Utah Solar Tax Credits, Incentives and Rebates (2024)

While all Utah residents can claim the federal tax credit, the financial incentives available from the state government and utility companies are limited. While the state offers a tax credit and solar battery incentive, there are no Utah solar rebates, property tax exemptions or sales tax exemptions.

Renewable Energy Systems Tax Credit (RESTC)

Incentive value: 25% of solar system costs or $400, whichever is less

Frequency: One-time incentive when installing a photovoltaic system

The Renewable Energy Systems Tax Credit (RESTC) is the only solar power incentive the Utah state government offers. It is also available for wind turbines, geothermal systems, hydroelectric generators, biomass systems and some renewable thermal technologies. You can claim the RESTC for 25% of your solar project costs under the following limitations:

• You can claim 25% or up to $400 for solar PV systems, whichever is less.
• You can claim 25% or up to $2,000 for other renewable energy systems, whichever is less.

If you considered a 6 kW solar panel system priced at $16,680, an uncapped 25% tax credit would equal $4,170. But you would only get $400 in this case, which only covers 2.4% of your solar investment.

Initially, the RESTC had a higher limit per solar installation. You could claim up to $1,600 between 2017 and 2020, up to $1,200 in 2021 and up to $800 in 2022. The benefit will no longer be available for home solar systems after Dec. 31, 2023.

You can find tax credit applications and a video outlining the process on the Utah Office of Energy Development’s website. There is an application fee of $15, which must be paid by credit card. If your application is approved, you will receive a TC-40E Form to formally deduct the income tax credit.

The Utah solar tax credit is more favorable if you’re considering solar panels for a commercial building. While the rate is 10% instead of 25%, the maximum amount you can receive is $50,000 per solar project. So a business owner who installs a 300 kW solar array worth $500,000 would see the maximum tax credit of $50,000.

Rocky Mountain Power Wattsmart Battery Program

Incentive value: $400 per kilowatt of battery capacity upfront, then $15 per kilowatt per year

Frequency: Upfront and annual payouts

Rocky Mountain Power is the largest electric company in Utah, serving 75% of the state’s territory. Customers who install solar panels with an energy storage system can utilize the Wattsmart Battery Program, which offers the following benefits:

• An upfront rebate of $400 per kilowatt of battery capacity, covering up to 70% of equipment costs.
• An annual electric bill credit of $15 per kilowatt, starting from the second year.

So for example, a battery with a rated power output of 5 kW would qualify for $2,000 upfront and $75 per year.

To participate in this rebate program, you must install solar batteries approved by Rocky Mountain Power.

Utah introduced a state net metering policy for renewable energy systems in 2002, which also covers lithium-ion batteries. Rocky Mountain Power offers net metering for residential solar energy systems up to 25 kW and non-residential systems up to 2,000 kW. If you receive electricity from a smaller municipal utility or electric cooperative, net metering availability may vary.

Rocky Mountain Power has the largest net metering program in Utah. With net metering, the company will pay you for the excess energy your panels generate in exchange for electricity bill credits. The tariff rate or amount you receive for your energy production depends on the month:

• June–September: 5.636 cents/kWh
• October–May: 4.745 cents/kWh

You can roll unused credits over to the next month, but unused balances expire once per year.

How To Enroll in Net Metering

Your solar installer can help connect your system with the Rocky Mountain Power grid and ensure your panels meet the company’s interconnection requirements. Once connected, you can participate in net metering.

You must complete the following steps to interconnect your solar panel system with Rocky Mountain Power and participate in net metering:

1. Complete the customer generation application and interconnection agreement
2. Submit the application and pay any corresponding fees and taxes
3. Wait for email approval from Rocky Mountain Power
4. Complete your solar installation and get an inspection from a local authority like your city or county electrical inspector
5. Submit your approved inspection to Rocky Mountain Power
6. Rocky Mountain Power will install a bidirectional power meter within 10 days, after which you can generate solar electricity and participate in net metering

This process generally takes 70 days, including 30 days for installation and approval, 30 days for inspection and 10 days to place the power meter.

The federal solar tax credit, officially called the Investment Tax Credit (ITC), allows you to deduct 30% of your solar system cost from your federal tax burden. In other words, you get a tax deduction of $300 for every $1,000 invested in photovoltaic (PV) systems and other clean energy technologies.

You can claim the federal tax credit for the year you install a solar power system. If your tax liability is not high enough to deduct the full incentive, you can roll over the difference to the next year. You can combine the federal tax credit with state tax credits and other local incentives to lower your installation costs, which helps reduce your panel payback period.

The average cost of solar panels in Utah is $2.78 per watt or $16,680 for a 6 kilowatt (kW) system. The below table summarizes typical solar costs for various system sizes, including the cost before and after the federal tax credit.

According to the Solar Energy Industries Association (SEIA), the federal tax credit helped the U.S. solar industry achieve a growth rate of 24% per year over the last decade. The solar federal tax credit recently increased from 26% to 30%, thanks to the Inflation Reduction Act. It will drop to 26% in 2033 and 22% in 2034 before expiring in 2035.

Local electricity prices in Utah are among the lowest in the U.S. at 10.78 cents/kWh, according to the U.S. Energy Information Administration. Solar panels are very productive due to the abundance of sunshine in Utah, but low electricity prices mean the savings per kilowatt-hour are not as high as in other states.

You can estimate the productivity of a solar power system using the Global Solar Atlas. You can zoom into your location and click on the map to display detailed information about solar resources. Look for the specific photovoltaic power output, which is measured in kilowatt-hours produced per kilowatt of peak solar capacity (kWh/kWp).

• For example, if you click on Salt Lake City, you will find a solar productivity value of around 1,600 kWh/kWp.
• You can estimate the annual productivity of a solar power system by multiplying this value by your solar system size.
• So at 1,600 kWh/kWp, a 5 kW system would produce around 8,000 kWh per year while a 10 kW system would produce around 16,000 kWh per year.
• Considering an electricity price of 10.78 cents/kWh, a 5 kW system generating 8,000 kWh per year can potentially save $862 in annual energy bills.

A 5 kW rooftop solar system costs around $13,900 in Utah. When you subtract the 30% federal tax credit and the $400 state tax credit, your out-of-pocket cost drops to around $9,330. Considering $862 in annual energy savings, your payback period is around 10.8 years.

A payback period of 10 or more years may seem long, but the best solar panels have a lifespan of around 25 years and come with a 25- to 30-year warranty. In other words, the warranty-covered service life is more than double your payback period — so you can recoup the cost of your system and continue to benefit from energy savings for a decade.

To make the process of selecting a solar installer easier, we have compiled a list of the top companies in Utah based on factors such as cost, financing options, brand reputation, and warranties using our comprehensive rating methodology. We recommend getting a quote from at least three of the providers below before making a decision.

Company	Star Rating	Cost of an 8 kW System*	BBB Rating	Visit Site
Our Top Pick SunPower GET QUOTE	4.8	$24,000–$36,000	A+	GET QUOTE
Blue Raven Solar GET QUOTE	4.4	$20,000–$22,500	A	GET QUOTE
Palmetto Solar GET QUOTE	4.7	$20,000–$25,000	A+	GET QUOTE
Tesla Energy GET QUOTE	4.2	$16,000–$23,000	A+	GET QUOTE

Company	BBB Rating	Star Rating	Cost of an 8 kW System*	Visit Site
Our Top Pick SunPower GET QUOTE	A+	4.8	$24,000–$36,000	GET QUOTE
Blue Raven Solar GET QUOTE	A	4.4	$20,000–$22,500	GET QUOTE
Palmetto Solar GET QUOTE	A+	4.7	$20,000–$25,000	GET QUOTE
Tesla Energy GET QUOTE	A+	4.2	$16,000–$23,000	GET QUOTE

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While Utah does not have as many solar resources as states like California, you can still take advantage of incentive programs to lower the cost of your home solar system. Local energy costs in Utah are low compared to the rest of the U.S., which means your solar payback period may be longer than in some other states. However, you can ensure a return on investment by purchasing high-quality solar panels with a long warranty and using a professional solar installation company.

Utah residents can claim a state tax credit worth $400 for residential PV systems up to 25 kW in size, which you can combine with the 30% federal tax credit. If you’re considering energy storage for your solar panel system, you can also benefit from the Rocky Mountain Power Wattsmart Battery Program. Together, these incentives can help lower your overall cost of going solar in Utah.