Are you considering upgrading to solar power in Colorado? If so, there are many Colorado solar incentives and solar tax benefits that you may be eligible for! At EcoMark Solar, we are always happy to chat with any interested parties in Colorado about solar tax benefits and incentives. And we always make sure that our customers qualify for those benefits as well. As such, we’ve developed this outline of current tax incentives, benefits, and solar rebates in Colorado that your installation may be eligible for.
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Don’t Forget About Your Federal Solar Tax Credit
All homeowners and business owners in Colorado who go solar can make use of the Investment Tax Credit (ITC) offered by the U.S. federal government. This tax credit is percentage-based and there’s no cap on the amount of your return. In addition to the rebates you may be eligible for in Colorado or any state tax benefits, the ITC alone can make a significant difference for you during tax season.
How Does the Federal Solar Tax Credit Work?
The ITC is a one-time, non-refundable tax credit that you receive when you file your taxes for the year that your solar system was installed.
Originally, the federal solar tax credit was set to expire in 2021, but it was extended until the end of 2023. Through the end of 2022, the tax credit is 26% of the system cost. In 2023, that percentage will drop to 22%.
The ITC is one of the best solar tax benefits in Colorado and across the country and there is currently no legislation to extend the ITC into 2024. Don’t let the ITC slip through your fingers.
Once your solar system is installed, your solar installer will give you a receipt for the total cost of your system. If you can’t realize the full value of your credit in the first year of your installation, you may be able to roll it into subsequent years to reduce your future tax burden.
As stated in the tax code, taxpayers are only eligible for the tax credit once the system has been “placed in service.” This means that your home’s solar array must be fully installed by the end of the tax year to qualify for the ITC. So, if your solar installation began in 2022 and was completed the following year, you could only claim the ITC during the 2023 tax season.
Solar Batteries Are Eligible for the Federal ITC
If you install a battery system at the same time as your solar panels, you can roll the storage costs into your federal solar tax credit (assuming the battery is charged entirely by solar power). In fact, if you already own a solar system and can retrofit your solar array with battery storage, then you take the full tax credit for the cost of your battery installation (IRS).
Local Colorado Solar Incentives
The solar industry is constantly changing in the U.S. That means solar incentives and solar rebates in Colorado come and go over time. As a homeowner, it’s in your best interest to act now, so you don’t lose out on amazing potential savings for your energy needs.
Most of Colorado’s solar incentives come from local municipalities and utility companies. For instance, Xcel Energy has aggressive goals to expand solar and wind energy and they offer residential solar rebates in Colorado for homeowners.
The Xcel Energy Solar*Rewards Program is a great energy rebate program in which you receive payments in exchange for Renewable Energy Credits for the energy produced by your solar system. Other similar programs are available through other utility providers.
Fort Collins Utilities offers a cash incentive to homeowners when they go solar. In fact, residential customers can apply for rebates of up to $1,000 for a solar PV installation.Colorado Springs Utilities offers a similar rebate program for its customers. Depending on your solar installation, up to 40% of your system costs could be covered by the rebates and tax credits offered by Colorado Springs Utilities.
There are other solar rebates in Colorado and tax benefits that you may qualify for. All of these programs will greatly reduce your solar energy costs and make your path to energy independence much more attainable.
One last thing to remember: There is no sales tax when buying a solar system in Colorado! If you’re interested in going solar, there’s never been a better time than today.
Leverage These Colorado Solar Tax Benefits, Rebates, and Incentives
At EcoMark Solar, we have been in the Colorado solar industry for over 11 years. Throughout our experience, we have gained a detailed understanding of all the rebates, tax credits, and benefits that still exist among utility companies and local governments. This knowledge will help ensure that you receive all possible tax credits and benefits so that your solar installation is affordable and accessible.
Schedule an appointment with EcoMark Solar today to take advantage of the solar tax credits, benefits, and rebates that are still available for you.