Solar incentives and tax credits can help reduce the cost of installing solar for commercial energy users. Please be sure to consult with a tax expert and review all the guidelines and rules carefully.
Federal Investment Tax Credit for Renewable Energy (ITC)
This tax credit covers up to 30% of the upfront cost of a rooftop solar system. Businesses are eligible to roll the tax credit back 3 years or forward 22 years if they do not have enough tax liability to cover the cost of the solar (+ storage) system in the year it was installed. State of Utah tax credits do not currently have carryover provisions. The federal tax credits cover solar panels, battery storage, and relevant system components, including permitting and labor. Roof repairs are not eligible for these tax credits.
Energy Community Bonus: If eligible, can cover an additional 10% of cost. The energy community bonus is detailed here and is based on the location of the business. 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%.
State Tax Credit
The State of Utah offers a tax credit for up to 10% of the upfront cost to install rooftop solar. This tax credit is capped at $50,000.
Utility Incentives/Rebates
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 Program: 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.
Salt Lake City Economic Development Funds
Salt Lake City’s Economic Development Loan Fund (EDLF) provides small business loans for terms of 6 months to 7 years. The first 12 months of these loans can be interest- and payment-free – essentially the loan payments don’t begin until 12 months after dispersal of funds. This can provide upfront costs of a solar installation while waiting for tax credits or direct payments. Other communities may also have economic development loan funds which could provide benefits to organizations installing solar.