2023 Solar Incentives Guide for Arvada, CO - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Arvada?

Source: https://www.dsireusa.org/

The term "solar incentives" refers to financial incentives put in place by solar companies and the government to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. You might be eligible for several types of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Colorado government and others from the federal government. Some solar incentives you might qualify for are:

• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
• Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your Arvada utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
• Tax Exemptions: Your solar panels may qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your home.

Federal Solar Incentives

When people think of solar incentives, federal incentives might be the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.

The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost — for panels, labor, equipment and accessories — although the percentage may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

Your local Arvada solar panel installation expert can provide more information about the ITC and how it applies to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as the Clean Energy Credit. Homeowners are now eligible for a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then begin to decrease annually until the Clean Energy Credit expires in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Arvada solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Rebates, tax credits and more might be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones, too. Incentives may be offered by the state of Colorado, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Arvada

There are many kinds of solar incentives: those provided by local utility companies, those provided by the Colorado government and those provided by the federal government, to name a few. The use of solar energy has increased enormously in the last 15 years, partially thanks to these incentives. Reaching out to your local Arvada solar panel installer is a great first step towards getting all the incentives you qualify for when you switch to solar energy.