The Math on Solar
Chances are, you’ve seen rooftop solar panels in your neighborhood and might be wondering if solar makes financial sense for you. Here are some considerations.
• According to Your Energy, an extension of Colorado State University, a five kilowatt system will generate an average of 8,000 kilowatt hours (kWh) per year in the sunny climate of Colorado. At the current average cost of $0.15 per kWh, Colorado households can expect an average annual savings of $1,200 with a 5 kWh system.
• EnergySage calculates the average solar panel cost in Colorado to be $3.13 per watt. A five kilowatt system, which is an average size, should range in cost from $13,302 to $17,998, with an average installed cost of $15,650 in Colorado.
• The federal government’s solar Investment Tax Credit (ITC) allows homeowners to claim 30 percent of the total cost of solar equipment, including labor, materials, and installation expenses as long as specific requirements are met. EnergySage calculated common sizes, costs, and credits for residential systems:
|
System Size
|
System Cost
|
Cost after ITC
|
|
4 kW
|
$12,520
|
$9,265
|
|
5 kW
|
$15,650
|
$11,581
|
|
8 kW
|
$25,040
|
$18,530
|
The state of Colorado also provides tax breaks to residents who switch to solar. The Sales and Use Tax Exemption for Renewable Energy Equipment eliminates sales tax on the purchase of solar systems. And the Property Tax Exemption for Residential Renewable Energy Equipment allows homeowners to avoid paying property tax on the increased value of their homes due to solar system installation.