Solar in Colorado: cost, payback & incentives

Colorado ranks #8 of 51 with a composite solar score of 45/100 (Moderate). The score blends inputs from NREL and EIA: average irradiance of 5.5 kWh/m²/day, residential electricity at 14.2¢/kWh, a turnkey 6 kW installed cost of $16,800 ($2.80/W), and 4 tracked state and utility incentive programs.

On those inputs, a 6 kW array here is modeled to generate roughly 9,636 kWh/year and offset about $1,368 in annual utility spending at the state's average rate, an estimated 12.3-year simple payback (#15 of 51 for speed to break-even) and a projected +$17,400 net position over a 25-year horizon before utility-rate escalation.

Policy matters as much as physics. Colorado's net-metering framework is classified as full, which governs how exported generation is credited, and its renewable portfolio standard is: Mandatory (30% by 2030). The 4 active programs tracked in DSIRE include tax exemption, net metering and performance incentive types, each can stack to compress payback. Notable programs include Xcel Energy Solar*Rewards, PACE Financing. Note that the 30% federal residential solar tax credit (§25D) ended for systems placed in service after December 31, 2025, so state and utility incentives now carry more of the economics, confirm current federal rules with the IRS and your tax advisor.