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Renewable Energy: Incentives
- Renewable Energy Rebate Program (Program Ended)
In 2007, the Utah Legislature revised the State's Renewable Energy Systems Tax Credit to allow credits for additional technologies, to clarify the Office of Energy Development'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 Office of Energy Development before claiming the Renewable Energy Systems Tax Credit on your Utah state taxes.
Investment Credits: Systems Installed in 2007 or Later
- Application Forms and Instructions
- Current Qualification Guide
- Renewable Energy Systems Tax Credit Rules
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.
- Corporate Income Tax Law, Utah Code 59-7-614.
- Individual Income Tax Law for Commercial and Residential Systems, Utah Code 59-10-1106
- Investment Credits: Systems Installed Before January 1, 2007
- Production Tax Credits
On March 15, 2002, Governor Leavitt signed into law House Bill 7, Net Metering of Electricity. This law requires all investor-owned and cooperative electric utilities in Utah (municipal utilities are excluded) to allow customers to connect renewable energy systems to the grid and their accounts be credited when excess electricity is generated.
Investor-Owned Utility Net Metering Requirements (Rocky Mountain Power)
- Residential Customers
On February 12, 2009 the Public Service Commission changed the net metering requirements for investor-owned utilities. The new standards state that the utility will "net" the customer’s electricity use and production over the monthly billing period. In essence, crediting the residential customer the retail price for the electricity they produce. If net metering results in excess customer-generated electricity over the billing period, the investor-owned utility will credit the customer for the electricity on a kilowatt-hour basis.
- Large Commercial and Industrial Customers
Customers with demand charges that generate excess generation will be given a choice between valuing excess generation at an avoided-cost-based rate or at an alternative rate by dividing Rocky Mountain Power’s Utah revenue per schedule by the schedule’s corresponding kilowatt-hour usage data from the previous year’s FERC Form No. 1.
- Credit Details
Both residential and large commercial or industrial customers 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, co-generation or fuel cell systems of up to 25 kW in size for residential systems, and 2MW for commercial systems.
The net metering law caps total participation in the program at 20 percent of the cumulative generating capacity of the utility's peak demand during 2007. Investor-owned utilities are prohibited from imposing additional charges or fees on customers with net metering unless authorized by the Public Service Commission.
If the net-metering customer is serviced by an investor-owned utility, all renewable energy credits (RECs) that are generated are owned by the customer or as otherwise designated by the customer.
Cooperative utilities such as Garkane Energy are required to allow net metering on their service territory, but are not regulated by the public service commission.
- City of St. George
- Heber City—Heber Light and Power
- Interstate Renewable Energy Council: Connecting to the Grid
- Murray City Power
- Rocky Mountain Power
- 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.
- 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.
- 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.
- 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.
- USDA Rural Energy for America Program (REAP) Grants
For energy efficiency and renewable energy projects by agricultural producers and small businesses in rural areas.
- Database of State Incentives for Renewable Energy (DSIRE)
The Database of State Incentives for Renewable Energy (DSIRE) is a comprehensive source of information on state, local, utility, and selected federal incentives that promote renewable energy.
- 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.