Cost and Investment of Solar in Colorado Part II

This article is Part II of the article, Cost and Investment of Solar Colorado Part I. We’ll continue to explore the cost and savings of having a solar panel system in Colorado.

Bottom Line & Tax Credit

Now to get the grand total for the project, we add the product cost of $8,292 and the installation cost of $6,594 and we get $14,945 before local, state, and federal tax incentive programs. That means before any other savings are explored, the cost per watt for this system is $2.49 per Watt.

Every state has different programs for solar, but we know that everyone is able to take 30 percent of the total installation cost and deduct it in their income taxes If we factor in the tax credit, from the system, the homeowner is allowed to write off $4,483. If we subtract this from the overall cost, it drops the cost down to $10,462. 
 

Excel Energy

Xcel Energy is the main utility in the Denver area and they have a solar rewards program, which is basically their version of net metering incentives for customers who install grid-connected solar systems. The systems can produce up to 120 percent of the average annual load of their homes and facilities.

Xcel purchases the renewable energy credits produced by the systems for a period of 20 years (unless another legal provision supersedes). The size of the REC payment depends on the size of the system and the owner of the system, as shown below. The follow REC payments are in effect as of November 2015. Check the website above for changes to REC pricing.

For more information, visit the program website or view Xcel Energy's approved 2014 Renewable Energy Standard Plan. Here is some text from the plan itself explaining the program. The Small Program offers a 20-year contract (where REC payments are made for 10 years for 20 years worth of RECs) of payments of $0.02 per kilowatt-hour (kWh)) for eligible customer-owned systems. The Small Program also offers a 20-year contract (where REC payments are made for 20 years for 20 years worth of RECs) of payments of $0.01 per kWh for eligible third-party-owned systems.

The capacity limit for the Small Program is 2 MW per month, for an annual capacity limit of 24 MW. For both ownership categories, there is a non-refundable interconnection study fee of either $100 (<10 kW systems) or $1,000 (>10 kW systems) and a $250 deposit (refundable if application completed within 365 days). After 20 years, a homeowner who installed solar panels on their home could save approximately $34,590 in electricity costs. After you factor in the tax credits, the initial payback of the system is 6.5 years, and overall the family can save more than twice what the panels originally cost.

All these prices and savings amounts can change slightly when different brands of solar panels and inverters are used, but the general point is solar power is less expensive than most new cars. Those panels also increase the value of the home, they pay for themselves in a little more than five years, and the whole solar panel system can save a homeowner more than $34,000 in power costs. If you’d like further information, click here. 

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