Residents of Colorado Springs do enjoy fairly low electricity rates. People here don’t use all that much electricity, and don’t pay all that much for it either. These fairly low electricity costs might make you think twice about installing a solar panel system.
That said, keep in mind that electricity prices are rising as the years go on. The official estimate is an increase of 3% annually for electricity costs across the board. Moreover, while solar panel installation costs might seem high, they are decreasing.
On average, the cost of a solar panel installation has gone down by around 20% over the last five years. Thanks to improving technologies, these costs are expected to continue falling. These two factors combined do mean that solar power in Colorado Springs is becoming a more viable alternative.
After all, the point of it all is to help you save money. The question here is of course how long a solar panel installation will take to pay for itself. If you buy a solar panel system in Colorado Springs, how long will it take for you to break even?
There are some figures that we need to determine before we can determine this payback period. We first need to know how much electricity you use in Colorado Springs and what it costs you. We then also need to determine the average cost of solar panel installations in Colorado Springs.
We then also need to figure out how much electricity solar panels in Colorado Springs will produce. Once all of these figures have been determined, we can then plug them into our final equation. Let’s determine how long it will take for you to break even on a solar panel installation in Colorado Springs.
Residential Electricity Usage & Costs in Colorado Springs
First, let’s figure out how much you’re paying for your electricity per year. First, electricity costs in Colorado Springs are fairly low per kWh. The average cost per kWh in Colorado Springs is 11.38 cents.
This is lower than the Colorado average of 11.46 cents per kWh. This is also around 4.21% less than the national average. National average electricity usage in the USA costs 11.88 cents per kWh. Therefore, people in Colorado Springs pay slightly less than the national average for their power.
Next, people in Colorado Springs do not use all that much electricity. On average, people here use around 706 kilowatt hours of electricity per month. That is 38th in the USA. This comes in at almost 22% less than the rest of the country. The national average in the USA is 903 kilowatt hours per month.
Fairly low energy usage and fairly low costs result in fairly low bills. The average electricity bill in Colorado Springs at this time is roughly $81 per month.
This equals $972 annually spent on electricity costs. This is much lower than the national average of $107 per month.
People in Colorado Springs pay almost 25% less for their power on a yearly basis than the rest of the country. That said, spending almost $1000 per year on electricity is still a whole lot. For this reason, solar panels in Colorado Springs are still definitely a viable investment to make.
Average Cost of Solar Panels in Colorado Springs
The next step here is to determine how much solar panels will cost you to install. To put things in perspective, the national average is $3 per watt. In other words, for every watt of solar panel installed, an American will pay roughly $3.
The really good news for residents of Colorado Springs is that solar panels here are much cheaper. On average, somebody in Colorado Springs can expect to spend $2.36 per watt. What is also important to note is that you need to consider bulk pricing. When you buy larger solar panel systems with more watts, they tend to be cheaper.
Of course, an 8 kilowatt solar system will be more expensive than a 7 kilowatt solar system. However, on a per watt basis, the larger of the two is the cheaper one. You save more money per watt when you get more watts. Let’s take a look at the average cost of solar panel installation in Colorado Springs on a per Watt basis.
- 4kW – $2.54 per watt – $10,160
- 5kW – $2.46 per watt – $12,300
- 6kW – $2.36 per watt – $13,800
- 7kW – $2.39 per watt – $16,730
- 8kW – $2.40 per watt – $19,200
- 9kW – $2.34 per watt – $21,060
- 10kW – $2.31 per watt – $23,100
The Federal Solar Rebate Program
The initial installation cost of solar panels in Colorado Springs may seem quite high. However, there is some good news for residents of Colorado Springs. In fact, this is good news for all Americans. There is a so-called Federal Solar Rebate Program in place.
This is also known as the Investment Tax Credit. This provides all solar purchases with a 26% rebate. Keep in mind that this 26% rebate will last until the end of this year, 2022. Then, until the end of 2023, this rebate will be 22%. Unfortunately, there does not seem to be a plan to extend this rebate past the end of 2023.
Therefore, to save the most money possible, purchasing your solar system as soon as possible is recommended. So, what do solar panel installation costs look like in Colorado Springs after this rebate?
- 4kW – $7,518.40
- 5kW – $9,102
- 6kW – $10,212
- 7kW – $12,380.20
- 8kW – $14,208
- 9kW – $15,584.40
- 10kW – $17,094
Other Solar Incentives in Colorado
There are a couple of other solar incentives in place in Colorado. That said, none of them will take away from the upfront cost of the installation. However, there is a 2.9% home solar system state sales tax exemption in place.
Moreover, there is also a property tax exemption in place. This means that the added value to your home from the solar panels will not increase your property taxes.
There are also some local utility company incentives in place. You may be eligible to get a certain amount of money per kilowatt of solar panel installed. Although, this varies greatly from one area to another, so this is not something we will include here.
How Much Electricity do Solar Panels in Colorado Springs Produce?
Before we can determine the payback period, we need to figure out how much electricity those solar panels will produce. The average installation size is 5kW, so this is what we will be working with.
Your average 5 kW solar system will be able to produce roughly 20 kilowatt hours of electricity per day. this equates to roughly 600 kilowatt hours of electricity produced per month However, what you need to consider here is peak sunlight hours.
For this output calculation, a standard of four peak sunlight hours is used. The good part about living in Colorado Springs is that you get much more peak sunlight than just four hours. People in Colorado Springs can expect to get roughly 5.5 hours of peak sunlight per day.
That same 5kW solar system can therefore produce 27.5 kilowatt hours of electricity per day. This equates to roughly 825 kilowatt hours of electricity produced per month. Therefore, a 5kW solar system would fully meet your energy usage requirements in Colorado Springs.
The Payback Period for Solar Panels in Colorado Springs
We have now determined all of the necessary figures we need for our calculation. There are four main figures that you need to keep in mind here. These include the following.
- Residents of Colorado Springs use an average of 706 kilowatt hours of electricity per month.
- Residents of Colorado Springs pay an average of $972 per year for their electricity.
- Standard 5kW solar system in Colorado Springs will cost $9,102.
- That same 5kW solar system in Colorado Springs will produce well over 800 kilowatt hours of electricity per month.
We can now plug all of these figures into the final equation. As you can tell, a 5kW solar system in Colorado Springs will fully meet your energy usage requirements.
This means that you therefore save 100% of your annual energy costs. This means that you will save $972 annually. Based on the initial cost of the solar system, A 5kW installation will pay for itself after 9.36 years.
You might be thinking of getting a smaller 4kW solar system. However, do keep in mind that a 4kW solar system will not quite fully meet your energy usage needs.
This size of system in Colorado Springs will produce 660 kilowatt hours of electricity per month. Simply put, you may as well go for the 5kW system to fully meet your energy needs.
Economic Feasibility of Solar Energy in Colorado Springs
Indeed, a solar panel installation is worth it in Colorado Springs. Although it may take up to 10 years for it to pay for itself, it is a long term investment worth making. Not only will you save money over the long run, but you’re doing something beneficial for the environment as well.