Utah is known for its gorgeous national parks, unique landscapes, and ample sunshine. What many homeowners don‘t realize is that harnessing the state‘s plentiful solar resource can also save them money on their energy bills.
However, Utah lags far behind its Southwestern neighbors when it comes to solar power. Out of the nearly 3 gigawatts (GW) of solar installed across the state, over 90% comes from large-scale utility projects. Ranking 38th in the country for solar deployment, regulators have been slow to encourage rooftop solar for residents.
Without strong policy support, going solar in Utah can seem challenging. But for savvy homeowners who take advantage of federal tax credits and size their systems accurately, solar panels can still pay off.
Follow this guide to maximize savings on a solar array in the Beehive State.
Overview of Solar Incentives in Utah
Before deciding on an installation, it’s essential to understand the policy landscape for residential solar in Utah.
The state offers little in terms of direct financial incentives compared to leading solar states. Currently, the only state-level policy is a small $400 personal tax credit for going solar, expiring after 2023.
Utah also has a stripped-down version of net metering, which requires utilities to purchase excess solar generation. However, any bill credits remaining at the end of each year expire rather than rolling over.
Most importantly, Utah lacks any enforceable renewable portfolio standard (RPS). The voluntary goal of 20% renewable energy by 2025 does little to pressure utilities to interconnect more rooftop solar.
Essentially, state regulators have shown minimal interest in developing a thriving solar marketplace. For homeowners hoping to cash in on electricity savings, this means focusing first on federal tax incentives.
Maximize Federal Solar Tax Credits
The most valuable incentive for going solar anywhere in the U.S. is the federal Investment Tax Credit (ITC). Set at 30% of installation costs through 2019, it will fall year by year before phasing out entirely in 2035.
For a typical 6 kilowatt (kW) solar array in Utah costing around $16,000, the ITC saves $4,800 off the final price. That’s nearly a third of the total project cost covered through tax savings.
To qualify for the full 30%, panels and other system components must be installed and activated before December 31, 2023. Wait any longer, and you may miss out on thousands in credits.
Recommendation: To maximize ITC savings, move quickly to install solar panels on your home before the end of 2023.
Once your system is up and running, be sure to claim the ITC when filing your taxes for the year of installation. If the credit exceeds your tax liability, any remainder can roll over to subsequent tax years.
Size Your System to Benefit from Net Metering
One way Utah homeowners can squeeze additional value from their solar panels is through net metering.
This billing mechanism credits solar customers for excess power fed back to the grid, usually at the full retail electricity rate. Overproducing during sunnier months helps offset darker winter months when solar generation is lower.
But under Utah’s rules, net metering credits reset to zero at the end of each year. So while you still get paid back for surplus energy, you can’t carry a credit balance into the next year.
To prevent losing unused credits, work with your solar installer to correctly size your system to match your household‘s annual consumption. Any excess energy gets paid out, but you want to avoid major over or underproduction.
Monitoring your usage closely the first year and adjusting panel angles can help align output even further with onsite demand. This optimization ensures you bank as much bill savings from net metering as possible.
Recommendation: When installing solar in Utah, accurately match your system size to annual household electrical usage to maximize net metering bill credits.
Weigh the Economics of Solar Leasing
For homeowners who can’t afford to buy and own panels upfront, solar leasing has opened up renewable energy to millions nationwide.
Through long-term lease agreements, solar companies install and maintain systems at little to no upfront cost to the customer. The homeowner simply pays a fixed monthly rate for the system over 15-25 years, saving immediately on utility bills.
Utah does permit solar leasing, giving financially-constrained residents a zero-money-down path to installation. However, with average electricity prices of just $0.10/kWh already low in the state, the monthly lease payment may exceed projected savings.
Run the numbers carefully on any lease offer. For most Utahns, owning panels that qualify for federal tax credits will provide greater lifetime value than leasing.
Recommendation: Unless you absolutely require a zero-down installation, purchasing and owning solar panels is likely to provide better financial returns than leasing in Utah.
Solar Incentives in Utah: Key Takeaways
While Utah may never rival sunnier states like Arizona or Florida for solar adoption, the right homeowners can still benefit:
- Take full advantage of federal tax credits before they disappear completely in 2035.
- Accurately size your solar array and adjust angles to maximize net metering credits.
- Focus more on leveraging federal incentives and less on state policies for the best return.
- If going solar primarily for financial savings, buy rather than lease a system.
Utah still has a ways to go on supportive solar policies. But for residents interested in cutting energy costs while reducing their carbon footprint, rooftop solar can pay dividends with the right strategy.
