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Colorado

An arrow graphic shows that Colorado's renewable portfolio standard increases from 18% in 2014, to 30% for investor-owned utilities in 2020.

Carve-out: 3% of total retail sales must come from distributed generation
Tracking system: Western Renewable Energy Generation Information System (WREGIS)

Colorado's renewable portfolio standard (RPS) requires its retail utilities to have a percentage of their electricity sales from renewables. By 2020, the required percentage of renewable electricity is as set as 30% for investor-owned utilities (IOUs), 20% for electric cooperatives serving 100,000 or more meters, 10% for electric cooperatives serving fewer than 100,000 meters and municipal utilities serving more than 40,000 customers. Colorado allows renewable energy customers to net meter solar systems up to 120% of the IOU customer's average annual consumption. It implemented one of the first statewide community solar policies in the country with the Solar Gardens Act. It offers state incentives in the form of low interest loans and sales and use tax exemptions. Electric utilities Black Hills Energy, La Plata Electric Association, and Xcel Energy offer rebates to their renewable energy customers.

Latest Updates

  • Colorado's IOU Xcel energy was granted approval to market subscriptions for the output of 50 MW of solar installations, which could compete with other community solar projects.

Net Metering

Net metering applies to customer-generators for retail renewable distributed generation. All net-metered utilities are required to provide net metering service at nondiscriminatory rates to customer-generators. Systems >10 kW must use a second meter to measure the output. Commercial customers can participate in a voluntary time differentiated rate demand charge pilot program

System size limit: IOU customers – 120% of customer's average annual consumption; 25 kW for municipality and co-op customers; ≤50 kW for Aspen Electric and Longmont Power & Communications

Aggregate cap: Aggregate capacity limit is not specified in Colorado

Credit: Net excess generation is credited at retail price

RECs: Customers retain ownership of renewable energy certificates (RECs)

Meter aggregation: Meter aggregation is allowed for IOU customers in Colorado

Interconnection

Colorado Public Utility Commission's (PUC) interconnection standards apply to IOUs with over 40,000 customers and all electric cooperatives. Municipal utilities with over 5,000 customers are required to adopt similar interconnection rules. Colorado has three levels (based on system complexity) of interconnection standards for systems up to 10 MW.

Eligible Systems Type of Interconnection
Inverter-based systems ≤10 kW Level 1 Interconnection
Systems ≤2 MW Level 2 Interconnection (may require supplemental review)
All other systems: ≤10 MW Level 3 Interconnection (may require project scope, feasibility, impact studies)

System size limit: 10 MW

Liability insurance: Required coverage of $300,000 for ≤10 MW, $1,000,000 for ≤500 MW, $2,000,000 for ≤2 MW, and case-by-case determination for ≤10 MW. Electric cooperatives and municipal utilities can reduce or waive any insurance requirements that apply to IOUs.

External disconnect switch: Not addressed

Third Party Ownership

Third party system owners are exempt from the Colorado PUC regulation if the system does not generate more than 120% of the customer's average annual consumption.

Community Solar

Colorado's Community Solar Gardens Act allows the development of "community solar gardens" in the service territories of IOUs and electric cooperatives, who may use community solar output for state RPS compliance. Community solar gardens may be up to 2 MW and must have at least 10 subscribers. Colorado community solar garden subscribers are credited for their share of the system's output at the retail rate less a PUC-approved charge for the utility's administration costs. Any portion of a community solar garden owned by residential or tax-exempt entities is exempt from property taxation. At least 5% of an IOU's purchases from community solar must serve low-income subscribers.

State Incentive Programs

Program Administrator Incentive

Sales and use tax exemption

Colorado Department of Revenue

Solar PV equipment is eligible for 100% exemption from state sales and use tax. From 2017 on, storage equipment will be exempt from state sales and use tax.

Energy Smart Colorado

Energy Smart Colorado

The Energy Smart Colorado program provides low-interest loans of up to $25,000 to finance solar PV projects in Roaring Fork Valley and Eagle, Gunnison, Lake, and Summit Counties. The program uses funds from a DOE Energy Efficiency and Conservation Block Grant.

Renewable Energy and Energy Efficiency for Schools Loan

Colorado Energy Office

Colorado school districts are eligible for up to $1,000,000 in low-interest loans for renewable energy and energy efficiency measures, including solar PV.

Colorado Commercial Property Assessed Clean Energy (PACE)

Local authorities

Colorado has authorized local governments to provide PACE financing. PACE allows property owners to repay loans for solar PV projects through a special assessment on the property over a specified loan term.

Utility Incentive Programs

Utility Incentive Limitations

Black Hills Energy

$0.05/kWh rebate

10 kW to 30 kW

$0.075/kWh rebate

30 kW to 100 kW

La Plata Electric Association

$0.10/W rebate

<10 kW

$0.04491/kWh rebate

>10 kW; first 10 years of production

Xcel Energy

$0.02/kWh rebate

<25 kW; first 10 years of production

$0.05/kWh rebate

25 kW to 500 kW; first 10 years of production

Resources

The list below provides some resources for each type of policy or program. Please reference and contact relevant authorities and local utilities for the most up-to-date and accurate information on state and utility policies and incentive programs.

Renewable Portfolio Standard

Net Metering and Interconnection

Community Solar

Programs and Incentives