Net metering in Colorado, explained
Colorado Net Metering
Net metering is state law in the State of Colorado. If you're an Xcel customer in Denver, the solar power you send to the grid offsets the power you buy, and leftover credits roll forward with no expiration.
The decision that matters most once you have solar is your rate plan. Xcel puts homes on time of use by default. For many solar homes, switching to Xcel's flat rate makes each solar credit worth more. Below we show why, with real numbers, so you can tell which decision is best for you.
What net metering is
Solar panels make the most power at midday, when most homes use the least. Net metering lets that extra power flow out to the grid and come back to you as a credit on your bill. At night, or on a cloudy day, you draw power from Xcel as usual, and your credits pay for it.
Think of the grid as a battery you don't have to buy. Your meter runs both ways, and Xcel bills you on the difference.
Colorado law requires its investor-owned utilities, Xcel Energy and Black Hills Energy, to offer net metering. Municipal utilities and rural co-ops set their own rules, so homes outside Xcel territory can work differently.
How Xcel credits your solar
Xcel uses a two-way meter that counts the power you pull from the grid and the power your panels push back. Each month, what you export offsets what you buy. Any extra becomes a credit that carries forward to future bills.
A credit is worth the full energy rate, meaning the base rate plus the per-kWh riders that make up most of a real bill. Our guide to the true cost of Xcel power per kWh breaks those riders down.
What changes the value of your credits is your rate plan:
- On time of use, power is netted within each time period. Solar made off-peak offsets off-peak use, and any extra is credited at the off-peak price. Your 5–9 p.m. weekday use is billed at the on-peak price.
- On the flat rate, every kilowatt-hour is worth the same, whenever it was made or used.
Time of use or flat rate: which should you pick?
If your panels cover most of what your home uses, the flat rate usually wins. Time of use pays off only if you buy a lot of power overnight and very little on weekday evenings.
Xcel's two residential rates
| Rate | When | Summer (Jun 1–Sep 30) | Winter (Oct 1–May 31) |
|---|---|---|---|
| Time of use, on-peak | 5–9 p.m., weekdays | 21.277¢/kWh | 18.331¢/kWh |
| Time of use, off-peak | All other hours, weekends, holidays | 7.884¢/kWh | 6.792¢/kWh |
| Flat rate (opt-out) | All day | 10.380¢/kWh | 8.570¢/kWh |
These are base rates. Every bill also carries riders, fees and taxes, which roughly double the real cost per kWh on either plan, plus a $7.10 monthly Service & Facility charge. Source: Xcel Energy
Why time of use works against most solar homes
Panels make nearly all their power between mid-morning and late afternoon. On time of use, that's off-peak, so your solar credits are worth the cheapest rate of the day. Meanwhile, the power you use when the sun goes down on a weekday is billed at the most expensive rate.
On the flat rate, a kilowatt-hour you make at noon cancels a kilowatt-hour you use at 7 p.m. evenly.
An example
Take a home whose panels make about as much power as it uses. Most of the solar lands midday, while part of the home's use lands on weekday evenings. Here's one month on each plan:
Same solar, same usage: time of use costs about $17 more
One summer month · home uses 700 kWh, panels make 700 kWh · Xcel base rates
Time of use
Midday: 130 kWh extra solar to gridCredited at off-peak 7.884¢ = −$10.25
Weekdays 5–9 p.m.: 130 kWh from gridCharged at on-peak 21.277¢ = $27.66
Flat rate
Midday: 130 kWh extra solar to gridCredited at 10.380¢ = −$13.49
Weekdays 5–9 p.m.: 130 kWh from gridCharged at 10.380¢ = $13.49
Winter month, same home: $15.00 on time of use vs $0 on flat rate. Riders and taxes widen the gap.
Same home, same panels, same usage: about $15 to $17 a month more on time of use. That's roughly $190 a year at base rates, and more once riders and taxes are added, just from the rate plan.
A rule of thumb
Compared with the flat rate, each kilowatt-hour you buy on-peak costs about 10¢ more, and each one you buy off-peak saves only 2¢ to 2.5¢. So time of use only breaks even if, after your solar, you buy four to five times as much power off-peak as on-peak.
The flat rate likely fits you if:
- Your solar covers most of your yearly use
- Someone is home on weekday evenings, cooking, running AC, or doing laundry
- You'd rather not think about when you run appliances
Time of use may fit you if:
- You charge an EV overnight, or your panels cover only part of your use, so you buy a lot of off-peak power
- Your home uses very little energy between 5 and 9 p.m. on weekdays
- You have a battery that carries your home through the evening peak
How to switch
Compare both plans with the Rate Comparison Tool in your Xcel My Account, which uses your actual usage. You can opt out of time of use there at any time, or by calling Xcel at 800-895-4999. If you opt out and later return to time of use, you have to stay on it for 12 months.
How big your system can be
Xcel allows a net-metered system expected to produce up to 200% of your home's consumption over the previous 12 months. That limit comes from state law, which caps home systems at twice your reasonably expected yearly use.
What net metering doesn't cover
- The monthly Service & Facility charge. Solar credits offset energy charges only. The fixed monthly fee stays on your bill, about $7.10 today.
- Your gas bill. Many Denver homes get both electricity and gas from Xcel. Solar credits apply to the electric side only.
- A new owner. Credits belong to whoever is on the Xcel account, not to the house. When a home changes hands, the new account holder starts fresh and makes their own Solar Bank election.
Net Metering as a Colorado law
Net metering in Colorado is a state law, which makes it harder to take away than in many states. But the law protects how your credits work, not what they're worth.
Where the law comes from
Colorado's net metering rules sit in C.R.S. 40-2-124, the state's renewable energy standard. It started as Amendment 37, a 2004 ballot measure that voters passed 1,066,023 to 922,577. Despite the name, Amendment 37 created a state law, not a constitutional amendment. The legislature has amended it many times since, in 2005, 2007, 2009, 2010, 2013, 2019 and 2021.
The net metering rules apply to investor-owned utilities like Xcel and Black Hills Energy. Municipal utilities and rural co-ops are exempt and follow their own, looser rules.
What the law guarantees Xcel customers
| Protection | In plain English |
|---|---|
| Offset | Xcel must let the power your system makes offset the power you use. (The 1:1 ratio comes from the PUC's rule, below.) |
| Indefinite carry-forward | Extra value rolls forward month to month, with no expiration, until you close service at all your addresses. |
| Year-end payout option | You can choose in writing to be paid for a yearly surplus at Xcel's average hourly incremental cost. |
| Size | Your system can be sized to supply up to 200% of your expected yearly use. |
| Same rate class | Regulators can't move you to a different rate class just because you net meter. |
| Fair process | Xcel can't put unreasonably burdensome requirements on interconnection or payouts. |
A separate law, C.R.S. 40-2-135, adds that customers are entitled to generate, use, store, and export power from their own renewable systems, subject to safety and interconnection rules.
Where the 1:1 credit comes from
The statute requires an offset, but it doesn't say how many kilowatt-hours a credit is worth. The 1:1 ratio comes from the PUC's own net metering regulation, Rule 3664 (4 CCR 723-3-3664). It requires Xcel to carry excess kilowatt-hours forward month to month and credit them at a ratio of 1:1 against your future use. On time of use, 1:1 applies within each time period: a kWh made off-peak cancels a kWh used off-peak.
What this means with Open Sun
With Open Sun, you stay on your own Xcel account, so net metering works exactly as it would if you owned the panels. Your credits show up on your Xcel bill and lower it. You pay us one flat monthly fee, and together the two come in at least 20% under what you pay Xcel today.
We size every system from your past bills, and before your system turns on we'll look at your usage with you to see whether time of use or the flat rate saves you more.
If the law ever changes in a way that stops working for you, our no lock-in promise still stands: we'll take the panels down.
Common questions
Does Colorado still have net metering in 2026? Yes. State law requires Xcel and Black Hills Energy to offer it, and credits roll forward with no expiration.
Should I stay on time of use after going solar? Often not. If your panels cover most of your use, the flat rate usually makes your solar credits worth more. Run Xcel's Rate Comparison Tool in My Account to check with your own usage.
Can I switch back and forth? You can opt out of time of use at any time. If you later go back to it, you have to stay for 12 months.
Will Xcel send me a check for extra solar? Only if you elect a year-end payout, and it's paid at Xcel's wholesale cost, about 1 to 3 cents per kWh. Otherwise credits keep rolling forward.
What happens to my credits if I sell my house? Credits belong to whoever is on the Xcel account, not the home. Once you close your account, Xcel isn't required to pay out leftover credits.
Does net metering work if I don't own the panels? Yes. Credits go to whoever is on the Xcel account, which is you, whether you own the panels or use a service like Open Sun.
Do I still pay Xcel anything with solar? Yes. Credits don't cover the $7.10 monthly Service & Facility charge, your gas bill, or any power you use beyond your credits.
Could net metering go away? It would take a change to state law, or a ruling within the room the law leaves regulators.
Sources
- Xcel Energy: Time of Use: rates, on-peak hours, flat-rate opt-out, 12-month rule
- Xcel Energy: Net Energy Metering: 200% sizing limit, guidance on time of use vs flat rate for solar
- C.R.S. 40-2-124: Colorado's net metering statute, its history, and the Amendment 37 vote
- C.R.S. 40-2-135: customers' right to generate, store and export power
- PUC Rule 3664 (4 CCR 723-3-3664): the 1:1 kWh credit and month-to-month carry-forward
- Xcel Energy: Solar Bank Election Form: year-end payout rates, 2018–2023
- Environment America: PUC decision on Xcel's net metering proposal
- Colorado Springs Utilities: Approved changes for solar customers