Utah solar 101: must read before you buy solar panels

The Solar Investment Tax Credit (ITC) allows homeowners to claim 26% of the cost of their solar power system installed until 2022 as an income tax deduction. For example, if your solar system costs $20,000, you are eligible for $5,200 (26% of the total gross cost) in tax credit. Solar system cost comprises not only the money spent on solar panels, but also freight shipping costs, professional installer fees, tools bought or rented and so on. To claim the ITC, complete all the necessary forms and submit them when filing your taxes.

This program allows you to claim 25% of the total costs of a PV system, including the installation. It is compatible with all other credits and incentives. The sooner you participate, the better: the maximum amount of the credit is decreasing by $400 every year to reach $0 on January 1, 2024. You can apply online to participate in the program. A $15 non-refundable application fee will be charged to your credit card.

In Utah all investor-owned utilities and cooperatives serving more than 1,000 customers are required by law to offer net metering. Net Metering allows residential solar owners to put the excess electricity onto the utility grid instead of storing it with batteries.

The state of Utah uses an approach called Net Billing – its main difference lies in different rates that are applied to the energy you buy and the energy you sell. Usually, the utility pays a bit less for your energy then they charge for theirs. When you sell your solar power to the grid, you receive credits that can be used to offset your next bill. The value of the credits is determined by the utility company. All unused credits expire once a year.

• Rocky Mountain Power is Utah’s largest utility, providing services to 80% of the customers. The company uses slightly different summer and winter rates: it will pay 5.817¢ per kWh from June to September and 5.487¢ between October and May. Rocky Mountain power also charges a non-refundable application fee of $60.
• Provo Power is a municipal utility that offers its customers 6.742¢ per every kWh of energy their solar arrays produce.

Renewable Energy Credits are certificates granted to any person or entity upon generation of each MWh of clean electricity. Unlike with Net Metering, you don’t need to sell any electricity to get credits. The value of RECs is always changing, which makes them similar to stock market assets. Based on the available data, selling RECs could mean anywhere from $300 to $1,000 annually for a 10 kW solar system. To participate, first you may want to contact the Utah Public Service Commission for relevant details. After that, you can create a REC account with the Western Renewable Energy Generation Information System (WREGIS) to begin storing and selling your credits.

A solar easement contract is a written agreement between you and another party, for example, your neighbor. This type of contract helps to ensure that your PV system will always have adequate sun exposure, protecting you from potential obstacles on neighbouring plots. It is voluntary, but can not be cancelled unless a specific clause is included in the document. Once signed, it is tied to the land, not the owner. To have legal power, it must be duly recorded and indexed.

Thanks to Utah’s Solar Access Law it is legal to install solar panels on your house. The state protects its residents from excessively restrictive homeowners associations (HOAs). Any limitations they impose may not decrease the efficiency or increase the price of a PV system by more than 5%. If the rules of a given association were created before January 2017, it is exempt from this legislation. However, Utah Code grants land-use authorities the right to refuse renewal of HOAs if they prohibit solar panels without good reasons. An association has a right to require that solar panels not extend above the roofline, and that the module frame, together with visible piping and wiring, be similar to the roofing material in color or texture.

Something you should remember:

• The state doesn’t allow HOAs to restrict installation of a solar system in Utah, unless their rules were created before January 2017.
• Any requirements included in the HOA’s rules or declaration may not increase the price or decrease the efficiency of a PV system by more than 5%.
• Restrictions may be implemented if your equipment doesn’t meet safety, health, building or performance standards. 
• In Utah, installation can only be performed by licensed contractors.
• Any requirements forcing you to hide the system from view will generally violate the law, except for ground-mounted systems.

According to a report by Verisk, Utah is one of the states with the highest risk of wildfires. These natural disasters go hand in hand with strong gusts of wind and power outages. Solar panels are able to go through it as they can withstand even hurricanes, and they certainly come in handy in case of a blackout. In 2020, for instance, strong wind knocked down power lines, leaving more than 170,000 buildings without electricity. According to the Environmental Protection Agency, extreme weather events occur more often and gain in intensity – yet one more reason to consider going solar.