Local Option - Sales and Use Tax Exemption for Renewable Energy Systems

Colorado law lets cities and counties offer sales or property tax rebates or credits to people who install renewable energy systems like solar PV, solar thermal, small wind, biomass, or geothermal. Whether you can get one depends on where you live, so contact your city and county to ask if an incentive exists. Websites for Colorado cities and counties can be found through the Colorado Municipal League (cml.org) and Colorado Counties, Inc. (ccionline.org).

Colorado S.B. 07-145 authorizes local governments to offer tax rebates or credits to residential and commercial property owners who install renewable energy systems, which can lower customers' upfront costs on solar PV, solar thermal, small wind, biomass, and geothermal projects. Availability and requirements are set by each city or county, so check with the local jurisdiction where the project is located and have customers confirm eligibility. The state's Renewable Energy Components Form on sales and use tax topics provides additional guidance.

S.B. 07-145, enacted in April 2007, authorizes counties and municipalities to establish sales or property tax rebates or credits for renewable energy systems, and each locality administers its own incentive, so terms and funding vary. Eligible property is any fixture, system, or group of devices that produces electricity from renewable resources, including photovoltaic, solar thermal, small wind, biomass, and geothermal systems. Targeted customers are residential, commercial, industrial, and agricultural property owners, who are directed to their local city or county government to learn whether an incentive is offered.