NerdyWatts

Solar payback · CO

Is solar worth it in Colorado?

A 7 kW rooftop system near Denver produces about 11,165 kWh a year. Priced against 11 current residential tariffs in Colorado, payback runs from 11 years on the best of them to 43 on the worst.

No federal tax credit applies to a purchased system. Section 25D ended on December 31, 2025. Leases and power-purchase agreements can still reach the business credit (48E) through 2027, but it is claimed by the system's owner, not by you. Every figure on this page assumes no federal credit and no state or utility incentive.
11 yearsshortest payback, on the best tariff
1,595kWh per kW per year
#7of 52 states measured
47%used on site, not exported
$21,000system cost at $3.00/W

Why the tariff matters more than the panels

Two households in Colorado with identical roofs and identical systems can see paybacks 11 and 43 years apart, purely because they are on different tariffs. Solar produces at midday; households consume in the evening. Only 47% of what these panels make is used as it is made — the rest is exported, and what an exported kWh earns is set by the tariff and by state net metering rules, not by the hardware.

That is why the figures here are computed hour by hour against each real tariff rather than by taking a bill and assuming solar removes a share of it. How this is modeled →

Payback by tariff in Colorado

7 kW system at $3.00/W, household using 1000 kWh a month, no incentives. A range means the export credit is not filed with the tariff and the outcome depends on net metering rules — 11 of 11 tariffs here belong to a utility that reports residential net metering.

UtilityTariffStructure Annual savingPayback
Black Hills/Colorado Elec.Utility Co. LP Residential Service: RS-1 Tiered $946–$1,846 11–22y
Public Service Co of Colorado Residential Energy Time Of Use (Schedule RE-TOU) Time-of-use $550–$1,828 11–38y
Public Service Co of Colorado Residential General Service Opt-Out (Schedule R-OO) Seasonal $865–$1,826 11–24y
Public Service Co of Colorado Residential Service (Schedule R) Seasonal $851–$1,803 12–25y
San Miguel Power Assn, Inc Single Phase Non-Demand TOU Time-of-use $682–$1,693 12–31y
Mountain Parks Electric, Inc General Service Whole House Time of Use (Residential) Time-of-use $499–$1,424 15–42y
Mountain Parks Electric, Inc General Service Small (Residential) (Under 50 kW) Flat $665–$1,417 15–32y
City of Colorado Springs, Colorado Energy Wise Standard Time of Day (ETR) Time-of-use $443–$1,355 16–47y
City of Colorado Springs, Colorado Energy Wise Plus Time-of-Day Option (ETR-P) Time-of-use $490–$1,334 16–43y
Delta Montrose Electric Assn Optional Residential Time Of Use (TOU11) Time-of-use $429–$1,134 19–49y
Black Hills/Colorado Elec.Utility Co. LP Residential Service: RS-2 Flat $494–$1,052 20–43y

Your roof, your numbers

Change the usage, system size and installed cost, and every Colorado tariff is priced again.

Price it for your own system

What would change this

Your roof. Production is modeled for Denver on a south-facing array at 20° tilt. Shading, orientation and pitch all move it, and solar resource varies within Colorado itself.

Your usage pattern. A household at home during the day self-consumes more and exports less, which shortens payback wherever export credit is poor.

Rising rates. These figures hold today's prices flat. Electricity prices have been rising, and every rise shortens payback — so treat these as a conservative bound.

State and local incentives. Not included here, and in some states they are worth more than the federal credit was. Check your state energy office before deciding.

Guides to solar payback

All guides

  1. Guide · 4 min

    Why a smaller solar system pays back faster

    Doubling your panel count does not double your savings. On a real Georgia Power tariff, a 3 kW system pays back in 13 years and a 12 kW system takes 21 to 41 — and past a certain size, extra panels cannot save you anything at all.

  2. Guide · 3 min

    Where homes net-meter rooftop solar, and where almost none do

    Utilities report 5.5 million net-metered home solar systems, 41 per 1,000 households. Hawaii has 233; Tennessee and Alabama almost none.

  3. Guide · 3 min

    Solar in 2026, without the federal tax credit

    Section 25D ended on December 31, 2025. A home solar system bought in 2026 gets no federal credit at all — not a reduced one — and most payback advice still online predates that.

  4. Guide · 4 min

    Some utilities charge households for their peak demand

    59 household tariffs at 27 utilities charge for peak demand, typically $8.58 per kW a month. From 2027, southern Nevada's homes will pay one by the day.

  5. Guide · 3 min

    When is electricity most expensive? It depends on your utility

    Across 95 utilities with time-of-use rates we found 49 different weekday peak windows. Nearly all include 5 to 6 pm; little else is shared.