Utah gets more sun than almost everywhere else in the U.S., making the Beehive State a fantastic place to go solar at home. Utah offers homeowners a 25% tax credit for residential solar. This is set to expire soon, though, so take advantage while you can!
Reader note: Our top rated solar installer in Utah is currently SunPower.
Other solar incentives in Utah include net metering and a utility rebate for battery storage. The main incentives, though, are the federal tax credit and an average of 6.5 peak sun hours daily. No wonder there are nearly 60,000 solar installations in Utah, producing more than 10% of the state’s electricity.
Utah Solar Incentives
|Utah sate solar tax credit||Utah offers a 25% tax credit for residential solar but it decreases for 2023 then expires in 2024.|
|Solar renewable energy certificates (SRECs)||Utah does not have an active SREC market but RECs can be banked indefinitely, so may be profitable in the future|
|Net metering in Utah||Net metering is allowed in Utah but only one major utility offers it.|
|Utility battery storage incentive||One utility offers an upfront rebate and yearly incentive for installing solar storage batteries connected to the grid.|
State solar tax credit in Utah
The Utah solar tax credit (the Renewable Energy Systems Tax Credit) covers up to 25% of the purchase and installation costs for residential solar PV projects. The credit is being phased out, however, with a cap of $800 until December 31, 2022, then $400 until the credit expires at the start of 2024.
State sales tax exemptions in Utah
Utah offers a state sales tax exemption for solar installations but only for industrial and commercial purposes.
Solar renewable energy certificates (SRECs) in Utah
Utah doesn’t technically have a renewable portfolio standard (RPS). Instead, it enacted The Energy Resource and Carbon Emission Reduction Initiative (S.B. 202) in March 2008, creating a goal for utilities regarding renewable energy. Under this law, utilities need to produce or procure renewable energy to the extent that it is cost-effective.
The goal is for all investor-owned utilities, municipal utilities, and electric co-ops to produce or procure 20% of their 2025 adjusted retail electric sales from renewable sources. There are no interim targets between 2008 and 2025 and no solar carve-out. However, each kilowatt hour (kWh) of electricity produced from solar energy counts as 2.4 kWh towards the goal.
In March 2009, Utah enacted S.B. 99, granting the Public Service Commission the authority to develop a renewable energy credit (REC) system. The PSC has not yet created such a system, however.
The good news is that RECs in Utah do not expire and may be banked. Should the state’s RPS become more robust in the future, banked SRECs may be worth something after all.
Net metering in Utah
Net metering is allowed in Utah but there is only one investor-owned utility, Rocky Mountain Power. This utility offers net billing with energy usage netted in 15-minute intervals. Excess electricity is credited to the customer at a rate of 5.160¢ per kWh for June through September and at 4.462¢ per kWh for October through May.
Under the Rocky Mountain Power net metering program, any outstanding credit at the end of the billing cycle expires without compensation. The utility also receives the rights to any solar renewable energy certificates (SRECs) generated by net billed solar energy producers. This isn’t a huge loss for Utah customers currently as there’s no viable SREC market in the state. However, Utah law allows RECs to be banked indefinitely, meaning there’s a trade-off between short-term compensation and potential future earnings.
Utility battery storage incentive in Utah
Rocky Mountain Power offers its Utah customers a Wattsmart Battery Program rebate and ongoing incentive for those installing solar storage batteries. The catch is that you have to agree to allow the utility to control and dispatch battery charge according to grid needs.
This program comes with an upfront cash incentive of up to $600 per kW. After that, you receive an annual bill credit of $15 per kW starting in year two of the program. This is applied monthly to your regular utility bill.
Final thoughts on state solar incentives in Utah
Utah ranks 12th in the nation for solar installations, with nearly $4 billion invested in solar in the state. Despite a lackluster voluntary renewable portfolio goal, utilities have seen the light and began installing solar arrays in earnest in 2015.
Homeowners in Utah have also signed up to enjoy the benefits of home-grown energy. With all that sunshine, a rooftop solar array makes a lot of sense, despite low electricity costs in Utah and a relative lack of state incentives. If you are considering installing solar in Utah, do it soon. The state’s tax credit drops down at the end of 2022 and then expires at the end of 2023. And remember, you can bank your SRECs in Utah, meaning they may be worth something if the state’s legislators turn that renewable portfolio goal into a standard.