Does Colorado Have Community Solar Laws?

Colorado is a national leader in renewable energy policy and was one of the first U.S. states to establish a legal framework supporting community solar. The state formally enabled shared solar generation through its Community Solar Gardens Act of 2010 (HB 10-1342). This legislation created the foundation for residents, renters, and businesses to subscribe to community solar projects and receive bill credits for their share of the generated electricity.

The Community Solar Gardens Act (2010)

Under the Community Solar Gardens Act, Colorado defined community solar gardens (CSGs) as centrally located solar arrays where multiple customers could buy or lease a portion of the output. The act required investor-owned utilities (IOUs), such as Xcel Energy and Black Hills Energy, to support the creation of community solar gardens and credit subscribers through virtual net metering. This law effectively removed barriers for residents who could not install residential solar due to roof shading, ownership issues, or financial limitations.

Subscribers receive credit on their utility bills for their portion of the solar energy produced, allowing them to benefit from solar power without installing panels on their property. The act initially capped total program capacity at 6 megawatts (MW) per utility service territory but was expanded in later years as demand grew.

2016 Renewable Energy Standard (RES) Amendments

In 2016, the Colorado Public Utilities Commission (PUC) amended the Renewable Energy Standard to allow utilities to expand community solar capacity. This policy broadened participation, requiring utilities like Xcel Energy to procure increasing amounts of renewable energy through community solar farms. It also encouraged competitive bidding for CSG projects, ensuring cost-effectiveness and equitable access.

Provisions for Low-Income Households

Colorado has embedded equity into its community solar laws. The Low-Income Community Solar Demonstration Project (2015) launched to ensure that households earning below 80% of the area median income could participate. Utilities were required to dedicate a minimum share of new community solar projects to low-income subscribers, typically 5% to 15% of total capacity. These participants often receive free or deeply discounted subscriptions, reducing energy burdens and supporting statewide energy equity goals.

In 2019, Colorado Senate Bill 19-236 further directed the PUC to expand low-income participation in community solar energy programs. Today, Colorado continues to enhance equitable access through partnerships between utilities, non-profits, and local governments.

What Is Community Solar?

Community Solar, sometimes called shared solar, is a model where multiple consumers share the benefits of a single solar array. Instead of installing panels on a home or business, individuals subscribe to a community solar project and receive credits for the energy produced by their portion of the array.

A typical community solar farm is built on open land, commercial rooftops, or brownfield sites and connects directly to the electric grid. The energy produced flows into the local utility system, offsetting participants’ electricity usage through virtual net metering.

When Community Solar Is a Good Option

Community solar is ideal for households or renters who cannot host residential solar systems due to one or more of the following reasons:

  • They rent their property or live in multi-unit buildings
  • Their roof is shaded, oriented incorrectly, or structurally unsuitable for solar panels
  • They cannot afford the upfront cost of installation
  • Their homeowners association restricts rooftop installations

By subscribing to a Colorado community solar program, these customers can still benefit from renewable energy without owning or maintaining solar panels.

Advantages Over Residential Solar

Compared to rooftop systems, community solar projects offer several unique advantages:

  • Accessibility: Anyone within the utility’s service area can subscribe, regardless of home ownership or roof condition
  • No Maintenance: The project developer or utility manages maintenance, insurance, and performance monitoring
  • Scalability: Subscribers can adjust their share to match their electricity needs or move within the same utility territory and retain their subscription
  • Lower Barriers to Entry: Many community solar programs offer flexible payment plans, low credit requirements, or no-cost subscriptions for low-income households
  • Environmental Impact: Each subscriber helps displace fossil-fuel-based generation with clean community solar energy

For many Coloradans, community solar provides an affordable and convenient pathway to renewable energy participation, especially when residential solar isn’t feasible.

Why Community Solar?

Colorado’s community solar energy model has become a cornerstone of the state’s clean-energy transition. It democratizes access to solar benefits, fosters local job creation, and contributes to statewide emissions-reduction goals.

Benefits of Community Solar for Homeowners, Renters, and Businesses

  • Cost Savings – Subscribers receive credits on their electricity bills based on the power generated by their share of the community solar farm. Depending on the subscription structure, savings typically range from 10% to 20% on annual electricity costs
  • Energy Equity – Community solar ensures inclusivity by extending renewable-energy benefits to those previously excluded, such as renters, low-income households, or those with unsuitable roofs. Programs supported by Colorado’s Office of Energy Efficiency & Renewable Energy (OEE) and the Colorado Energy Office target these demographics specifically
  • Local Economic Development – Community solar projects create construction, maintenance, and administrative jobs while generating local tax revenues. These projects also support rural economies by leasing underused land to host solar farms
  • Grid Resilience and Environmental Benefits – Distributed solar generation reduces transmission losses and enhances grid stability. By replacing fossil-fuel energy, community solar farms help lower greenhouse-gas emissions and improve local air quality
  • Flexibility and Portability – Subscribers can often transfer or cancel subscriptions if they move within the same utility area, offering flexibility not available with fixed rooftop systems

The benefits of community solar extend well beyond financial savings, supporting community resilience, environmental stewardship, and social equity.

Are There Community Solar Projects in Colorado?

Yes. Colorado has one of the most mature community solar project markets in the United States. The state’s first community solar garden went online in 2011 in El Jebel, shortly after the 2010 legislation took effect. Since then, hundreds of additional projects have been built across the state, ranging in size from small local installations to large utility-scale arrays.

Current Market Overview

As of 2025, Colorado hosts over 250 active community solar projects totaling more than 400 MW of capacity. These installations are primarily located within Xcel Energy’s and Black Hills Energy’s service territories but also include cooperatives and municipal utilities like Holy Cross Energy, United Power, and Poudre Valley REA.

Major Community Solar Projects

Here are some of the largest and most notable community solar farms in Colorado:

Collectively, these community solar projects demonstrate Colorado’s commitment to making solar energy widely accessible.

How Residents Can Join

To join a Colorado community solar program, residents typically follow these steps:

  • Check Eligibility – Subscribers must live within the utility service area hosting the community solar project
  • Select a Provider – Choose from utility-sponsored programs or private developers offering subscription plans.
  • Determine Subscription Size – Decide how many kilowatts (or percentage of household usage) to subscribe for
  • Sign a Subscription Agreement – Terms vary but usually include rate structure, transfer options, and cancellation policies
  • Receive Bill Credits – Once enrolled, the subscriber’s portion of solar generation appears as credits on their utility bill, offsetting monthly charges

Many Coloradans discover that joining community solar farms is simpler and faster than installing rooftop systems, no home inspections, permits, or equipment installations are required.

How Does Community Solar Work in Colorado?

The Colorado community solar model connects participants to renewable energy without direct ownership of solar equipment. Here’s how it functions in practice.

System Design and Operation

A community solar project is typically installed on a parcel of land or a commercial rooftop. The solar panels generate DC electricity, which is converted into AC through inverters and fed into the local utility grid. The energy produced is measured, and subscribers receive credits proportional to their share of generation.

Colorado’s virtual net metering policy ensures that each subscriber’s share offsets their electricity usage at the retail or near-retail rate. Utilities track production and automatically apply the savings as line-item credits on monthly bills.

Example: Xcel Energy’s Solar Rewards Community Program

Xcel Energy operates the Solar Rewards Community (SRC) program, Colorado’s largest community solar platform. Under SRC, third-party developers build and maintain community solar gardens, while Xcel manages subscriber billing and energy credits. Subscribers can offset up to 120% of their annual electricity usage, providing significant flexibility and potential savings.

Example: Black Hills Energy’s Renewable Advantage Program

Black Hills Energy runs a smaller, regionally focused community solar initiative offering low-income customers guaranteed savings on electricity. Projects under this program are often co-developed with local non-profits to expand participation in disadvantaged communities.

Incentives and Tax Benefits

Community solar projects in Colorado can leverage both federal and state incentives.

  • At the federal level, developers can claim the Investment Tax Credit (ITC), 30% of project costs through 2025, reducing capital expenses and, ultimately, subscriber pricing
  • State incentives, such as property-tax exemptions for renewable-energy facilities and utility-specific renewable-energy credits (RECs), further enhance economic viability

Subscribers indirectly benefit when developers pass these savings through to lower community solar cost structures or offer discounted subscriptions.

Integration with Colorado’s Renewable Portfolio

Colorado’s Renewable Energy Standard requires IOUs to obtain 30% of their retail sales from renewable sources. Community solar energy contributes significantly to meeting these goals while diversifying generation resources. Through CSGs, utilities can deploy distributed generation that reduces strain on transmission infrastructure and improves local grid reliability.

How Much Does Community Solar Cost in Colorado?

The community solar cost in Colorado depends on the subscription structure, the project developer, and the customer’s utility. Subscribers usually pay either a fixed monthly fee, a per-kilowatt-hour rate, or a subscription discount model tied to their energy bill.

Average Subscription Costs

As of 2025, the average subscription cost for community solar in Colorado ranges between:

Subscription Type Typical Cost Range Notes
Fixed Monthly Fee $15 – $35 per month Common for small household subscriptions (2–5 kW equivalent).
Pay-As-You-Go (Per kWh) 9 – 12 ¢ / kWh Subscribers pay only for the energy produced by their share.
Discount Model 5 – 20 % below utility rate Energy credits appear as a bill discount each month.

These rates typically translate to 10%–20% annual savings compared to standard utility prices, depending on usage and project efficiency.

What the Cost Covers

Subscription payments cover multiple components, including:

  • Construction and financing costs for the community solar farm
  • Operation, maintenance, and insurance
  • Grid interconnection and administrative expenses
  • Customer billing, reporting, and performance tracking
  • Return on investment for project developers and investors

Since developers can apply the federal ITC and state renewable incentives, these savings often help keep subscription costs competitive.

Additional Considerations

  1. Contract Terms – Most agreements last 10 to 20 years, though some programs offer short-term or month-to-month options
  2. Transferability – Subscribers moving within the same utility territory can typically transfer their share to a new address
  3. Low-Income Discounts – Qualified participants may receive 50% or greater reductions in community solar cost, thanks to state-sponsored programs
  4. Buy-In Options – Some projects allow customers to purchase panels or capacity shares outright, similar to investing in a small portion of a solar farm

Overall, community solar energy in Colorado remains one of the most cost-effective and inclusive pathways to clean electricity, offering predictable savings without the complexity of residential solar ownership.