State Incentives

Utah State Renewable Energy Systems Tax Credit

In 2007, the Utah Legislature revised the State’s Renewable Energy Systems Tax Credit to allow credits for additional technologies, to clarify the State Energy Program’s rulemaking authority, and to create a new production tax credit for large wind, biomass, and geothermal systems that produce electricity. Because of this revision, different rules apply for systems installed before and after January 1, 2007.

Please be advised, you must first apply for this tax credit through the Utah State Energy Program before claiming the Renewable Energy Systems Tax Credit on your Utah state taxes.

Investment Credits: Systems Installed in 2007 or Later

Click here to download application forms and instructions.

Click here to view the latest Renewable Energy Systems Tax Credit rules.

Click here to view a current qualification guide.

Utah offers a state income tax credit for renewable energy systems. The investment tax credit for residential systems is 25 percent of the equipment and installation cost up to a maximum of $2,000.

Commercial systems receive a 10 percent investment tax credit up to a maximum of $50,000. Commercial systems that use wind, biomass, or geothermal energy and have a production capacity greater than 600 kilowatts are not eligible for an investment tax credit but are eligible for a production tax credit of 0.35 cents per kilowatt hour of electricity produced.

The technologies included are: solar electric, solar thermal, passive solar, wind, hydropower, ground source heat pumps, water source heat pumps, direct use geothermal, geothermal for electricity, and biomass. The new tax credits enacted in 2007 do not expire.

Click here to view the individual income tax law for commercial and residential systems, Utah Code 59-10-1106.

Click here to view the corporate income tax law, Utah Code 59-7-614.

Investment Credits: Systems Installed Before January 1, 2007

Production Tax Credits

Net Metering

Utah requires all investor-owned electric utilities and most cooperatives in Utah (municipal utilities are excluded) to allow customers to connect renewable energy systems to the grid for their own use and to supply excess electricity to the electric grid.

The utility will "net" the customer's electricity use and production over the monthly billing period, in essence, paying the customer retail price for the electricity they produce. If net metering results in excess customer-generated electricity over the billing period, the utility will credit the customer for the electricity at the avoided cost rate – i.e., the cost the utility would otherwise incur to generate power if it did not purchase electricity from another source.

The customer may use the credit to offset purchases of electricity during future billing periods in the same energy year  (April 1 – March 31). Any unused credits expire at the end of the energy year.

Customer-generated electricity may be from solar, wind, small hydropower, or fuel cell systems of up to 25 kW in size. The net metering law caps total participation in the program at 0.1 percent of the cumulative generating capacity of the utility's peak demand during 2007.

Utilities are prohibited from imposing additional charges or fees on customers with net metering unless authorized by the Utah Tax Commission.

Net Metering Programs in Utah

• Rocky Mountain Power
• Murray City Power
• St. George Energy Services Department
• Washington City

Renewable Energy Sales and Use Tax Exemption (20kW or greater).

State sales tax exemptions for the purchase or lease of equipment used to generate electricity by a renewable energy production facility.
Click here for more information.

Federal Incentives

Business Energy Tax Credit

Corporate tax credits for solar energy, fuel cells, microturbines, small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems.
Click here for more information. (outside link)

Renewable Energy Production Tax Credit

Tax credit for electricity generated by wind, closed-loop biomass, and geothermal resources, open-loop biomass, landfill gas, municipal solid waste, qualified hydroelectric, and marine and hydrokinetic systems.
Click here for more information. (outside link)

USDA Rural Energy for America Program (REAP) Grants

For energy efficiency and renewable energy projects by agricultural producers and small businesses in rural areas.
Click here for more information.

Residential Renewable Energy Tax Credit

Tax credit for residential solar-electric systems, solar-water heating systems, fuel cells, small wind-energy systems and geothermal heat pumps.
Click here for more information. (outside link)

Additional Links

StEPP Foundation

The StEPP Foundation is a national, non-profit organization that helps match energy efficiency, clean energy, and pollution-prevention projects with funding sources. For more information, visit the StEPP Foundation Web site: http://www.steppfoundation.org/default.htm.

Database of State Incentives for Renewable Energy (DSIRE)