Cost of solar panels in Colorado (2025)

How much do solar panels cost in Colorado?

With professional installation, a typical 8-kilowatt residential solar panel system in Colorado costs $22,674. That price drops to $15,872 after considering the full federal solar investment tax credit (ITC). Anecdotally, Jennifer in Golden, Colorado, paid $18,000, and William in Grand Junction, Colorado, spent around $20,000 to go solar.

The size of your solar panel system is a big factor in your overall solar costs. The average size of solar systems in Colorado is 4.9 kW (kilowatts). Depending on your household energy usage, you might need a smaller or larger system. As you can see, the cost difference between a 6-kW system and a 7-kW system is thousands of dollars.

The table below doesn’t include the cost of a solar storage battery, which sometimes costs as much as the panels. Solar batteries are a must if you want real energy independence, especially if you go off-grid. Permitting, utility fees and maintenance also add to the cost of going solar.

Average solar panel 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, where solar radiation is better at higher altitudes.

Lots of residents tell us about significant savings on electric bills. For example, Paul in Colorado Springs said his electric bill is only $14 per month, and Bryan in Denver only pays $4 since going solar.

Homeowners with solar panels typically save $20,000 to $90,000 over 25 years.

But it doesn’t work out for everybody. For instance, Jennifer in Golden got stuck with a system that doesn't offset her utility bills enough. Now, Jennifer’s monthly energy bills are higher than before and she can’t get out of an $18,000 contract. Also, this may seem obvious, but you get the most out of solar panels when the majority of your house runs on electricity (as Charnay in Brighton found out too late). Still, if your house is a good candidate for solar, it’s worth considering if you like the idea of lower monthly utility bills and more energy independence.

We suggest using the National Renewable Energy Laboratory's PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery.

» STILL NOT SURE? Solar energy pros and cons

Solar system cost factors in Colorado

Going solar is an investment, and, like with any investment, it's important to know what you're getting into.

The equipment — solar panels, inverters, mounting hardware and other electrical accessories — is typically the largest portion of your overall total costs (approximately 25% to 50%). Labor, which includes planning, preparing and connecting your system to the grid, accounts for 10% to 30%. Local permits and fees are a small part of your overall costs.

Solar equipment

Solar arrays also contain mounting equipment, wiring and other devices, such as inverters, batteries or a monitoring system. 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 panels: In general, monocrystalline panels are considered the best bang for your buck. Cheaper solar panels are typically polycrystalline. The difference comes down to efficiency and materials: Monocrystalline panels are made from pure, single silicon crystals; various silicon fragments melted together are used to make polycrystalline panels.
• Solar batteries: A battery stores energy for later use. It’s a must if you want real energy independence, and they sometimes cost as much as the panels. Prices often depend on the battery’s storage capacity, life span, brand and other factors. Expect to pay between $7,000 and $18,000, though some cost $30,000 or more.
• Solar inverter: Inverters convert the electricity generated by your solar panels from direct current (DC) to alternating current (AC). Inverter costs usually range from $1,000 to $3,000.
• Monitoring system: Some companies include a solar monitoring system to track how much energy your system produces and if there are any problems. If not, you can buy a stand-alone system for $80 to $400.

Size of your system

The cost difference between a 6-kilowatt system and a 7-kilowatt system is thousands of dollars. To estimate what size system you need, first look up how many kilowatt-hours (kWh) you used last year on your electricity bill. Divide that number by 1,200. This will be roughly the system size you need. For example, if your home used 15,000 kWh last year, you would need a 12.5-kW system.

» WATT’S THE DIFFERENCE? kW vs. kWh

Condition of your roof

Quality solar panels should last 25 to 30 years, so you need your roof to last just as long. Otherwise, you’ll have to pay to remove the panels, fix your roof and reinstall them again. This is a frustrating and expensive process you should avoid if you can.

ConsumerAffairs often hears from disgruntled reviewers who felt blindsided by expensive roof repairs needed after their solar panel installation was complete. If you want to ensure a seamless and cost-effective solar journey, your roof must match the system's longevity. Get your roof inspected, fixed or replaced before going solar.

Local permits and fees

Permits and interconnection fees, though relatively cheap, are worth mentioning. In the legislative session of 2023, the Colorado General Assembly enacted a bill aimed at standardizing and streamlining the permitting procedures across the state. This legislation stipulates that the maximum fee municipalities can levy on homeowners for such permits shall not exceed $500.

Good solar companies will often handle permitting on your behalf. You can also contact your municipality’s building department directly for accurate information.

What to know about solar panel efficiency

You’ll hear installers talk about how “efficient” their panels are. Solar panel efficiency is a measure of how well a panel makes electricity. The more efficient the solar panels you buy are, the fewer panels you need. While more efficient panels cost a little more, you save by buying fewer panels.

Solar incentives, tax credits and rebates in Colorado

Solar incentives in Colorado are relatively generous. Residents can take advantage of local property exemptions and sales tax exemptions. There are also several solar rebates: Energy Smart Colorado, San Miguel Power Association, Switch Together Denver and Holy Cross Energy offer rebates for customers who invest in solar equipment. Plus, Xcel Energy customers can earn performance-based incentives after their solar installations are complete.

The federal solar investment tax credit (ITC) is another big incentive for most homeowners. The ITC credits 30% of the system’s total cost — including equipment, labor and permits — toward what you owe on federal income taxes.

Don’t get confused: The ITC is not a rebate or a refund. It is a credit that goes toward what you owe on federal income taxes the year your system becomes operational. Any unused portion of the credit rolls over into future tax years.

For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If you owe $15,000 in taxes, the credit reduces your debt to $12,000. The ITC only offsets your tax liability; you can't take advantage of it if you don’t owe taxes in the first place.

Federal solar tax credit expires at the end of 2025

The ITC is now set to expire at the end of the year, much earlier than previously scheduled. The credit was expected to drop gradually, then fully expire in 2035 — but those future step-downs have been eliminated under the “One Big Beautiful Bill,” signed in July of 2025. This means you have until Dec. 31, 2025, to install and pay for a system to qualify for the 30% credit.

How can I pay for solar panels in Colorado?

Affordable financing makes the upfront costs of solar more manageable, and most solar leases let you start saving from day one with little or no money down.

• Loan: The Residential Energy Upgrade (RENU) loan program is available statewide. Fort Collins Utilities customers can borrow up to $50,000 to pay for energy efficiency upgrades, including solar panel and battery systems. A similar program through Elevations Energy is available in Boulder and Denver.
• Lease: Leasing solar panels is a great way to set up a system without the high upfront costs. A potential downside is that you are not eligible for the same tax incentives.
• Power purchase agreement: A solar power purchase agreement (PPA) is similar to leasing. A solar developer buys, installs and maintains solar panels on your property. You buy the power generated by the system on a per kilowatt-hour (kWh) basis. It’s a fixed price, and the cents/kWh is usually cheaper than the utility’s rate for the same amount of electricity.

» SOLAR PANELS: Lease vs. buy

Compare solar companies in Colorado

We compared ratings and reviews, equipment options, warranties, availability and other factors to pick the top solar companies in Colorado.

Bottom line

Residential solar panel system costs typically fall between $10,000 and $30,000 or higher, depending on factors like the system's size, local labor rates and available incentives. Colorado homeowners with solar panels can typically save more than that in total avoided energy costs over the lifetime of a system.

The ConsumerAffairs Research Team has conducted extensive research to compare the costs of going solar in Colorado and other states.

Solar costs vs. savings: Colorado and nearby states