pay for itself. That’s taking into account all rebates, incentives, and tax credits (below). Keep in mind that home solar is one of a handful of home improvements that pays for itself.
Did you know that you can claim back 30% of the cost of your solar installation against your tax bill? If not, you need our primer on the Federal Solar Tax Credit. But remember to come back to this page for the skinny on Denver’s local tax breaks.
See: Colorado Solar Information. Putting panels on your roof? Colorado’s a pretty good place to do it — especially if you’re with one of the power companies providing rebates against your installation. Xcel, the main power company for Denver, has a Solar Rewards rebate program, but it’s not open to installations bigger than 10kW, so watch out! There are some other small rebates available from Colorado localities — check RechargeColorado for initiatives in the Denver area.
Solar panels will always increase the value of your home (see solar home value). The rule of thumb is to figure your annual power bill savings and multiply by 20 — quite a tidy sum! In Denber, as in the rest of the state of Colorado, there’s state legislation in place excluding renewables from any valuation for property tax purposes. There’s also legislation rebating any state sales or use taxes relating to those panels.
Planning on selling surplus solar power back to the grid? Colorado’s a pretty good place to do it — if you’re with Black Hills. They’ll credit you at their going rate against future bills. But, even if your local Denver power company doesn’t want to pay you directly, you can deal with them via Solar Renewable Energy Credits. .
Don’t know what SRECs are? Read on.
Colorado’s utility companies are mandated by the state legislature to get a chunk of their power requirements from renewable sources by 2020. It’s no surprise that the power companies are keen to buy solar power from homeowners — the alternative is a hefty fine!
Those power companies are big outfits and it’s hard for them to deal in the small quantities of power produced by the average home solar installation. The accepted workaround is to reckon in terms of Solar Renewable Energy Credits, or SRECs. Here’s how it works.
The state credits you one SREC for every 1,000 kWh of power your system produces. A typical home installation might generate five SRECs a year. Right now they’re worth $200 each, so you can expect to make about $1,000 income each year from your system.
But how will you collect the money? Well, for most people the best solution is to sell those SRECs to an outfit like SRECtrade, who will handle negotiations with the power company. Your solar company will likely take care of all the necessary paperwork — you just sit back and wait for the checks to roll in.
Big installation? Look into the Direct Lending Revolving Loan Program. But the DLRLS is really for $100k+ systems — that’s beyond our scope.
Ask your local solar installer. The best way to get information about local tax credits may be to talk to a professional in your area. They have experience filing for various tax credits and incentives, and they’d be happy to put together a custom solar quote for your home that includes all of these factors. Get a free solar quote today.