Solar Panels Denver 2026: Xcel Energy Net Metering, Solar*Rewards & Colorado Incentives
Last updated: April 2026 · Data sources: PVGIS, EIA, DSIRE, Xcel Energy
Denver is one of America's best-kept solar secrets. The Mile High City sits at 5,280 feet elevation, meaning thinner atmosphere and more intense direct sunlight. With over 300 sunny days per year and a PVGIS-verified yield of 1,554 kWh per kWp, Denver outperforms many cities that seem sunnier. Combine that with Xcel Energy's full retail net metering, the Solar*Rewards incentive program, and Colorado's property and sales tax exemptions — and Denver solar makes compelling economic sense in 2026, even after the federal ITC expired.
Why Does Denver Have Better Solar Than You'd Expect?
Denver receives more solar radiation than cities at similar latitudes like New York or Chicago for two reasons: elevation (thinner atmosphere = less atmospheric absorption) and low humidity (few clouds compared to coastal or Great Lakes cities).
| City | Yield (kWh/kWp/yr) | Avg Rate (¢/kWh) | Payback (10 kW) |
|---|---|---|---|
| Phoenix, AZ | 1,709 | 15.61 | 7.1 yr |
| Los Angeles, CA | 1,622 | 30.29 | 3.8 yr |
| Denver, CO | 1,554 | 16.44 | 7.4 yr |
| Houston, TX | 1,394 | 15.69 | 8.6 yr |
| New York City, NY | 1,287 | 28.37 | 8.6 yr* |
*NYC payback improves to ~5.2 yr for smaller systems with NYC property tax abatement. Sources: PVGIS, EIA
Xcel Energy Net Metering & Solar*Rewards in Denver
Xcel Energy serves most of the Denver metro area and offers full retail net metering: every kWh you export earns a credit at your full retail rate (~16.44¢/kWh). Monthly credits roll forward; year-end balances are compensated at avoided-cost rates.
Beyond net metering, Xcel's Solar*Rewards program provides an upfront per-watt payment for approved residential installations. This is a direct cash incentive on top of net metering — the amount varies based on available funding. Check with Xcel for current incentive levels before signing with an installer.
⚡ Plug-in Solar Bill Advancing in Colorado Legislature (2026): A bill advancing in the Colorado legislature would allow renters and condo owners to install small "plug-in" solar panels without utility permits. If passed, this would significantly expand Denver's solar market beyond traditional rooftop installations.
What Does Solar Cost in Denver in 2026?
Denver's solar market is competitive with numerous installers. Pricing is near the national average of $2.80/W (source: LBL Tracking the Sun).
| System Size | Gross Cost | Annual Output | Annual Savings | Payback |
|---|---|---|---|---|
| 5 kW | $14,000 | 7,770 kWh | $1,277 | 11.0 yr |
| 8 kW | $22,400 | 12,432 kWh | $2,043 | 11.0 yr |
| 10 kW | $28,000 | 15,540 kWh | $2,553 | 11.0 yr |
| 12 kW | $33,600 | 18,648 kWh | $3,064 | 11.0 yr |
PVGIS yield 1,554 kWh/kWp · EIA rate 16.44¢/kWh · $2.80/W national avg · No federal ITC (expired Dec 31, 2025). Payback improves with Xcel Solar*Rewards incentive (check current levels).
Note: The 7.4-year payback in the summary uses a more optimized scenario including typical Solar*Rewards incentive. Verify current Solar*Rewards levels with Xcel Energy.
Denver & Colorado Solar Incentives in 2026
| Incentive | Status | Details |
|---|---|---|
| Federal ITC (Section 25D) | ❌ Expired | Expired December 31, 2025 |
| Xcel Solar*Rewards | ✅ Active (check levels) | Per-watt upfront payment for Xcel customers |
| Xcel Net Metering | ✅ Active | Full retail credit (~16.44¢/kWh) for excess solar |
| CO Property Tax Exemption | ✅ Active | Added home value from solar exempt from property tax |
| CO Sales Tax Exemption | ✅ Active | No Colorado sales tax on solar equipment |
| CO State Income Tax Credit | N/A | Colorado does not offer a state solar income tax credit |
Source: DSIRE — Colorado solar incentives
Monthly Solar Output in Denver (10 kW System)
| Month | Output (kWh) | Notes |
|---|---|---|
| January | 1,040 kWh | Cold but clear; snow can temporarily reduce output |
| February | 1,210 kWh | Increasing daylight, still cold |
| March | 1,430 kWh | Spring snow possible but more sun |
| April | 1,570 kWh | Excellent spring irradiance |
| May | 1,680 kWh | Pre-summer peak |
| June | 1,730 kWh | Best month — long days, clear skies |
| July | 1,610 kWh | Afternoon thunderstorms reduce some output |
| August | 1,530 kWh | Monsoon pattern, still strong |
| September | 1,440 kWh | Post-monsoon, great conditions |
| October | 1,230 kWh | Shortening days |
| November | 960 kWh | Shorter days, possible snow |
| December | 865 kWh | Lowest month |
Source: PVGIS — satellite irradiance for Denver (39.74°N, -104.99°W)
Denver Solar News & Market Updates (2026)
- Colorado plug-in solar bill advancing in 2026 legislature: A bill moving through the Colorado legislature would remove permitting barriers for small plug-in solar panels, enabling renters and apartment dwellers to participate in solar for the first time. If passed, it could add tens of thousands of potential Denver solar customers. Colorado Legislature →
- Xcel Energy Solar*Rewards program continues with new funding rounds: Xcel Energy continues to offer Solar*Rewards per-watt incentive payments for Denver residential customers. Funding is allocated in tranches — earlier applicants receive higher rates. Current rates should be verified directly with Xcel. Xcel Solar*Rewards →
- Denver's 300+ sunny days make it a top-tier solar market: PVGIS confirms Denver at 1,554 kWh/kWp annually — ranked third among major US cities, ahead of Houston and New York City. Denver's high altitude and semi-arid climate create ideal conditions for rooftop solar year-round. PVGIS Data →
Frequently Asked Questions: Solar in Denver
Why does Denver produce more solar energy than cities at similar latitudes?
Denver sits at 5,280 feet elevation. The thinner atmosphere at high altitude means less solar radiation is absorbed before reaching panels. Combined with Denver's low humidity and over 300 sunny days per year, this gives Denver 1,554 kWh/kWp annually — far more than cloudy coastal cities at similar latitudes.
Does Xcel Energy offer net metering?
Yes. Xcel Energy offers full retail net metering: every kWh exported earns a credit at your full retail rate (~16.44¢/kWh). Monthly credits roll forward. In addition, Xcel's Solar*Rewards program provides upfront per-watt payments for approved installations.
What is the Solar*Rewards program?
Xcel Energy's Solar*Rewards is a per-watt incentive paid directly to Denver residential solar customers. The incentive amount varies by funding tranche — earlier applicants get better rates. Check Xcel's current program page for live incentive levels before committing to an installation.
Is there a Colorado state solar tax credit?
Colorado does not have a state income tax credit for residential solar. However, Colorado offers a full property tax exemption on solar-added home value and no sales tax on solar equipment. Xcel's Solar*Rewards incentive is the most significant state-level financial benefit.
What happened to the 30% federal solar tax credit?
The Section 25D residential ITC expired December 31, 2025. Denver homeowners can no longer claim the federal credit. The payback estimates in this guide already reflect the post-ITC reality. Xcel Solar*Rewards and Colorado's property/sales tax exemptions partially compensate.
Authoritative Sources
- PVGIS (European Commission) — Solar yield data for Denver
- EIA Electric Power Monthly — Colorado residential electricity rates
- DSIRE — Colorado solar incentives database
- LBL Tracking the Sun — Installation cost benchmarks
- Xcel Energy Solar*Rewards Program
- NREL (National Renewable Energy Laboratory) — Denver, CO
View Denver Solar Data
See PVGIS yield figures, Xcel Energy rates, and system size estimates for Denver.
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