Utah - Energy tax credit, solar rebates and incentives

Utah Renewable and Solar Energy Incentives

Renewable Energy Systems Tax Credit (Residential/Commercial)

Residential and commercial entities in the state of Utah are offered an income tax credit if they install renewable energy systems on their property.

• Qualified systems: solar heating systems, solar panel (PV), wind, biomass, hydroelectric, landfill gas, geothermal, anaerobic digestion.
• Homeowners are grantedatax credit equivalent to 25% of the installation costs, however the maximum incentive is capped at $2,000 per residence.  Surplus credit may be transferred over to subsequent years for up to 4 years.
• Commercial enterprises are offered tax credits equivalent to 10% of the installation costs and the maximum incentive is $50,000 for systems excluding wind, geothermal electric and biomass systems, which have no maximum incentive. 
  • Wind, geothermal electric and biomass systems 660 kW and larger receive $0.35/kWh for 4 years in lieu of the 10%.  Excess credit is not transferable to subsequent years.
• Systems must adhere to all safety and performance regulations as described by the State Energy Program.

Renewable Energy Sales Tax Exemption (Commercial)

• Commercial and industrial enterprises that purchase renewable energy equipment are completely exempt of sales tax.  Equipment must have been purchased between July 1, 2004 and June 30, 2019 to be eligible.
• Qualified systems: solar thermal electric, geothermal electric, anaerobic digestion, PV, landfill gas, wind, biomass, hydroelectric.
• Systems must be 20 kW or greater in size to be eligible.  A renewable energy facility that is expanded by 1 MW or more is also eligible for exemption.

Renewable Energy Rebate Program (Residential/Commercial)

• Homeowners, commercial businesses, non-profits, schools and municipal buildings are offered rebates for the purchase and installation of renewable energy systems.
• Qualified systems: PV, solar water heating, wind.
• Residential applicants must install renewable energy systems on their main residential property.
      * Rebate amounts:
            o PV: $2.00/W-DC
            o Wind: $1.50/W-DC
            o Solar Water Heating: $30.00/sq ft net aperture
      * Maximum incentives:
            o Residential PV: 25% of applicable costs or $8,750 (lesser value prevails).
            o Non-Residential PV: 25% or applicable costs or $50,000 (lesser value prevails).
            o Residential Solar Water Heating: 25% of applicable costs or $2,500 (lesser value prevails).
            o Non-Residential Solar Water Heating: 25% or applicable costs or $10,000 (lesser value prevails).
            o Residential Wind: 25% or applicable costs or $5,000 (lesser value prevails).
            o Non-Residential Wind: 25% or applicable costs or $5,000 (lesser value prevails).
      * System Size Restrictions:
            o Residential PV: Systems must be between 900 W and 25 kW.
            o Non-Residential PV: Systems must be between 5 kW and 100 kW.
            o Residential Wind: Systems must be between 1 kW and 5 kW.
            o Non-Residential Wind: Systems must be between 1 kW and 5 kW.
      * Wind and PV systems must be grid-linked.  PV inverters and modules must be delineated in the Go Solar California Program.
      * Solar water heating systems must be certified by the SRCC.
      * Wind energy systems must be delineated in the Consumer Energy Center listing.

Utility-sponsored Rebate Programs (Residential/Commercial)

Participating utility companies offer rebate programs for a multitude of renewable energy and conservation energy technologies.

• The majority of these programs are geared toward energy efficient appliances and PV system installations.

Federal Tax Credit (Residential/Commercial)

Taxpayers are granted a personal tax credit of 30% of the total expenses, which include installation of residential solar-electric systems, solar thermal systems, fuel cells and labor expenses.  Residential wind energy installations and geothermal pumps are also subject to a tax exemption.

• Solar electric systems and solar thermal heaters have no maximum incentive.
• If there is excess federal tax credit, it may be carried over to the subsequent taxable year.
• Energy tax credit may continue on through consecutive years until 2016, under which unused credit may or may not be expunged.

Federal Energy Conservation Subsidy Exclusion (Residential)

• Public utilities provide residential purchasers with an exemption of 100% of energy conservation subsidies.
• The overall worth of an installation or renewable utility regardless of the energy conservation capacity, will be excluded from the buyer’s gross income.
• Customers who participate in a utility company’s energy conservation program may be given a reduced rate of electricity utilized or a nonrefundable credit of the price of electricity on the customer’s monthly electric bill.

Energy-Efficient Mortgages (Residential)

With this federal loan program, homeowners may utilize energy-efficient mortgages (EEM) to either supplement or completely fund renewable energy systems.

Example: 4KW System – Residential Installation Cost

Average Electric Bill: $250/mo

Projected Annual Bill Escalation: 5%

Cost Per Watt: $6.50

    * Estimated System Cost: $26,000
    * Federal/State Tax Credit: $6,050
    * State/Utility Rebate: $12,500
    * Net Cost: $7,450
    * Cumulative Lifetime Savings (25 Years): $36,004
    * Investment Return: 17.3%

Savings of 69% on the total cost of your solar system through incentives