Tax Exempt Organizations

Federal Tax Credits for Solar and Storage

Tax exempt organizations are now eligible for “Elective Pay” of the federal tax credits. This allows qualifying tax-exempt entities to receive a direct payment from the Internal Revenue Service (IRS), in lieu of a tax credit. The process for Elective Pay is still being worked through but current details about Elective Pay are available here.  This option provides significant cost saving opportunities for tax exempt entities installing solar (+ storage).

  • Solar power projects under 1 MW: The Federal Tax Credit for Businesses covers up to 30% of the purchase and installation costs for a solar project.
  •  Energy Community Bonus: Will cover an additional 10% of cost. The energy community bonus is detailed here and is based on the location of the business or tax exempt entity. Many areas of Utah may be eligible for the energy community bonus. See the below mapping tool for accurate information about your eligibility. 
  • Low Income Bonus: For entities located in low-income areas, this bonus will cover up to an additional 10% of the cost of a solar installation. It has a yearly cap of 1.8 TW capacity. Because of this, there is an annual application cycle for an allocation for the low-income bonus tax credit. An allocation must be received before a system is put in service, and a signed contract for the solar system is necessary before applying for the allocation.
    • Multi-Family Housing: Within the low income bonus, there are provisions for multi-family housing units or low-income benefit projects which will provide a bonus of up to 20%. 

Additional Tax Credit Opportunities

The domestic content bonus:  has to do with materials and construction being sourced in the United States. A solar installer should know whether the materials for your project are eligible. This is not an additional 10% credit off the total cost of the project but rather an additional 10% of the tax credit eligibility of the project. (For example, if a business is eligible for the base credit of 30% and the energy community bonus of 10%, then the credit is 40%. If they also meet domestic content requirements, this will provide an additional 10% of 40% for a total of 44%. Learn more here.

State Tax Credit: Utah does not offer a tax credit for solar

Utility Incentives/Rebates for Solar and Storage

Battery Storage: Rocky Mountain Power has a battery rebate incentive program called Rocky Mountain Power Wattsmart Battery Program. This program provides a rebate per kW of battery capacity and an ongoing annual credit. 

Blue Sky Grant: Currently, there are no utility incentives for solar installations. However, Rocky Mountain Power provides grants for community energy projects through its Blue Sky Program. This funding helps cover the capital costs of installing rooftop solar for non-residential, community-serving sites within Rocky Mountain Power’s service area.

The recently approved Inflation Reduction Act has made some information on this website outdated. We are working to update ASAP. In the meantime, please consult a tax expert on all incentives and rebates listed.