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Utah Solar

Utah is one of the sunnier places in the United States and boasts over 7% of its electricity production from solar. Much of Utah is desert and it also has mountains. It’s home to Salt Lake City and is generally sparsely populated. Utah state government policies favor solar tax incentives. Despite low energy prices and only moderately encouraging utility policies, the tax incentives and sheer abundance of sun make Utah a favorable place for businesses and residents to install solar panels and battery systems.

Let’s learn about some of those incentives, the utility policies associated with interconnection and setup, and special solar financing plans for solar panels and battery systems in Utah.

Utah Solar Incentives

Utah provides multiple solar energy rebates and incentives that help to reduce the overall cost of solar systems. Our EnergyPal Advisors can help you navigate all of the solar incentives available in Utah and also apply them to the available solar panel offerings.

In summary: 

• Utah offers a 25% credit, up to $1,600, on a solar or solar-battery system. It’s applied to your owed income taxes.
• Customers of Rocky Mountain Power can get a cash incentive and annual bill credit for allowing the power company to pull energy from their batteries.
• Good solar easement and rights

Utah Rebates and Tax Breaks

Here are more details about the incentives available in Utah:

• The Renewable Residential Energy Systems Credit is the principal solar incentive in the state of Utah. Residential property owners can be reimbursed 25% of the cost of solar panels, solar systems, solar hot-water heaters, etc. The maximum rebate amount is $1,600, and the credit comes off of your income taxes for the year in which you install the equipment. It can be carried over for four years if needed.
• Rocky Mountain Power offers its customers an upfront cash incentive of $600 per kW if you enroll in a four-year commitment program that allows the electric company to pull energy from your battery. You are compensated $15 per kW of energy. Enrollment in the Wattsmart program is limited.
• Utah law does not allow developers to prohibit solar panel installations on your home. It also provides for solar easements.

Other Solar Energy Incentives

The US federal government helps residents and businesses pay for their solar systems. The federal investment tax credit (ITC) allows for a tax deduction of 30% of the cost of a solar system currently. Tax credits can be rolled over if you can’t use the whole credit this year. The ITC cannot be claimed for solar leases or power purchase agreements (PPAs) where the third party financier takes the credits themselves, but that is typically baked into a reduced lease/PPA monthly for you. For the actual US government bill, see 4908 of the HR 133 (It’s a giant file, so watch out!).

If you purchased a $20,000 system, your savings from the federal tax credit would look like this:

$20,000 X 0.26 = $5,200 savings

You also would save an additional $1,600 by taking advantage of the Utah tax credit. So if you spent $20,000 on that system, your cost would go down to $13,200.

Utility Policies

Utility policy factors determine what your utility provider pays you for the excess power you produce and what you save on your power bill by reducing electricity usage. Utah gets a medium score for utility policies.

Net Metering and Interconnection Policy

One important policy for solar customers is called Net Metering. Net Metering is a billing mechanism that allows solar customers to push electricity to the grid for credit that can be used later, like at night when your solar panels aren’t generating power. This incentivizes people to go solar, provides clean energy for others to use and prevents waste. Some states have poorer net metering policies than others, meaning that credits may not be able to be rolled over to the next month or year, or that you don’t earn full watt-for-watt credit for your excess energy.

Utah’s Net Metering program is less than favorable, but it does have one. You are not always paid full retail credit for your excess energy. If your provider is Rocky Mountain Power, your export rate ranges from $0.056 to $0.059 per kWh, which is about half of the going retail rate. Credits can be carried over into the next month and expire every year. The exact details depend on your electricity provider’s policies.

Solar Setup Fees

You must pay for any setup and interconnection costs and have a bi-directional meter (necessary for Net Metering), which you may have to pay for. Customers of Rocky Mountain Power must pay $60 to join the Net Metering program.

Electricity Prices

Electricity prices in Utah are low. Usually you don’t want high prices, but with solar, the higher the prices, the more you save, and the more economical a solar system becomes.

According to the US Energy Information Administration, the average total cost of electricity in Utah is $0.103 per kWh for residents. The national average for all states is $0.134 per kWh, ranging from $0.967 to $0.288 per kWh.

Rate Design

Rate designs are comprised of monthly fees and either a flat or tiered rate you pay for electricity. Good rate designs, which save you money when you conserve energy, are tiered and have low fixed monthly fees. Poor rate designs have flat rates and high fixed monthly fees. 

Utah is about average when it comes to the quality of its electricity bill rate design. It has a flat rate program but low fixed fees (around $8–$10 per month). Some providers also have a time-of-use program that encourages the use of batteries and solar battery systems.

You still pay fixed monthly fees when you go solar because you are still tied to the grid. Being tied to the grid is a good thing, because otherwise you might not have power at night or if your system stopped working suddenly. Even if you go off of the grid and rely on a battery source, the high cost of the battery would not outweigh the low monthly fee and the savings obtained from a net metering program and the Wattsmart program.

PACE Programs

PACE stands for Property Assessed Clean Energy and is a financing program for solar projects that is tied to the home instead of the homeowner. A residential PACE program is not available in Utah.

Other Energy Financing

Solar systems can be financed by bank loans, solar installer financing, new home mortgages, energy loans and home equity loans or lines of credit. Cash works too. 

Talk to your EnergyPal Advisor about financing solar options in Utah. We regularly source the best deals and terms for our customers.