In Colorado we are very lucky as we live in a state where the government has been proactive in stimulating the use of renewable energy sources such as photovoltaic systems. The State energy credit for solar installations exempts the 2.9% States based sales tax, and the 1.2% RTD sales tax from all the equipment purchased to build your solar system. Some local municipalities have also chosen to exempt solar PV system from their local sales tax. And some governments entities have gone a step further and reduced the cost of a building permit for a solar installation that often saves hundreds.