Two options, and they are not close in value
Under the Xcel arrangement excess generation from a net metered system rolls over month to month and year to year and is held in a Solar Bank. Option A is continuous rollover: the credits never run out and can be used whenever your consumption exceeds your generation.
Option B is a year-end payout. Xcel cashes out the Solar Bank at the end of the year and sends a cheque for the excess energy, purchased at the average hourly incremental cost of electricity from the previous 12 months.
That purchase price is not the retail rate. It is a wholesale-style measure of what the electricity cost the utility to supply, which is why a kilowatt hour that offsets your own consumption is worth considerably more than the same kilowatt hour cashed out at year end.
The design conclusion follows from the difference rather than from the choice. Whichever option you elect, credit that survives to the end of the year is the least valuable output your system produces, so a system sized to generate a large annual surplus is converting capital into the cheapest possible product.
Waiving the decision is itself a decision
If the election is waived, the customer defaults to the year-end payout. There is no neutral third state where the question stays open, so a homeowner who never engaged with the paperwork has chosen Option B by not choosing.
This is easy to let happen. The election sits inside an interconnection packet alongside a great deal of routine paperwork, and nothing in a sales conversation necessarily flags it as a decision with money attached.
Ask your installer which election your paperwork specifies, and ask to see the line. An installer who works Xcel territory routinely will know exactly where it is, and hesitation on this question tells you something about how carefully your project will be handled.
If your system is correctly sized to your consumption, the practical difference between the options is small, because there should not be a large surplus to treat either way. The election matters most precisely when the system was oversized, which is the case where you have already lost the larger amount.
What happens to the bank if you move
Under continuous rollover the Solar Bank cannot be cashed out, and no credit is given if you move or stop service. Credits you accumulated and did not use simply end when the account does.
That makes your expected time in the house a real input to the election rather than a soft consideration. A household planning to stay twenty years and a household planning to sell in four are not facing the same question.
It also cuts against the intuition that banking credit is a form of saving. Banked credit is not a balance you own in a transferable sense; it is a claim against future consumption on this specific account.
Talk about your likely timeline honestly when the election comes up. It is one of the few places in a solar project where a personal circumstance, rather than a fact about the roof, should change the paperwork.
The parts that survive without qualification
The 30 percent federal Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025, so a cash or loan purchase in Lakewood receives no federal tax credit. A quote that still applies one is overstating your return by roughly a third.
Section 48E, the commercial credit, survives at 30 percent and can be claimed by a third-party owner under a lease or power purchase agreement. Ask what the provider claims and what portion actually reaches you in the rate, and confirm with a tax advisor.
What remains is full retail net metering with the Solar Bank election, Solar*Rewards if you enrol and accept the Renewable Energy Credit trade, the property tax exemption for residential systems of no more than 100 kW AC under Section 39-3-102 C.R.S., and the residential energy sales and use tax exemption.
Ask any installer to rebuild the projection from those alone, and to state which Solar Bank election the model assumes. A projection that carries surplus forward at the retail rate indefinitely is describing something the tariff does not do.