Solar resource
Your solar production in Denver
5.57 avg peak sun hours/day
Monthly avg solar radiation (kWh/m²/day) — Austin, TX. Bars update to show estimated kWh production when you use the calculator above.
Utility rate
Xcel Energy (Public Service Company of Colorado) electricity rate
$0.138/kWh residential
- Utility
- Xcel Energy (Public Service Company of Colorado)
- Residential rate
- $0.138/kWh (blended)
Xcel Energy offers retail-rate net metering under Colorado's net metering statute (C.R.S. §40-2-124). Excess solar generation exported to the grid is credited at the full retail rate on a monthly basis. Xcel also operates the Solar*Rewards program, which provides a per-kWh production incentive for enrolled systems — see incentives below. Customers must apply through Xcel's solar interconnection process to qualify for both net metering and Solar*Rewards.
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Incentives
Available solar incentives in Denver, CO
Federal + state + utility
| Incentive | Type | Value | Scope |
|---|---|---|---|
| Federal Solar Investment Tax Credit (ITC) | Tax Credit | 30% of system cost | Federal |
| Colorado Residential Solar Tax Credit | Tax Credit | 15% of installation cost, up to $2,500 | State |
| Colorado Solar Property Tax Exemption | Exemption | 100% of added home value from solar | State |
| Xcel Solar*Rewards Production Incentive | Rebate | Per-kWh production incentive for first 10 years | Utility |
| Colorado Net Metering (Retail Rate) | Net Metering | Retail rate credit for exported solar energy | Utility |
Incentive amounts and eligibility rules change. Verify current terms with your installer and a tax professional before installation.
System cost
Cost breakdown (6 kW default)
- Gross system cost
- $17400
- Federal ITC (30%)
- −$5220
- Net system cost
- $12,180
- Installed cost per watt
- $2.9/W
Lawrence Berkeley National Laboratory Tracking the Sun 2024 — Mountain West/Colorado median installed cost for systems 3–10 kW
Payback & long-term value
25-year outlook
- Annual savings (yr 1)
- $1,275
- Simple payback period
- 9.6 years
- 25-year net savings
- $19695
- Assumed annual rate increase
- 2.5%/year
25-year estimate uses flat electricity rate for conservative baseline. Accounting for 2.5% annual rate increases, lifetime savings increase substantially.
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How it works
How solar savings work in Denver
- Your panels capture sunlight Solar panels convert sunlight into DC electricity. Denver averages 5.57 peak sun hours per day — well above the national average of ~4.5 — thanks to its high altitude (5,280 ft), thin atmosphere, and over 300 days of sunshine per year. Even Denver's cold winters deliver abundant solar production because cold temperatures actually improve panel efficiency.
- An inverter converts DC to AC A solar inverter converts the DC power from your panels into the AC electricity your home uses. Modern string inverters and microinverters achieve 96–99% conversion efficiency. Denver's cool climate is ideal for inverter performance — heat is the primary enemy of electronics, and Denver rarely sees the sustained extreme heat that degrades components in Phoenix or Houston.
- You use solar power instead of buying from Xcel Every kilowatt-hour (kWh) your system produces during daylight reduces what you buy from Xcel Energy at $0.138/kWh. A 6 kW system produces about 9,240 kWh/year in Denver — enough to offset most of a typical Colorado home's usage. Denver's cool climate means lower cooling loads than Southern cities, so a 6 kW system often covers a larger share of total consumption.
- Excess power flows back to the grid When your panels produce more than your home uses — common on sunny spring and summer days — excess electricity flows back to Xcel Energy's grid. Under Colorado's retail net metering law, Xcel credits this exported energy at the full retail rate of $0.138/kWh. Monthly surplus credits carry forward; any remaining credit at annual true-up is typically rolled over or paid at avoided cost.
- You claim federal and state tax credits In the tax year your system is installed, you claim a 30% federal tax credit on the full installed cost. On a $17,400 system, that's $5,220 off your federal income taxes. Colorado's residential solar tax credit adds up to another $2,500 in state tax savings — reducing your effective net cost to approximately $9,680 when both credits are fully utilized.
- Your savings grow over time As Xcel Energy's rates rise (historically ~2.5%/year), your solar savings increase while your system cost stays fixed. Over 25 years, a 6 kW system in Denver nets roughly $19,700 after repaying the installation cost. Denver's strong solar resource combined with Colorado's layered incentives makes it one of the best mid-latitude solar markets in the country.
FAQ
Common solar savings questions for Denver, CO
How much can I save with solar panels in Denver, CO?
A 6 kW system — typical for a Denver home — produces about 9,240 kWh/year and saves approximately $1,275/year at Xcel Energy's current rate of $0.138/kWh. After the 30% federal tax credit ($5,220) and Colorado's state solar tax credit (up to $2,500), the effective net system cost can be as low as $9,680, with a payback period of roughly 9–10 years and 25-year net savings near $19,700.
Does Denver get enough sun for solar to be worth it?
Yes — Denver is one of the best solar cities in the United States. Denver averages over 300 sunny days per year and 5.57 peak sun hours per day, which is better than Miami, Houston, or Seattle. The combination of high altitude (5,280 ft), low humidity, and abundant direct sunlight makes Colorado one of the top solar resource states in the country.
What solar incentives are available in Denver, CO?
Denver-area solar customers can stack several incentives: (1) the 30% federal Investment Tax Credit (ITC) through 2032; (2) Colorado's residential solar tax credit (15% of cost, up to $2,500); (3) a full property tax exemption on the added home value from solar (C.R.S. §39-3-118.5); (4) Xcel Energy's Solar*Rewards production incentive (subject to program availability); and (5) retail-rate net metering under Colorado law.
What is Xcel Energy's net metering policy in Colorado?
Colorado law (C.R.S. §40-2-124) requires Xcel Energy to offer net metering at the full retail electricity rate — currently $0.138/kWh. Monthly surplus credits carry forward. At the annual true-up, any remaining credit is typically rolled over at avoided-cost rates. Unlike some states, Colorado's net metering at retail rate remains strong as of 2026, making self-consumption and grid export both valuable strategies.
What is Xcel's Solar*Rewards program?
Xcel Energy's Solar*Rewards program pays enrolled residential customers a per-kWh incentive on all solar electricity generated — not just what is exported. Historically, this has been $0.02–0.05/kWh for residential customers over the first 10 years. On a 9,240 kWh/year system, even $0.02/kWh adds about $185/year in extra income. Enrollment is subject to annual program capacity limits; contact Xcel Energy for current rates and waitlist status before installing.
How much does a solar system cost in Denver?
A 6 kW system in Denver costs approximately $17,400 before incentives ($2.90/watt installed, per Lawrence Berkeley Lab 2024 Mountain West data). After the 30% federal ITC ($5,220) and Colorado's state tax credit (up to $2,500), the net cost can be as low as $9,680. Prices vary by installer, equipment tier, and roof complexity — getting 3–4 quotes is recommended.
How many solar panels do I need for my Denver home?
A typical Denver home using 750–1,000 kWh/month (lower than Southern cities due to milder summers) needs a 5–7 kW system. A 6 kW system covers most of a moderately sized Colorado home's usage. Use the calculator above to enter your monthly Xcel bill and get a system size estimate tailored to your usage. Panel count depends on wattage: a 6 kW system uses approximately 14–16 panels at 390–430 W each.
Sources
Data sources and freshness
- https://pvwatts.nrel.gov/
- https://openei.org/apps/USURDB/
- https://www.xcelenergy.com/staticfiles/xe-responsive/Admin/Managed%20Documents%20%26%20PDFs/CO-Electric-Rate-Book.pdf
- https://leg.colorado.gov/bills/hb22-1007
- https://leg.colorado.gov/sites/default/files/documents/2023A/bills/2023a_1272_01.pdf
- https://codes.findlaw.com/co/title-39-taxation/co-rev-st-sect-39-3-118-5.html
- https://codes.findlaw.com/co/title-40-utilities/co-rev-st-sect-40-2-124.html
- https://emp.lbl.gov/tracking-the-sun
- https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics
- https://dsireusa.org/
- https://www.xcelenergy.com/working_with_us/renewable_energy_options_home/solar_*_rewards/
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Disclaimer: This calculator provides estimates for informational purposes only — not financial or investment advice. Solar savings depend on actual shading, roof orientation, energy usage patterns, rate changes, and equipment performance. Consult a licensed installer and a tax professional before making purchasing decisions. Verify incentive eligibility with official sources. Data last verified 2026-04-13.