Denver has sunshine to spare

Denver CO boasts more than 300 days a year of sunshine. 

Even though it gets cold in the winter and a lot of snow falls in the area, there is always sunshine to back up the snow storms. 

Colorado also has an independent spirit, and people are extending that spirit into going solar, so they can stop paying the power company for something they can generate themselves.

That is why we picked Denver CO for our next hypothetical home that needs some solar panels. 

Like other articles, we are using averages, and the average cost per month for power in Denver is about $118 a month. We picked a home in Denver that already has solar panels on it. The home is medium in size, and a family of four live there 

This home has air conditioning which they use in the summer as well as a lot of heat in the winter.,The family of four don’t have a pool or a hot tub. They just consume a lot of power to keep the home warm or cool depending on the month. 

If we enter in the address and the $118 a month electric bill into our HahaSmart Price Checker Tool, it recommends a 6.0kW system for the home. The home is not covered by trees, and there is plenty of roof space.  

Power in Colorado is about average for the country, so even though the solar panel system is working in both cold and warm weather, the payback is still quite fast. Let’s take a closer look. 
 

How much it costs for the solar system equipment  

Now as we stated earlier, the HahaSmart Price Checker Took recommends a 6.0 kW solar panel system and it gives a breakdown of the cost and the permits needed. The first step is to get the approval of the design and a permit to build the residential solar system. That engineering and permitting process costs about $798. 

If you add together the cost of the solar panels, the power inverters, the racking, the material needed to mount the panels, and other miscellaneous items, the total comes to about $7,703. The sales tax in Denver CO is a livable 7.65 percent which is better than many cities in the nation. If you add the sales tax of about $589 it brings the total to $8,292 in equipment and permitting. 

It is important to note that this cost does not include the electrical main service panel upgrade, and expenses or interest you accrue if you choose to finance your solar system.  
 

The average cost for a solar system installation

The HahaSmart price checker tool compiles data from nearly 2300 different installers and it states the installation cost is from $5,748 to $7,442 for the solar panels. If we average the two numbers we get $6,594 as an average installation cost. 

Installation costs can vary and we recommend that you compare two to three different installers quotes for your needs. When you talk to multiple installers please note, local installers are certified and they care about their work. Many times they are also less expensive than national chains. Talk to multiple installers and find one that produces the best solar panel system for your situation. 

Generally, a solar installation package includes an application for a solar installation permit from the local building safety department. A plan and layout of the overall installation, a guarantee from the installation company that the project will be done right, and then a permit to operate the solar system.
 

The total cost and the federal tax credit applied

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 solar rewards program

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).
 

How much could you save on electricity costs?

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.

To learn more about how you can have a $0 electric bill in Denver CO, visit HahaSmart and try out our Price Checker Tool yourself. You can not only see how much a solar panel system would cost and how much you can save.

For information relating to going solar don’t forget to visit our solar blog section for more handy guides and articles.