Utah Solar Tax Credit

Installing solar panels in Utah can help you save quite a bit on your electricity bills. And to save even more money, take advantage of the best solar incentive – Investment Tax Credit. Here is a quick guide on how to claim Solar Tax Credit in Utah.

What is the Solar Tax Credit?

The Solar Investment Tax Credit (ITC) enables businesses and homeowners to claim a tax credit equivalent to 30% of the total cost of a solar panel system. Unlike a rebate, the ITC directly lowers the amount of income tax owed.

This tax credit is applicable to those who install solar panels before December 31, 2034, with a gradual reduction to 26% in 2033 and further to 22% at the beginning of 2034.

How does the Utah Solar Tax Credit work in practice?

In practical terms, if a household installs a $20,000 solar panel system, they can subtract $6,000 from their income taxes. This results in a net cost of $14,000 for the photovoltaic (PV) system. Any remaining credit can be carried over to subsequent years, ensuring you realize the full 30% benefit promised by this solar incentive.

To qualify for the ITC, ownership of the solar energy system is essential, as leased systems do not qualify. The system must be installed in the United States and should be new or used for the first time. If installing a PV system on a boat or RV, consider designating it as a second home.

How do I get a solar tax credit in Utah?

Claiming the Solar Tax Credit involves documenting expenses related to the solar energy system installation, including invoices, receipts, and other proof of qualified expenditures. Although these documents are not submitted initially, they may be necessary in case of an audit.

April 15

most common National Tax Day date

Homeowners can claim the Solar Tax Credit by completing IRS Form 5695 and attaching it to their federal income tax return. Ensure the inclusion of residential energy credit information on Schedule 3 (Form 1040) and file the tax return by the applicable deadline.

Need help? Follow our guide!

We cover filling out the forms for claiming ITC step by step

Step-by-step guide

Benefits of the Utah Solar Tax Credit

The Utah Solar Tax Credit covers not only the cost of solar panels but also includes all associated equipment, shipping, and labor expenses. There is no cap on the amount that can be claimed back.

In addition to the federal solar tax credit, Utah offers its own state-level incentives and rebates for solar installations, further reducing the upfront costs. For more information, refer to our guide on Utah solar incentives.

Years of experience in translation and a love of nature help Julia find the right words to encourage going solar. She joined the team in 2023 and is happy to make her contribution to a greener future.

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