SB261: Implications for Residential Solar

Colorado Solar Incentives
Solar Legislation in Colorado Brings Savings

Solar legislation is not a static thing. Each year new and dynamic policy gets passed across the country. Some policies remove restrictions on community solar projects, others pertain to residential solar. In Colorado, Senate Bill 261 (SB 261) is aimed at the latter — it would remove some of the restrictions on residential solar to help it grow and expand in Colorado.

What’s in the Colorado SB 261?

First things first, let’s cover what’s actually in the bill. SB 261 has not been passed yet, though it has cleared the Colorado Senate. The bill is broken down into multiple sections, each of which pertains to an aspect of current residential solar standards. The Colorado General Assembly released a rundown of the bill, wherein it becomes clear that sections three, five, and six are the most important sections for residential solar. 

What’s in Section Three?

Section three is where the bill begins digging into common issues with residential solar in Colorado. Firstly, section three removes the cap on residential solar capacity. Previously, homes were not allowed to add a solar installation of more than 120 percent of their annual usage.

Secondly, section three expands one particular exemption of great importance to solar homeowners. Currently, some solar energy production facilities are exempt from being categorized as public utilities. Being an official public utility comes with a host of regulations that can be difficult for small organizations to follow. However, section three would exempt homes with solar installations from these regulations, allowing them to be freer with energy production. 

What’s in Sections Five and Six?

Section five updates the net metering policy. Under section five, qualifying energy utilities would be required to offer net metering agreements with homeowners. It also doubles the capacity of on-site solar installations available for net metering — going from 500 kW to 1 mW. This is particularly important for homeowners who want to add battery backup. Homeowners will be able to use their energy throughout the day, store some for the night, and still send excess power to the grid in the afternoon. 

Additionally, it also allows net metering credits to be carried forward indefinitely, though no more than 100 percent of their yearly energy use can roll over. Homeowners can choose to have their credits cashed out at the end of the year. They can also have the excess donated to low-income households. More options available means more flexibility for homeowners.

Finally, in section six, approximately $91,000 is appropriated to implement the infrastructure necessary to make these changes happen. 

How the SB 261 Impacts Residential Solar

How does SB 261 help homeowners interested in going solar? While on the surface it may not immediately impact some homeowners, the bill is going to be an important part of solar growth in Colorado. 

The Bill Makes It Easier for New Homeowners To Save

Previously, there may have been potential solar homeowners who resisted getting it installed because they feared that there wouldn’t be enough savings. Because the cap on installation size would be removed, it would be easier for homeowners to install enough solar panels to make the savings worthwhile. 

Additionally, by removing some of the existing regulations on residential solar installations, homeowners will be able to keep more savings that they had lost. While Colorado already has good solar incentives available, the bill would expand those even more. 

Finally, the bill would ensure that electric utilities would have to offer net metering agreements to customers. This is very important because it allows homeowners to add larger solar installations than before, but secure in the knowledge that they will still be able to come to an agreement with their utility. 


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