Solar incentives in Utah

The federal solar investment tax credit (ITC) is the most significant factor in reducing the cost of solar panels in Utah. If you install a residential system by the end of 2032, you get a tax credit of 30% of the total cost on your federal taxes. That includes equipment, labor and permits.

The ITC drops to 26% in 2033 and 22% in 2034.

For example, a system averages $21,440 in Utah. With the ITC, you would get a tax credit of $6,432. The credit is not an instant rebate, however. You must fill out Form 5695 when filing your federal income taxes for the year you install your solar system. If your tax liability is less than the amount of your credit, the excess rolls over into the next tax year.

Another important thing to note: Your solar panels have to be operational before you can claim the ITC, as Jennifer in Salt Lake City found out.

Statewide residential solar incentives in Utah

Utah doesn’t offer as many solar incentives as other states, but there are a few that you can take advantage of. Residents can get a 25% state tax credit on the cost of installing a solar system, but there's a cap of $400 for every year you apply for the credit.

» MUST-KNOW: The tax benefits of owning a home: must-know deductions and secrets

Dominion Energy customers can also get a rebate on solar water heaters and solar pool heaters. The incentive varies depending on what type of heater you buy, but you could rack up several hundred dollars in rebates.

What to know about net metering in Utah

Net metering is when you send excess electricity created by your solar panels to the grid and get compensated. Utah no longer has net metering laws to govern policies, so power companies have different guidelines.

For example, Rocky Mountain Power offers net metering to its customers in Utah, Idaho and Wyoming. To qualify, your system must be no more than 25 kilowatts (kW), and you can expect to receive around 6 cents per kilowatt-hour (kWh).

In 2023, the Utah Supreme Court said Utah's primary utility company, Rocky Mountain Power, is allowed to let leftover credits expire each year. So, customers lose any credits they don't use by Dec. 31.

The court also said utility companies can change the rate paid for solar power fed into the grid annually, which means the amount customers get as a credit can go up or down year to year based on what the utility decides.

Advocates argued these changes discourage people from installing rooftop solar. The court sided with the utility, however, deciding the ruling prevents customers without solar from having to subsidize those who do go solar.

An alternative to net metering is to store excess energy in a battery. That way, you keep your excess power to use when your panels aren’t generating enough for your needs and don’t have to worry about selling and buying it from the grid.

» GREENEST STATES: Utah ranks No. 37

Solar resources in Utah

Below are additional resources that can guide you through transitioning to solar in Utah.

• Solar incentives for Utah homes
• Utah rooftop solar rates explained
• Dominion Energy ThermWise appliance rebates 
• Connecting your solar to the grid and export credit rates

» GUIDE: Solar panel installation

Find solar companies in Utah

Compare popular solar companies available in Utah below. Read our guide to finding the best solar companies for more.

Bottom line: How much are solar panels in Utah?

While Utah only offers two state incentives to residents going solar, investing in solar panels isn’t a bad idea. You can save thousands of dollars over the years, and the ITC can hack 30% of the system’s cost off of your federal taxes.

The ConsumerAffairs Research Team conducted an in-depth analysis to determine how much it costs to go solar in Utah and the average solar costs in other states. After the federal investment tax credit (ITC), the average system is $15,008 in Utah, which is still cheaper than in many other states despite the lack of state incentives. The national average is $16,715.

Solar costs: Utah vs. nearby states