To Solar or Not to Solar? That Is the Question.

Oct 25

Solar leases in Colorado...a good investment?

The real cost, the resale value, and what Colorado homeowners should know before putting panels on their roofs.

Colorado has more than 300 days of sunshine in a typical year, depending on how sunshine is measured, so you might assume solar panels are a no-brainer. Lower electricity bills, cleaner energy, and potentially a more valuable home? Sounds like a win. BUT, as a real estate agent, I look at solar through a slightly different lens. Not just whether it saves money on your electricity bill, but whether it makes financial sense for your property, how it affects resale, and what happens when you decide to move.

Because here's the thing: solar can be a fantastic investment for one homeowner and a surprisingly expensive mistake for another. And in 2026, with major changes to federal tax incentives, the conversation has become even more interesting. Let's look at the research, the real-world examples, and the questions I think every homeowner should ask before signing a solar contract.

First, What Does Solar Actually Cost?

According to Lawrence Berkeley National Laboratory's Tracking the Sun research, the median installed price for residential solar systems in 2024 was approximately $3.50 per watt for cash purchases and $4.70 per watt for loan-financed systems. For a typical 7-kilowatt residential system, that translates to approximately $24,500 if purchased outright or $32,900 when financed. These are historical national averages rather than current Colorado quotes, but they illustrate just how significant the investment can be. And that's before considering roof repairs, electrical upgrades, battery storage, or future maintenance.

One of the biggest changes for homeowners considering solar in 2026 is the elimination of the federal Residential Clean Energy Credit for systems installed after December 31, 2025. Previously, qualifying homeowners could receive a federal tax credit equal to 30% of eligible installation costs. That incentive made the economics considerably more attractive, and without it, homeowners need to look even more carefully at how long it will take to recover their investment.

When Solar Makes Sense: A Real Colorado Example

One particularly interesting study comes from the National Renewable Energy Laboratory (which is quite literally in our backyard :), which examined the performance of an actual 9.66-kilowatt residential solar system in Colorado over three years. Despite some shading from trees, utility poles, and power lines, the system performed close to expectations. Researchers calculated an estimated payback period of approximately nine years, factoring in the rebates and tax incentives available at the time. The study was published in 2012, so those financial conditions aren't directly comparable to 2026, but it demonstrates how well solar can perform when installation costs, sunlight, electricity savings, and incentives align.

Imagine a family in Golden planning to stay in their home for the next 20 years. They have a newer, unobstructed roof, substantial electricity usage, and the ability to purchase the system outright. For them, solar could be an excellent long-term investment. Over time, lower electricity bills may offset the upfront cost, particularly if utility rates continue increasing. But take that same system and install it on a home the owners plan to sell in three years, and the financial picture changes dramatically.

When Solar Doesn't Make Sense: Lessons From California

California provides a fascinating real-world example of how quickly solar economics can change. For years, California was one of the most attractive places in the country to install residential solar, thanks to high electricity prices and favorable compensation for electricity homeowners sent back to the grid. But in 2023, the state implemented a new net-billing structure, commonly called NEM 3.0, for new customers of its major investor-owned utilities. The policy significantly reduced the compensation many homeowners receive for excess solar electricity.

Research from Lawrence Berkeley National Laboratory documented the market effects of this transition, highlighting how utility policies can influence solar adoption and financial returns. The takeaway for Colorado homeowners is important: solar isn't just about how much sunshine hits your roof. It's also about what your utility company pays for the electricity you produce. A system that makes excellent financial sense under one rate structure can become substantially less attractive under another. Before installing panels in Golden, Lakewood, Wheat Ridge, or Arvada, understanding your utility provider's current net-metering policies is absolutely essential.

The Million-Dollar Question: Does Solar Increase Your Home's Value?

This is where things get particularly interesting from a real estate perspective. A lower monthly electricity bill is certainly appealing to buyers, but that doesn't automatically mean someone will pay an additional $30,000 for a home simply because it has a $30,000 solar system. One of the most widely cited studies on this subject comes from Lawrence Berkeley National Laboratory's Selling Into the Sun research, which analyzed 22,822 home sales across eight states, including 3,951 homes with solar systems. Researchers found that buyers paid an average premium of approximately $15,000 for homes with an average-sized, homeowner-owned solar system.

That's meaningful evidence that solar can contribute to resale value. However, the research examined transactions from 2002 through 2013, and the premiums shouldn't be applied directly to today's Denver-area housing market. A more recent 2024 academic study, How Is Rooftop Solar Capitalized in Home Prices?, also explored how the economic benefits of solar are reflected in property values. The larger point is that buyers may recognize the value of future energy savings, but the amount they're willing to pay depends on the system, the property, and the market.

From my perspective, there's also an enormous difference between a home with fully owned solar panels and one with a financed or leased system. Imagine a beautiful Applewood home with a newer roof, fully paid-off panels, and documented electricity savings. That's an attractive feature for a potential buyer because the benefits come without an additional monthly obligation. Now imagine a similar home in Arvada where the seller still owes $28,000 on a solar loan. Suddenly, the transaction becomes more complicated. Does the seller pay off the balance at closing? Can the buyer assume the loan? Are there liens or other financing requirements that need to be resolved?

Leased solar systems introduce another layer of complexity. A buyer may need to qualify to assume the existing lease and agree to its terms, depending on the contract. Some buyers may appreciate the lower electricity costs, while others may see the lease as an unwanted financial obligation. In fact, a separate Berkeley Lab study examining nearly 20,000 California home sales found evidence of price premiums for homeowner-owned solar systems but not for third-party-owned systems such as leased panels. The study also found no clear overall sales-price penalty for those third-party-owned systems. The distinction matters: solar can have value without necessarily increasing the price a buyer is willing to pay.

The Hidden Expense Nobody Talks About: Your Roof

One of the most overlooked considerations when installing solar is the condition of the roof underneath it (I have had two transactions just this year, where sellers had a current solar lease and the roof needed to be redone). According to the U.S. Department of Energy, most solar systems retain at least 80% of their initial power output for 25 years or longer. That's impressive longevity, but what happens if your roof needs replacing in five years? You may need to pay to have the panels removed, replace the roofing materials, and reinstall the solar equipment. That can create a significant unexpected expense and extend the time it takes to recover your original investment, or close the home.

This is especially relevant for older homes throughout Golden, Wheat Ridge, Lakewood, and Denver, where roofing materials and installation dates vary considerably. If your roof is nearing the end of its useful life, I'd strongly recommend addressing that before installing solar. On the other hand, if you're already planning a roof replacement, it may be an ideal opportunity to evaluate solar installation at the same time.

Let's Talk Actual Numbers

Consider a hypothetical Denver-area homeowner who installs a solar system for $24,500 and saves approximately $1,800 annually on electricity. Ignoring financing costs, maintenance, equipment replacement, and changes in electricity rates, the simple payback period would be approximately 13.6 years. If that homeowner stays in the property for 20 years and those savings remain consistent, the system would generate approximately $36,000 in electricity savings against the original $24,500 investment. That's a positive difference of $11,500 before accounting for the time value of money or other expenses.

Now consider another homeowner who pays the same $24,500 but saves only $900 annually because their electricity usage is lower or their roof produces less energy. Their simple payback period jumps to more than 27 years. That's a dramatically different investment. And if either homeowner decides to sell after four or five years, they may not have recovered much of the upfront expense through electricity savings alone. Whether they recover additional value through the sale depends on what buyers in their specific market are willing to pay.

These are illustrative calculations rather than actual Colorado installations, but they demonstrate why I don't believe solar should ever be marketed as a universally smart financial decision. The U.S. Department of Energy makes a similar point in its homeowner guidance: the economics depend on installation costs, energy consumption, electricity rates, financing, and available incentives.

So, Is Solar Worth It in Colorado in 2026?

I think solar deserves serious consideration if you have a newer roof, excellent sunlight exposure, relatively high electricity usage, favorable utility terms, and plans to stay in your home for the foreseeable future. It becomes even more attractive when you can purchase the system outright rather than take on expensive financing. Colorado has historically offered relatively favorable net-metering arrangements through certain utilities, although the exact rules and financial benefits vary by provider and applicable rate structure.

I'd be much more cautious if you're planning to sell within the next few years, your roof needs replacement, your electricity bills are already low, or the financial projections depend on overly optimistic assumptions. I'd also be wary of sales presentations that focus exclusively on your estimated monthly payment rather than the total installed price, financing fees, realistic electricity production, and long-term maintenance.

Before signing anything, I recommend getting at least three detailed installation proposals and asking each company to provide estimated annual production, the total cash price, the total financed cost, equipment warranties, and a realistic payback analysis. The Department of Energy's PVWatts tool is also an excellent independent resource for estimating solar production based on a property's location and system specifications.

My Take: The Best Home Improvements Aren't Always the Most Expensive Ones

I love thoughtful home improvements, especially those that make a property more efficient, comfortable, and appealing to future buyers. But not every improvement delivers the same return, and solar is a perfect example of why homeowners need to look beyond the marketing.

Sometimes solar is absolutely the right investment. Sometimes that money would be better spent replacing an aging roof, improving insulation, upgrading windows, or making other improvements that enhance both everyday living and resale appeal. And sometimes, particularly if you're considering selling in the near future, the smartest decision is to leave the roof exactly as it is.

Solar isn't inherently a good or bad investment. It's a property-specific investment, and the numbers need to make sense for your home, your timeline, and your financial goals. Before committing tens of thousands of dollars to your roof, think about how long you plan to own the property, what the actual energy savings will look like, and how the decision could affect your eventual resale.

Because a smart home investment should make sense not just while you're living there, but when it's time to move on.

If you're considering solar, buying a home with existing panels, or preparing to sell a solar-equipped property in Golden or the Denver Metro area, I'd love to help you evaluate the real estate side of the equation.

Homes by Halley | Golden, Colorado & Denver Metro Real Estate