Solar in Colorado: is it worth it in 2026?
Colorado is a good state for solar: most homes that buy a system get their money back in about a decade. Three things decide that: electricity prices rank 23rd of 51, it gets more sun than most states (6th), and exported power earns full retail credit. Of the 51 states and DC, Colorado has the 13th-fastest payback for a typical home.
The average home here pays about $103 a month for 658 kWh. A 4.5 kW system sized for that home would knock about $1,126 off the first year's bills, 91% of the total.
Checked November 12, 2026
What makes solar pay off in Colorado
- Size the system to cover your yearly use. With full net metering, power you export is worth as much as power you use, so timing matters less than in most states.
- The price per watt decides it. At 15.7¢ per kWh, the price per watt matters as much as the sun. At $3.34 per watt, the high end of what companies quote, payback for a typical system here stretches to 14 years.
- Lots of sun. Each kW of panels makes about 1,595 kWh a year here, so a smaller system covers more of your bill than in most states.
Payback by system size
An average Colorado home uses about 7,896 kWh a year. Here's how systems sized to cover part or all of that work out, bought with cash at $2.57 per watt:
| Covers | Size | Price | Makes a year | Payback | 25-year savings |
|---|---|---|---|---|---|
| 51% | 2.5 kW | $6,425 | 3,988 kWh | 10 years | $10,958 |
| 71% | 3.5 kW | $8,995 | 5,583 kWh | 10 years | $16,391 |
| 101% | 5 kW | $12,850 | 7,975 kWh | 10 years | $24,527 |
| 121% | 6 kW | $15,420 | 9,570 kWh | 11 years | $25,698 |
The 2.5 kW system pays back fastest, but the 6 kW system saves the most over 25 years. Assumes exported power earns full credit, prices rise 2.5% a year and one inverter replacement.
How Colorado credits power you send to the grid
Full credit (net metering)
1:1 retail net metering for systems under 25 kW. Xcel Energy serves most of the state.
By utility
- Xcel Energy (Colorado): 1:1 retail net metering for home systems; excess credit rolls forward or is paid out once a year at a lower rate, your choice.
Before you sign in Colorado
Check the license. Look the company up with the Colorado Department of Regulatory Agencies (electricians); general contractors are licensed by cities and counties, by its legal name or license number, and ask for the electrician's license number too.
Consumer Protection Residential Energy Systems Act, in effect since July 1, 2026:
- Covers solar leases and power purchase agreements signed on or after July 1, 2026.
In every state, the FTC Cooling-Off Rule lets you cancel a contract signed at your home until midnight of the third business day.
How to choose a solar company · Contract checklist · Before you sign
Colorado compared with its neighbors
| State | Electricity | kWh per kW | Typical payback | Exported power |
|---|---|---|---|---|
| Colorado | 15.7¢ | 1,595 | 10 years | Full credit (net metering) |
| Wyoming | 13.4¢ | 1,533 | 14 years | Full credit (net metering) |
| Nebraska | 12.1¢ | 1,423 | 17 years | Monthly netting |
| Kansas | 14.4¢ | 1,526 | 14 years | Monthly netting |
| Oklahoma | 13.2¢ | 1,542 | 14 years | Monthly netting |
| New Mexico | 14.8¢ | 1,779 | 10 years | Monthly netting |
| Utah | 13.0¢ | 1,484 | 22 years | Reduced credit (net billing) |
Questions about solar in Colorado
How long does solar take to pay for itself in Colorado?
About 10 years for a typical 4.5 kW system bought with cash at the 2026 median price of $2.57 per watt, with no federal tax credit and one inverter replacement. A bigger or smaller system, a different price, or your own usage will change that; the table above shows other sizes.
Does Colorado have net metering?
Yes. 1:1 retail net metering for systems under 25 kW. Xcel Energy serves most of the state.
Is there a solar tax credit in Colorado in 2026?
Not from the federal government for buyers: the 30% homeowner credit ended for systems installed after December 31, 2025. For a typical 4.5 kW system in Colorado, that credit was worth about $3,470 and brought payback down to 7 years, instead of 10 years now. Leasing companies can still claim a business credit, so ask for a lease or PPA price too. Your state energy office lists any state rebates.
Is a solar battery worth it in Colorado?
Not for savings. Colorado credits exported power at the full retail rate, and storing power in a battery loses about 10% of it, so a battery saves nothing on the bill. It can still be worth it for backup during outages: a 13.5 kWh battery costs about $15,650 installed in 2026.
Is plug-in solar legal in Colorado?
Yes, under HB26-1007, up to 1,920 watts. From January 1, 2027, landlords and HOAs can't unreasonably ban kits.
How do I check a solar company's license in Colorado?
Look the company up with the Colorado Department of Regulatory Agencies (electricians); general contractors are licensed by cities and counties (dora.colorado.gov) by its legal name or license number, and ask for the electrician's license too.
More guides: What changed for solar in 2026 · Lease or buy? · Plug-in solar · Is my solar system working?
Sources: U.S. Energy Information Administration (EIA), final 2025 data: Annual State Historical Spreadsheets (Form EIA-861, released October 7, 2026) and Electric Power Annual (October 21, 2026); NREL PVWatts (National Solar Radiation Database), statewide averages; Solar Energy Nerds: net metering by state, 2026; Palmetto: Colorado utility guide; Mayer Brown: the rise of third-party solar; Solar.com: Plug-in solar, the 2026 guide; EnergySage: median quoted price, first half of 2026.