For Colorado, environmental protection is one of the most important considerations of the state. It should come as no surprise then that the Centennial State is among the leaders in solar energy capacity to this day. While the residents of Colorado have been able to benefit from solar energy for almost two decades now, Colorado continues to incentivize people to go green with a strong net metering program and significant tax exemptions.

THE SOLAR TAX CREDIT IS EXPIRING SOON!

Extended renewable energy tax credits have been included in a $1.4 trillion federal spending package alongside a $900 billion COVID-19 virus relief spending bill. The solar investment tax credit (ITC), which was scheduled to drop from 26% to 22% in 2021, will stay at 26% for two more years. This means solar projects in all market segments (residential, commercial, industrial, utility-scale) that begin construction in 2021 and 2022 will still be able to receive a tax credit at 26%. All markets will drop to a 22% tax credit in 2023 so don't delay!

Net Metering

Net metering is the policy that allows people with solar to get a credit on their electric bill for the energy they produce from their solar panel system. In 2004 Colorado voters passed the country’s first renewable energy standard by public ballot, allowing the Colorado Public Utilities Commission (PUC) to adopt standards for net metering (accrediting the energy one’s solar panels produce) and interconnection with the grid in 2005.

Today, the policy of net metering allows for customers to receive a credit for every kilowatt-hour their solar panels produce at the same price residential customers are charged for electricity, up to 120% of their electricity demand for Investor Owned Utilities (e.g. Xcel Energy and Black Hills) or capped at 10 kilowatts for residential for municipal (e.g. Fort Collins) and cooperative utilities (e.g. electric cooperatives who purchase wholesale power from Tri-State or other power providers). As an example, the Yampa Valley Electric Association, an electric cooperative, provides 1:1 credit for solar up to 100% of production, and then a 3.3 cent credit for generation in excess of 100%.

Any excess production of kilowatt-hours can roll over to the next month’s bill. If the net production of electricity remains above consumption for a calendar year, then the utility must reimburse the customer if they don’t elect to roll it over. In March of 2018, solar-plus-storage systems were made eligible for net metering as well.