16.72¢/kWh, 1,550 kWh per kW, about 5.2 kW for an average home.
Average residential electricity price
16.72¢/kWh
Solar production per kW of panels
1,550 kWh a year
Average home electricity use
674 kWh a month
Solar system to cover that use
5.2 kW (about 14 panels of 400 W)
Simple payback at $3.20–$5.50/W
12.3–21.2 years
Payback assumes every solar kWh offsets a kWh at the state's average retail price (full net metering) and no federal tax credit, which does not apply to systems placed in service after December 31, 2025.
Electricity prices in Colorado
The average residential price of electricity in Colorado is 16.72 cents per kWh, the 22nd highest of the 51 states and D.C. For comparison, the U.S. average in 2024 was 16.48 cents. The higher your price per kWh, the more each kWh your panels produce is worth, so expensive electricity shortens the payback of solar.
The average home uses 674 kWh a month, below the U.S. average of 863 kWh. At today's average price, that energy costs about $112.69 a month, before fixed customer charges and taxes. Check your own numbers with the electric bill analyzer.
How much sun Colorado gets
Each kilowatt of solar panels in Colorado produces about 1,550 kWh a year, according to PVWatts for a fixed, south-facing system at the state's population center. That ranks 8th of 51; the median state produces 1,363 kWh per kW. Your roof's direction, tilt and shading can change this by 20% or more, so use your ZIP code in the solar calculator by ZIP code for a closer estimate.
At 16.72¢/kWh, one kilowatt of panels produces about $259 worth of electricity a year when each kWh offsets a kWh you would have bought.
States with similar solar production per kW:
Wyoming (1,556), Florida (1,557), Oklahoma (1,511), Texas (1,507).
Solar for an average Colorado home
Share of use covered
System size
Panels (400 W)
Yearly value
50%
2.6 kW
7
$676
75%
3.9 kW
10
$1,014
100%
5.2 kW
14
$1,352
Yearly use of 8,088 kWh (674 kWh × 12). Value at the average retail price with full net metering.
What a full system costs and pays back
Lawrence Berkeley National Laboratory found that most home solar systems installed in 2023 cost between $3.20 and $5.50 per watt before incentives. For the 5.2 kW system that covers the average home's use, that is about $16,697 to $28,698. Saving about $1,352 a year, it would pay for itself in 12.3 to 21.2 years, the 17th fastest of 51.
That is a best case. If your utility credits exported solar below the retail price (net billing), or your rates have high fixed charges, savings are lower and payback longer. Run your own quote in the solar payback calculator, which lets you set the value of exported energy.
Electricity use: the average monthly use of residential customers in Colorado in 2024, from the EIA's annual electric utility survey (EIA-861, table 5.a).
Solar production: PVWatts v8 for a 1 kW fixed system facing south at a 20° tilt, with standard 14% losses, at the state's 2020 population center (PVWatts).
System size = yearly use ÷ production per kW. Panel count assumes 400 W panels.
Payback = installed cost ÷ yearly savings, with the 20th to 80th percentile of installed prices that Lawrence Berkeley National Laboratory found for 2023 (Tracking the Sun).
These are statewide averages. Your own use, roof and utility rate plan matter more than any average, so treat these figures as a starting point and check them with your bills and a quote.
The federal tax credit
The 30% Residential Clean Energy Credit does not apply to systems placed in service after December 31, 2025 (IRS), so the payback here includes no federal credit. State or utility incentives, if your area has them, would shorten it.
Frequently asked questions
How many solar panels does a house in Colorado need?
To cover the average home's use of 674 kWh a month, about 5.2 kW, or 14 panels of 400 W. Your own number depends on your use and your roof.
How much does solar save in Colorado?
A system that covers the average home's use would produce about $1,352 worth of electricity a year at the average price of 16.72¢/kWh, if every kWh is credited at the retail rate.
Is solar worth it in Colorado?
At $3.20 to $5.50 per watt installed, the payback for an average home is about 12.3 to 21.2 years with full net metering and no federal tax credit. Lower export credits make it longer.