There’s no way around it: Installing solar panels is expensive. On the bright side, Utah residents can use the federal tax credit and state sales tax exemption. Here’s everything you need to know about how state and federal solar incentives can make installing panels more affordable in the Beehive State.
NOTE: President Trump’s “One Big Beautiful Bill,” signed in July of 2025, phases out the federal solar tax credit. You now only have until Dec. 31, 2025, to install a system and get the 30% solar tax credit. Compare top solar companies now.
In Utah, a typical residential solar panel system costs $9,355 to $30,200, depending on the size of your system and what financial incentives you qualify for.
Jump to insightThe 30% federal solar investment tax credit (ITC) is the most significant financial incentive for most homeowners buying solar panels in Utah. Leasing or entering a power purchase agreement (PPA) is often cheaper upfront, but you won’t be eligible for the ITC.
Jump to insightNet billing lets residents with solar panels earn credits for excess electricity they generate and send to the grid. However, any unused credits at the end of the annual billing cycle are granted to the utility company without compensation to the homeowner.
Jump to insightResidential solar panel incentives in Utah
The federal solar investment tax credit (ITC) is the best way to save money when going solar in Utah. It reduces your federal tax liability by 30% of how much it costs to install solar panels. This is different from a deduction, which lowers your taxable income. ITC is a credit, meaning it directly decreases the amount of taxes you owe.
For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If in the year your system becomes operational you owe $15,000 in taxes, the ITC reduces what you owe to $12,000.
Tax credits offset your tax liability, so it’s only useful if you owe federal income taxes in the first place. However, the credit rolls over to the next tax year if you don’t use the full amount. You don’t get these benefits automatically, though. You must claim your solar equipment, labor and permits on your federal taxes for the same year you started using your system on Form 5695.
Another important thing to note: Your solar panels have to be operational before you can claim the ITC, as Jennifer in Salt Lake City, Utah, found out. Residents may also take advantage of a sales tax exemption or a community solar program:
- Alternative energy sales tax exemption: Utah exempts the purchase or lease of equipment used to generate electricity from alternative resources — like solar panels — from the state sales tax. This exemption waives sales tax on the purchase and installation of eligible renewable energy systems like solar panels. Eligible purchases or leases must be made for or by an alternative energy production facility on or after July 1, 2004, and before June 30, 2027. All lease agreements must be made for at least seven years.
- Summit Community Power Works Solar: This community-led program is available to residents in Summit and Wasatch Counties in Utah. SCPW Solar allows people to join together and benefit from bulk-purchase discounts on solar installations. This makes going solar more affordable and accessible for Utah homeowners. SCPW Solar aims to simplify the process and promote clean energy adoption in the community.
Federal solar tax credit expires at the end of 2025
The ITC is now set to expire at the end of the year, much earlier than previously scheduled. The credit was expected to drop gradually, then fully expire in 2035 — but those future step-downs have been eliminated under the “One Big Beautiful Bill,” signed in July of 2025. This means you have until Dec. 31, 2025, to install and pay for a system to qualify for the 30% credit.
Additional solar incentives in Utah
Check the DSIRE for the most comprehensive source of information about solar incentives and policies in Utah.
| Incentive type | Amount | Eligible solar equipment | Applicable sectors | Administrator | |
|---|---|---|---|---|---|
| C-PACE financing | Commercial loan | Varies | Solar panels, solar thermal electric, solar water heat | Multifamily residential, agricultural, industrial, commercial | Sustainable Real Estate Solutions, Inc. (SRS) |
| Industrial facilities and development bonds | Bond program | Varies | Solar panels, solar water heat, solar thermal electric | Commercial, industrial, institutional | Local level |
| Renewable energy systems tax credit | Corporate tax credit | 10% of the eligible installed cost up to $50,000 | Solar panels, solar passive, solar water heat, solar thermal process heat, solar space heat, solar thermal electric | Commercial, multifamily residential | State Energy Program, State Tax Commission |
| Alternative energy development incentive | Fixed post-performance credit credit (personal & corporate options) | 75% of new state tax revenues over the life of the project or 20 years, whichever is less | Solar panels, solar thermal electric | Commercial, industrial | Utah Governor's Office of Energy Development |
What to know about net metering in Utah
Net metering lets homeowners with solar panels sell any excess electricity they generate to their local power grid. Utah has a net billing system, which similarly compensates residents for sending any excess solar power to the grid.
Net billing allows those with installed solar panels to receive a credit for excess electricity they generate and send back to the grid. This credit is applied to their electric bill, which offsets energy costs. Your utility company determines the specific credit rate, which is often based on a lower, avoided-cost rate.
Check with your utility for the latest net billing rates.
At the end of your annual billing cycle, any unused credits from net billing are granted to the utility company without compensation to the homeowner. These unused credits go toward low-income assistance programs.
Utah has an export credit rate that determines how much credit homeowners with solar panels receive for excess electricity sent back to the grid. This rate applies to new solar customers enrolled in the net billing service and varies seasonally.
As of publishing, the 2024 summer (June to September) export credit rate is 5.160 cents per kilowatt-hour (kWh), and the winter rate (October to May) is 4.462 cents per kWh. The export credit rate is lower than the standard retail electricity rate you pay for power from the grid.
How much are solar panels in Utah?
After the federal solar tax credit, solar panel costs in Utah typically range from $9,355 to $18,709. Your system size greatly affects how much you pay overall. The typical system size for solar systems in Utah is 5.8 kW (kilowatts).
How do you know if the average size system is enough for your home or if you need a bigger one? Check the amount of electricity you used last year in kWh. You’ll find this information in your electricity account dashboard online. Then divide your annual kWh by 1,200 to find the system size you need. For example, if your home used 15,000 kWh last year, you would need a 13-kW system.
Average solar cost by system size in Utah
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Before federal tax credit | $15,100 | $18,120 | $21,140 | $24,160 | $27,180 | $30,200 |
| After federal tax credit | $9,355 | $11,225 | $13,096 | $14,967 | $16,839 | $18,709 |
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 solar to the grid and export credit rates
» GUIDE: Solar panel installation
Find solar companies in Utah
A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Utah’s top solar companies to learn more.
| Company | Customer rating | Pro install | Payment options | Year founded | |
|---|---|---|---|---|---|
 Blue Raven Solar | Get Started | 3.5 |  | Cash, loan, lease, PPA | 2014 |
 Project Solar | Learn More | 4.3 | | Cash, loan | 2016 |
 ShopSolar | Learn More | 4.7 |  | Cash, loan | 2018 |
 Tesla Energy | Learn More | 2.2 | | Cash, loan and lease | 2015 |
FAQ
Can I get free solar panels in Utah?
No, but you can lease solar equipment or enter a power purchase agreement (PPA) with little to no upfront costs. Still, neither is totally free. Solar leases generally require a flat monthly fee; PPAs make you pay per unit of electricity.
» FREE SOLAR PANELS: Are they really free?
How can I pay for solar panels?
You can pay cash, but most people finance solar panels with a solar loan. It works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest). You also have the option of getting a lease or power purchase agreement.
» SOLAR PANELS: Lease vs. buy
How much can I save with solar panels in Utah?
On average, Utah homeowners with solar panels avoid $31,768 in utility costs over 25 years. Your current electric bill is the starting point for assessing the financial benefits of transitioning to solar energy. Knowing your average energy consumption helps determine the size and capacity of the solar system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself.
How do I know if my house is a good candidate for solar?
It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.
The condition of your roof matters, too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels. This will cost around $5,000 for a 19-panel setup.
Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.
Is my HOA allowed to restrict solar panels?
In Utah, homeowners associations (HOAs) can no longer completely ban solar panels. A relatively new law says HOAs must allow residents to install solar panels on their property. But HOAs can still put some limits in place. They can have rules about where panels can go or how they should look. These rules cannot block solar totally — just restrict it.
Each HOA may have different requirements for solar panels in their neighborhood. Check your HOA agreement for specific guidelines for your community. Talk to a lawyer or expert if your HOA seems too restrictive on solar. They can advise if the limits follow the new law. The goal is to allow solar but give HOAs some say in placement and appearance.
What has Utah’s investment in solar been so far?
Total solar investments in the state amount to $4.3 billion, according to the Solar Energy Industries Association.
Bottom line
Utah doesn’t have as many solar incentives as other states, but there are a few you can take advantage of. The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar and incentives in other states. Turns out, it’s worth it for many homeowners, particularly in Utah.
Solar costs vs. savings: Utah and nearby states
| 6-kW system cost (before incentives) | 10-kW system cost (before incentives) | Typical system size needed* | Average cost per watt | Total utility power cost savings** | |
|---|---|---|---|---|---|
| Arizona | $12,823 | $21,372 | 7 kW | $2.14 | $42,844 |
| Colorado | $16,729 | $27,882 | 4.9 kW | $2.79 | $31,582 |
| Idaho | $16,992 | $28,320 | 6.3 kW | $2.83 | $7,664 |
| Nevada | $14,049 | $23,414 | 7.2 kW | $2.34 | $36,225 |
| New Mexico | $16,898 | $28,164 | 5.2 kW | $2.82 | $22,365 |
| Utah | $18,120 | $30,200 | 5.8 kW | $3.02 | $31,768 |
| Wyoming | $19,942 | $33,238 | 6.9 kW | $3.27 | $46,147 |
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:- DSIRE, "Utah Solar Programs." Accessed March 29, 2024.
- EnergySage, “The cost of solar panels in Utah.” Accessed March 29, 2024.
- Solar Energy Industries Association, "Utah Solar." Accessed March 29, 2024.
- SolarReviews, “How much do solar panels cost in Utah?” Accessed March 29, 2024.
- Utah Office of Energy Development, “Renewable Energy Systems Tax Credit (RESTC).” Accessed April 29, 2024.
- DSIRE, “Renewable Energy Systems Tax Credit (Personal).” Accessed April 29, 2024.
- Utah Energy Hub, “SCPW Solar – Utah Energy Hub.” Accessed April 29, 2024.
- Utah Office of Energy Development, “Alternative Energy Development Incentive (AEDI).” Accessed April 29, 2024.
- Utah Office of Administrative Rules, “Rule 312: Electrical Interconnection.” Accessed June 4, 2024.
- Utah State Legislature, “Solar Access.” Accessed Oct. 6, 2023.
