Solar & Battery Regulation & Incentive Programs

Sales and Use Tax Exemption for Renewable Energy Equipment

Program Overview


Category:
Financial Incentive
Program Type:
Sales Tax Incentive
Implementing Sector:
State
State:
Colorado
Eligible Storage Technologies:
Solar Water Heat, Solar Space Heat, Geothermal Electric, Solar Thermal Electric, Solar Thermal Process Heat, Solar Photovoltaics, Wind (All), Biomass, Wind (Small), Anaerobic Digestion
Website:
https://www.colorado.gov/pacific/sites/default/files/Sales83.pdf
Incentive Amount:
100%
Applicable Sectors:
Commercial, Industrial, Local Government, Nonprofit, Residential, State Government, Retail Supplier, Agricultural, Institutional
Start Date:
07/01/2006
Last Updated:
07/27/2020

Summary

Colorado exempts from the state's sales and use tax all sales, storage, and use of components used in the production of alternating current electricity from a renewable energy source for fiscal years beginning on or after July 1, 2006. The exemption for systems which produce electricity from a renewable resource includes, but is not limited to, photovoltaic (PV) systems, solar thermal-electric systems, small wind systems, biomass systems, or geothermal systems.

Effective July 1, 2009, through July 1, 2017, all sales, storage, and use of components used in solar thermal systems are exempt from the state's sales and use tax.  Effective May 5, 2014, through July 1, 2019, all sales, storage, and use of components used in biogas production systems are exempt from the state's sales and use tax (see H.B. 1159).

System Components Exempt from Taxation

Eligible components include, but are not limited to, wind turbine generators, rotors and blades, solar modules, trackers, supporting structures or racks, inverters, towers and foundations, plus balance of system components such as wiring, control systems, switchgears, and generator step-up transformers. Also exempt are concentrating solar power components that include, but are not limited to: mirrors, plumbing, and heat exchangers.

Ineligible components include any components beyond the step-up transformers located at the production site, labor, energy storage devices, or remote monitoring systems. 

Local Option -- Sales and Use Tax Exemption

The exemption only applies to state sales and use taxes  not to sales and use taxes assessed by incorporated towns, cities, and counties. However, Colorado has granted local jurisdictions the authority to exempt renewable energy equipment from sales and use taxes if a local government chooses to do so.


Authorities

NameEnacted DateEffective DateExpired Date
C.R.S. 39-26-724
C.R.S. 29-2-105