Solar Installation Costs
In 2020, homeowners typically spent between $10,000 and $20,000 to buy a solar panel system, but it may cost more or less depending on incentives, the size of your system, the type of equipment you install, and the company you move forward with.
There are a number of websites that offer a more detailed snapshot and comparison what a solar energy system is likely to cost you based on where you live.
Incentive Programs
There are currently no state-wide incentives for solar. See the Colorado Energy Office for the latest details.
Federal Investment Tax Credit
The Investment Tax Credit (ITC) allows you to deduct 30% of the install costs of your solar energy systems from your federal taxes. The process for claiming the tax credit is straightforward, requiring the completion of the 2-page IRS Form 5965, but not everyone is eligible. LPEA recommends consulting with a tax accountant to verify eligibility.
Form: IRS Form 5965 Instructions: Instructions for IRS Form 5965
The Investment Tax Credit (ITC), claimed as the Residential Clean Energy Credit, allows you to deduct 30% of the installation costs of your solar energy system from your federal income taxes for systems placed in service by December 31, 2025, under current law.
For systems that are leased or third-party owned, related commercial clean-energy tax credits may instead be claimed by the system owner and reflected in your lease or power-purchase pricing. To qualify for this tax credit under current law, the system must be placed in service by December 31, 2027.
On-Bill Financing
To help members invest in energy efficiency and solar PV projects, LPEA, in partnership with First Southwest Bank, offers an On-Bill Financing Program. This program allows you to apply for a low-interest loan to finance your projects and then repay that loan monthly overtime on your LPEA electric bill.
Leased Systems
If you’re considering a third-party leased solar system, be sure you understand what you’re signing up for. With a lease (or similar third-party ownership agreement), you typically do not own the equipment, which can affect your ability to claim certain incentives. Leases may also limit your control over system design, maintenance, and repairs, and could require certain actions of you. Before you agree, ask for the full contract terms in writing—including the length of the agreement, monthly payment schedule, annual escalators, production guarantees (if any), what happens if the system underperforms, buy-out options and any fees for early termination. Also confirm how a lease could impact a future home sale (for example, whether a buyer must assume the contract or whether you must buy out the system.
Solar Billing
Here is a guide to help you better understand how you will be billed as a net metered member of LPEA.
Financial & Economic Analysis
After you get quotes from qualified installers, you can use this tool from the Colorado State University Extension Office to evaluate the long-term financial impacts of purchasing a solar PV system.