Renewable Energy Technology Incentives in Colorado | The Renewable Energy Hub USA

Renewable Energy Technology Incentives in Colorado


The state of Colorado is one of the leading lights in the renewable energy race and offers a wide range of incentives to both residential and business premises. Wind energy takes up the largest percentage of renewable production in the state, accounting for 13% of the electricity generated. Solar too is thriving and Colorado is ranked ninth in the US with 430 MW of capacity currently installed.

Colorado were one of the first states to define a renewable energy standard which dictated how much energy utility companies needed to get from sources such as solar and wind in the future. They have been bolder than many other states, requiring that 30% of energy needs should come from renewables by 2020. It’s a target that both the utility companies and the general public have happily bought into.

They have a thriving solar industry that employs some 4,200 people across 388 companies and a total of $212 million was invested in solar PV in 2014. Community solar is also a big thing in the state with many taking the opportunity to invest in medium sized installations that not only benefit the local neighborhood but also increases renewable capacity.

Solar PV Incentives in Colorado

As with other states in the US, Colorado benefits from the Federal Tax Rebate that reduces the cost of a solar installation by 30%. On top of that, the state provides around 40 different incentives with 10 utility companies offering their own. These include:

Solar PV Case Study in Colorado

With so many incentives on offer, ROI for solar in Colorado is pretty good. A lot will depend on who your utility provider is and where you are located. In simple terms the cost of a 5 kW installation will be around $17,500, much lower than in many other states in the US. With your Federal Tax Rebate that cost will be $12,250 and the amount of profit you will make over the 25-year lifetime of the array should be around $22,300. There’s also the small matter that it will add about $18,000 onto the value of your home. All in all, Colorado is one of the best places for residential and commercial solar in the United States.

Solar Thermal Incentives in Colorado

Solar water heating is expanding across the state and a business that was once worth $16 million is expected to grow to $677 million by 2030. It’s a form of renewable energy that works well in Colorado and all the incentives that apply to solar PV are available for this.

Small Hydro Incentives in Colorado

Colorado has a strong hydroelectric base in the state with 60 medium and large scale plants operating and producing in the region of 1,150 MW. The further potential lies in the states large swathes of agricultural land that are also prime locations for micro hydro installations. A recent $1.8 million grant to help farmers turn their fast flowing rivers into mini hydro plants could help them reduce their running costs and provide additional electricity to the grid. Rural Energy for America Program (REAP) Grants could see an increase of micro hydro in these areas.

Geothermal Incentives in Colorado

Installations such as heat pumps also benefit from the Federal Tax Rebate and other Colorado State incentives. Property Assessed Clean Energy provides financing for residential and commercial sectors who want to install energy improvements, including ground and air sourced heat pumps. Companies such as Southeast Colorado Power Association have their own Energy Efficiency Rebate Program which can give back $200 per ton for closed loop heat pump systems.

Biomass Incentives in Colorado

Colorado currently has one major plant producing 11 MW in Gypsum but there are prime opportunities to develop in the future with the amount of woodland the state has. Legislation was introduced in early 2015 to help public buildings change to biomass in the years to come in the form of woodchip boilers. While the state may be a little behind on residential and commercial biomass boilers, expect some developments in the coming years to rectify that oversight.

Wind Power Incentives in Colorado

In the ten years between 2005 and 2014, wind electricity generation increased from just 1.5% to 13.6%. The state is well placed to get its energy from wind farms and the industry currently employs over 6,000 people. For homes that are located in windy areas and have at least 1 acre of land, a wind turbine can provide a decent return on investment. Small turbines can cost in the region of $7,000 per kW installed but last a good deal of time with proper maintenance. Installers should, however, see it as a long term investment even with the Federal Tax Rebate. The other problem that installers may face of course is zonal issues and whether they are allowed to erect a large construction such as a wind turbine.

In most areas, Colorado is one of the top states when it comes to renewable energy and provide incentives for both residential and commercial installations. Whereas other states have decided not to engage in the renewable agenda or are doing so reluctantly, Colorado is pushing forward with innovation and encouraging businesses and homeowners to commit to clean energy for the long term.

Find out more about renewable energy incentives for Colorado on the DSIRE website.

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