Colorado is the Mountain West’s largest solar market. Denver and the Front Range get excellent solar irradiance (5.0–5.5 peak sun hours/day), and the state’s pro-solar regulatory environment has made Xcel Energy’s net metering program one of the more straightforward in the region.
Colorado Solar Market
Colorado has over 2 GW of distributed solar installed, with the Denver-Boulder corridor accounting for the majority. The state’s 100% renewable electricity goal by 2040 (under HB 19-1261) continues to drive favorable solar policy. Colorado also has a strong commercial solar market driven by Xcel Energy’s commercial net metering and community solar programs.
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Xcel Energy Net Metering in Colorado
Xcel Energy (Public Service Company of Colorado) serves about 1.5 million customers in Colorado, including the Denver metro area, Boulder, Fort Collins, and Pueblo. It is regulated by the Colorado PUC.
Net metering program features:
- Compensation rate: Full retail rate per kWh exported
- Residential system size limit: 10 kW (larger systems use commercial net metering provisions)
- Commercial size limit: 2 MW
- Credit rollover: Monthly; year-end excess credits expire (no cash payment)
- Standby charges: None for residential systems under 10 kW
Xcel’s retail rates average $0.11–0.15/kWh for residential customers in Colorado. The full retail-rate net metering credit makes Colorado solar economics straightforward compared to states like Arizona or California (post-NEM 3.0).
Xcel Solar*Rewards Program
Xcel periodically offers Solar*Rewards, a per-kWh incentive paid quarterly for solar production:
| Program | Current Status | Incentive Level |
|---|---|---|
| Solar*Rewards Residential | Check xcelenergy.com for current availability | $0.02–0.05/kWh when available |
| Solar*Rewards Medium (commercial) | Periodic availability | $0.02–0.04/kWh when available |
Solar*Rewards funding is allocated in budget cycles. When the current budget cycle is exhausted, a waitlist forms for the next cycle. Applications are processed in order. The incentive is separate from net metering credits.
Colorado Renewable Energy Act (CREA) Overview
CREA (Colorado Revised Statutes §40-2-124) is the foundational solar law in Colorado:
- Requires electric utilities to offer net metering for renewable energy systems
- Sets minimum system eligibility: any renewable energy system (solar, wind, small hydro)
- Requires retail-rate compensation for net excess generation
- Applies to IOUs (like Xcel), municipal utilities, and rural electric cooperatives
Rural electric cooperatives in Colorado have their own net metering programs under CREA, with rates and rules that differ from Xcel’s program. If the project is in a co-op territory (e.g., Tri-State G&T member co-ops), verify the specific co-op’s program.
Colorado Solar Incentives Summary
| Incentive | Amount | Notes |
|---|---|---|
| Federal ITC (30%) | 30% of system cost | All Colorado solar customers |
| Property Tax Exemption | 100% | Solar adds no taxable property value |
| Xcel Solar*Rewards | $0.02–0.05/kWh | When funded; check current availability |
| Community Solar Credit | Retail rate | For subscribers to community solar gardens |
Colorado’s state income tax credit for solar expired. The property tax exemption (Colorado Revised Statutes §39-3-118.5) is the main state-level benefit alongside the federal ITC.
AHJ Permitting in Colorado
Denver
- Denver Community Planning and Development (CPD) — online portal
- Solar permit turnaround: 1–3 weeks typical
- NEC 2020 adopted
- SolarAPP+ participation for qualifying systems
Boulder
- City of Boulder Building Services
- Boulder has its own electrical code amendments
- Generally streamlined residential solar process
Colorado Springs
- City of Colorado Springs Building Department
- Colorado Springs Utilities (CSU) handles interconnection, not Xcel Energy
- CSU has its own net metering program
Fort Collins
- City of Fort Collins Building Department
- Fort Collins Utilities handles interconnection
- FoCo has its own utility net metering program
Municipal and Co-op Territory
Colorado has many municipal utilities (Colorado Springs Utilities, Fort Collins Utilities, Loveland Power, etc.) and rural co-ops that are NOT served by Xcel Energy. Net metering rules for these utilities differ from Xcel’s program. Always confirm the serving utility and its specific net metering policy before writing a proposal — the economics can differ substantially.
Colorado Contractor Licensing
Colorado requires solar installers to hold a Colorado State Electrical Board license:
| License | Scope | Notes |
|---|---|---|
| Registered Electrical Contractor | All electrical work including solar | Company-level license |
| Master Electrician | Supervising electrician for the company | Individual license |
| Journeyman Electrician | Works under master electrician | Individual license |
Colorado has no separate solar contractor license. Electrical contractor licensing through the Colorado State Electrical Board is required.
License verification: dora.colorado.gov/electrical
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Frequently Asked Questions
Does Colorado have net metering?
Yes. Xcel Energy offers retail-rate net metering for residential systems up to 10 kW and commercial up to 2 MW. Credits roll monthly; unused year-end credits expire. Colorado’s net metering is one of the more favorable programs in the Mountain West.
Does Colorado have a state solar tax credit?
The Colorado state solar income tax credit has expired. The main state benefit is the 100% property tax exemption — solar installations add no taxable value to the property. The federal 30% ITC remains the primary incentive.
Who regulates solar interconnection in Colorado?
Xcel Energy interconnection is regulated by the Colorado PUC. Municipal utilities (Colorado Springs Utilities, Fort Collins Utilities) have their own interconnection rules outside PUC jurisdiction. Always confirm the serving utility before starting the interconnection process.
