Colorado · Tax exemption · Deep-stack program
CO Renewable Energy Sales Tax Exemption
Removes a tax burden residential solar owners in Colorado would otherwise carry -- see what it covers, eligibility, and payback impact below.
- Sales tax exemption
- stated benefit
- Residential
- eligible customers
- 12.3 yr
- Colorado baseline payback
- 4
- other Colorado programs
Deep-stack program · mid directory
Colorado runs a 5-program DSIRE stack; this tax exemption is one layer on a 12.3-year modeled baseline, not the whole story.
- Stack5 programs
- In-state #2/4
- Type #5/45
- Baseline12.3 yr
In-state directory place #2 of 4 (mid alphabet). National tax exemption directory #5 of 45. Amounts and eligibility change; verify with the official program page before relying on a dollar figure. Informational only - not financial advice. See our disclaimer.
Program description
Solar energy equipment is exempt from Colorado sales and use tax.
Program at a glance
- Program type
- Tax exemption
- Eligible customers
- Residential
- Stated benefit
- Sales tax exemption
- State electricity rate
- 14.2¢/kWh
- Colorado solar score
- 45/100
Solar's trajectory in Colorado
The market this incentive operates in: total installed solar capacity in Colorado reported to the EIA.
Colorado's solar incentive stack
How this tax exemption sits among Colorado's 4 tracked programs, by type
- Tax exemption
Tax exemption
2 programs
- Net metering
Net metering
1 programs
- Performance
Performance
1 programs
What this shows Colorado tracks 3 incentive types; 2 are tax exemptions like this one, removing a cost solar owners would otherwise carry, on top of the state's other program types.
How this tax exemption layers inside Colorado's deep stack
The CO Renewable Energy Sales Tax Exemption removes a tax burden solar owners would otherwise carry, one of Colorado's DSIRE-tracked solar incentive programs. Eligibility is scoped to residential customers, with a stated benefit of Sales tax exemption. DSIRE lists no scheduled sunset, though enabling legislation and appropriations can still be revised year to year.
That baseline is slower than most states, which raises the stakes for every incentive on the table. Colorado averages 5.5 kWh/m²/day of usable sunlight and residential rates of 14.2¢/kWh, producing an estimated 9,636 kWh/year and $1,368 of annual utility offset on a typical 6 kW system costing $16,800. That baseline already implies a 12.3-year simple payback and a 25-year modeled net of roughly $17,400 before this incentive - every dollar this tax exemption delivers compresses that payback further.
Colorado bundles a deep incentive stack, so this program rarely stands alone. Colorado has 5 solar incentive programs indexed in DSIRE, including adjacent options like CO Residential Renewable Energy Property Tax Exemption, CO Net Metering, Xcel Energy Solar*Rewards. The state's net-metering policy is classified as full, which governs how excess generation is credited and often decides whether a given program is worth claiming for a specific household.
Other Colorado incentives
Frequently asked questions
Where does the CO Renewable Energy Sales Tax Exemption sit in Colorado's deep program stack?
How does this tax exemption work beside Colorado's other programs?
Who is eligible for the CO Renewable Energy Sales Tax Exemption?
How does this incentive affect solar ROI in Colorado?
Which other Colorado programs stack with this one?
Incentive data from the DSIRE (Database of State Incentives for Renewables & Efficiency); state solar economics from NREL and the U.S. EIA. See our methodology · Colorado solar data · ROI calculator · All incentives.