Updated Jan 10, 2023
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The state of Utah has come a long way when it comes to solar rebates and solar panel costs. If you have been on the fence about whether or not your solar project should happen, now could be the time. In our guide detailing these Utah solar incentives, tax credits, and rebates, we provide:
The great thing about Utah is that in addition to a state tax credit and federal tax credit, there are also incentive programs from other energy providers. Your home solar system could be much less expensive than you once thought.
Solar energy in Utah can help reduce the total costs you pay for electricity each year. Utah homeowners know how the winters can bring some freezing temperatures and snow, and being able to heat the house without worrying about an impact on the heating bill is a tremendous benefit.
In addition, Rocky Mountain Power has created some programs to help decrease energy costs for those who take advantage of these green energy savings. Utah ranks 12th in the nation for its solar power initiatives.
This ranking means that the state offers tremendous solar rebates and access to solar panel providers throughout the state. The higher the ranking, the more people are taking advantage of and capitalizing on the solar power initiatives in the state.
Solar costs have gone down slightly in Utah through the years. One of the reasons they go down in price is because of better Utah solar rebates, financing options, and decreased tax liability. The cost of a system remains around $20,000, depending on the size of the home and the associated installation costs.
The key for all Utah homeowners is to take advantage of any programs available to help save money on the solar power system. These programs should be researched before the installation and purchasing process starts.
Sometimes there are requirements involved that can make you eligible for other incentives, and it is worth paying close attention to these.
Luckily, Utah has a Utah Solar Tax Credit at the state and federal levels. While Utah state offers these incentives, you can save thousands of dollars on your home solar system. However, many incentives will expire at the end of December 2023. Although these programs could be renewed, it’s best to take advantage of them while they’re still there.
|Federal Solar Tax Credit (ITC)||Utah residents can take advantage of the Federal Solar Tax Credit and get a discount of up to 30% applied to their tax return. If you purchase $20,000 worth of solar panels, you can get a credit for $6,000 on your next tax return. Remember, this does require you to come out of pocket first.||December 31st, 2032|
|Utah Solar State Tax Incentive||A state tax incentive of up to 25% of the total cost of the unit is another great way to save money in Utah. This will cap out at $800, and the program is set to expire in 2024.||None|
|Net Metering||Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill. Although net metering is not mandatory in Utah, many providers take advantage of it and offer fair rates.||None|
|Dominion Energy Residential Efficiency||Dominion energy offers savings on any type of energy-efficient upgrade made to a home. There is a cap on the amount that you can claim but the total amount for a solar hot water heater is currently $750.||None|
The Federal Solar Investment Tax credit is available in all 50 states, Utah included. This program will give you a fairly sizable refund on your next federal tax return.
The program allows you a tax credit of 30% of the cost of your solar installation. You must pay for the solar system out of pocket upfront, and then it will come back to you as part of the following year’s tax return. Although you will have to front the money for this project, it will be returned within a short period of time. Even if your tax burden is not that high for this year, the taxpayer credit will remain in place until you need it. As it currently stands, this tax credit program will be in place through the end of 2032.
Utah offers a state-specific energy tax credit as well. This is called the Renewable Energy Systems Tax Credit, and it will allow for up to 25% of your solar system to come back to you as a tax credit at the end of the year.
The only negative thing about the Utah Solar Energy Tax Credit is that it caps out at $800 in 2022. This means that you likely won’t save as much as you do with the Federal, but the two can be combined.
The maximum credit of $800 is set to decrease in 2023 and will no longer be available in 2024 unless something changes with this process.
There is no tax credit for a residential solar system purchase in the state of Utah. Corporate installations have the option to save quite a bit on the system cost by having a 100% reduction in the total sales tax burden. This program that many other states offer for residential homeowners will hopefully be an option for Utah sales tax in the near future.
Property taxes will increase with the installation of a solar system in Utah. The Solar PV system will make your home worth considerably more and be even more appealing to potential buyers. The problem is that improvements like this will increase your tax burden and increase your next tax bill.
Other states offer solar property tax exemption, so this is one of the negatives to installing in the Utah area.
Utah net metering creates more energy than your home needs and supplies some of that energy back to a utility company. Net metering also allows you to bank excess energy to use on a cloudy day or during the summer heat when your solar panels can’t quite keep up with your air conditioning.
In Utah, net metering is not mandatory. However, companies like Rocky Mountain Power have a net metering program that customers can easily tap into. As far as payout is concerned, the Rocky Mountain rates are better than other providers in neighboring states.
With net metering or net billing, you will never be paid per kilowatt hour the same that you would be charged, but in Utah, the two numbers get relatively close. Always be sure to check on the availability of these incentives before you purchase your solar system.
The Dominion Energy Residential Energy Efficiency Rebate program rewards customers for things that make their homes more energy efficient. Whether it’s solar batteries, a smart thermostat, or new windows, you’ll get different incentives from this program.
One of the options that help solar customers save money is the solar-assisted water heating rebate of $750. There is a full list of the incentives on the Dominion Energy website. There are maximum amounts you can claim, but the program is a great way to increase your total savings as you upgrade your home.
The Alternative Energy Development Incentive is for new buildings that are being created to be more energy efficient. This process can be a bit involved, but you can have a 75% reduction in new state tax revenues of the project for the next 20 years.
This incentive takes a lot of paperwork, filing, and paying close attention to the amount your system produces and saves. Be sure to check with the state of Utah before moving forward with a new green energy build.
Commercial Utah solar incentives are quite good. In addition to increased tax savings, there are also loan programs that are specific to the commercial sector. Again, as with residential programs, it is essential to first determine the requirements before installation.
Although there are no specific nonprofit incentives in the state of Utah, plenty of government and commercial savings plans can help your nonprofit become more energy efficient. It’s important to remember that the Federal tax incentive is also for nonprofits, small businesses, and large corporations.
The United States Department of Agriculture offers a REAP grant or Rural Energy for America program to help secure renewable energy resources loans. If you supply your contact information to the USDA, they will help ensure loan financing and grant funding for agricultural producers.
In addition, small rural businesses can also access these resources for installing or upgrading renewable energy systems. With this USDA REAP grant, you won’t have to search for funding or try to negotiate; simply lay out your plans, and the USDA will tell you what is available. PACE financing is another option for financing that all commercial businesses should consider.
The PACE financing program will help secure access to financing and fair rates to ensure that it is worth the price paid to install the solar system. The PACE financing program does not list their rates, as they expect that you will file an application and work with them on your needs for the project.
Depending on the size of the system being installed, the loan can get quite large, and the PACE financing program has a list of different technologies that you will be able to get financing for.
For a federal corporate income tax return, there is a 30% credit against the cost of any system that was placed into the building during that year. If your solar panel installation is tens of thousands of dollars, you may see a large tax incentive for installing solar.
The Federal Solar Tax Credit is still one of the best ways to save money on solar energy, and was recently extended through the end of 2032 via the Inflation Reduction Act.
Dominion Energy offers a similar program for commercial energy efficiency that they do for residential. The program allows for individual incentives and savings depending on the technology installed. One of the biggest you will see in the commercial sector is a $750 credit for the installation of a solar pool heating system.
Net metering is also available at the commercial level for Utah businesses and property owners. Although net metering isn’t quite the same as taking advantage of solar rebates, it can help reduce the system’s overall costs and improve this investment’s long-term financial stability.
The net metering rates are something that can change from one year to the next, and Utah does not guarantee that all utility companies have to offer net metering. Keep this in mind so that you aren’t having difficulty getting your net metering program set up.
The sales tax exemption for the commercial sector is available in Salt Lake City and across the entire state. With this exemption, Utah business owners will not have to worry about any sales tax costs on their system.
With solar systems starting at around $20,000 for commercial and increasing from there, the 6.10 sales tax rate in Utah can leave you with a hefty sales tax bill. Luckily the Alternative Energy Sales Tax Exemption comes into play and saves quite a bit of money.
Installing a Photovoltaic solar power system is a big decision but one that will continue to pay off. Utah homeowners and business owners should take full advantage of federal and state government initiatives to ensure substantial savings. However, these savings programs don’t last forever, and if you truly want to start your solar system, now is the time. Combining federal and state-level tax rebates is your best chance for an affordable solar panel installation.
Solar is worth it in Utah because of the long-term savings on your electric bill. With specific tax incentives and net metering reduction, solar power in Utah is worth the money you will pay. Homeowners and business owners find that having the ability to create your own energy with the sun is a great benefit to the environment as well.
A complete solar system for a home in Utah will typically cost more than $20,000. Some homeowners will install a partial system. This is done to keep costs down, and it can be added to as more money is invested into the system. These partial installations won’t impact the energy bill the same way, but they will undoubtedly offer some reduction in overall costs.
Solar panels are not offered for free in Utah. The commercial institutions will be able to save money on solar with financing programs for clean energy and a solar panel system, but the panels will still be paid for out of pocket.
Currently, the solar rebates in Utah include both federal and state level programs. While state rebates are set to expire in 2024, you’ll still be eligible for a federal tax credit of 30% of your system’s value through 2032.
Utah homeowners continue to install solar panels at a rate that is considerably higher than other states. There are more than 400,000 homes with solar panels in some form, and this number continues to grow.
Solar panels will increase property taxes in Utah, and there are currently no incentives to decrease these taxes and make Utah solar panels more affordable from a long-term tax perspective.
The current Federal ITC programs allow a 30% rebate on the total cost of the solar system. This has been extended through the end of 2032. In addition, there is a 25% rebate on Utah state taxes, and this will max out at $800.
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Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all the solar energy companies on the market so you can have the information you need to make the best choice for your home.
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