Utah Solar Tax Credit: What’s New in 2018
Tax credits for the last several years have made solar a more affordable option. This trend will continue despite changes in the recent 201 trade case.
Tax credits have been the means for many Utahan’s access to renewable energy. Combined, state and federal tax credits cover over 30 percent of residential solar.
2017, however, has been a year of upheaval for solar in Utah. The two main bumps on this path were net metering and federal panel tariffs. These, however, will not prove fatal for the future of solar.
Rocky Mountain Power’s Transitional Plan for Net Metering
On November 9th a pivotal moment in Utah history occurred. The solar industry was able to make a compromise with Rocky Mountain Power. In this settlement, the demise of Utah’s thriving solar industry turned into a mere road bump.
This is sensational news considering the damage that might have otherwise occurred. Berkshire Hathaway Energy, the holding company of Rocky Mountain Power, made a similar move in Nevada. Their metering changes for a time reeled the senses of its solar industry.
Thankfully, Utah is learning from history instead of repeating it. As part of the compromise, Utah residents that would like to get solar will be a part of a transitional program.
In this program, 90 percent of excess solar generation will get credited to the customer’s power bill. Every fifteen minutes the amount of energy that is being pulled and put onto the grid will get recorded.
How This Change Affects Solar Customers
This new metering of energy use will allow the utility to charge extra at times of more frequent use. To get the most out of solar you can do your high consumption activities during the day. This will allow you to avoid paying extra for your power.
The good news is that 100 percent of the energy you produce and use is still free assuming your array is paid off. And if it isn’t paid off you can count on the payment not changing. This means that you will still see a large return, and Utah solar companies will still thrive without net metering.
Utah Solar Tax Credit Expiration Changes
Utah has a state tax credit for solar. As of 2017, this tax credit was for $2,000 toward any residential solar panel array. After a system gets purchased, this amount is credited to taxes owed and deducted from the solar costs.
This credit was set to decrease by $400 each year. However, as part of the Rocky Mountain Power settlement, a change in the expiration date has been proposed.
Although the tax credit has decreased to $1,600 for the year 2018, the settlement proposed that it not change while in the transitional period. This means that there wouldn’t be a change in this tax credit until 2020.
201 Trade Case: Final Decision
After not being able to keep up with the competition, a couple of American solar companies relying on domestic manufacturing processes filed a complaint with the International Trade Commission (ITC). In this complaint, it was suggested that a tariff be placed on imported solar panels.
Subsequent to the ITC’s debate on the issue, the International Trade Commission validated the complaint. It was then presented to the President for approval. President Trump has recently made a decision on this proposed tax.
There is now a four-year plan in place that will impose a tariff on imported solar panels. This tax is meant to allow solar companies that couldn’t compete for a better chance to regain their footing.
This means that the initial cost for solar as a whole in the United States is going to increase. Customers who choose to do business with companies who have not leveraged themselves to death have nothing to worry about.
The first year there will be a 30 percent tariff, and then for the next three years, it will decrease by 5 percent. this tariff will then disappear.
The other good news is that the first 2.5 gigawatts (GW) of each year will not have a tariff. Competition for the first 2.5 gigawatts sold in the year could potentially help stabilize prices, but only time will tell.
The Economic Impact of Trump’s Solar News
Increased solar panel cost doesn’t mean that solar is ending. Although it’s a bit of a setback, there will still be continued development and growth in the solar industry.
In fact, this could mean that American solar production and development will increase. With the production of modules in the United States, jobs would continue to open up for Americans.
Go with a Company that Has Stocked Up – It’ll Save You Money
Smart American solar companies have stocked up on their particular solar panel brands in the months leading up to this decision. Consequently, the wide range of solar companies will thin out. Only the ones who’ve handled their money wisely will remain for the long haul.
Those that didn’t have the financial backing to invest in their products will get weeded out. This is an advantage for the customer because they will be able to have more confidence in solar moving forward.
Companies that have taken the necessary precautions will not get hit as hard as those that didn’t. As a result, their prices will stay the same for a longer duration of time. It isn’t too late for individuals interested in getting solar to invest in their own solar arrays.
Utah Utility Solar Vs. Residential Solar Impact
It’s estimated that utility-scale solar projects will be affected the most. This is because decreased panel costs are the primary motive behind large projects.
This, however, doesn’t mean that the solar industry will halt all installations. Although progress will get halted solar projects will continue.
In fact, residential installs will be the least affected. This is because modules represent a smaller portion of the overall solar costs.
Another reason why solar will continue to thrive is incentives that are still in place. Many states have specific renewable energy goals promoted through different government-enforced incentives.
Utah Solar Panel Incentives
These changes have made Utah’s State and Federal tax credits even more valuable to potential customers. These government incentives make it so that solar is still an affordable option.
The federal solar tax credit covers up to 30 percent of your solar installation. And then on top of that, the state tax credit covers another $1,600. Together these incentives decrease solar costs which make it a viable option.
Where Utah Solar will Go from Here
Within the past couple of months, there has been a whirlwind of changes. As a result, we have seen that these changes will not stomp out the best solar power companies in Utah.
Don’t be afraid to take a step in the right direction. Solar will win the fight for worldwide renewable energy, regardless of the challenges that competition puts before it.
Fear of the future is inevitable, but the courage to embrace opportunities will secure it. Be among the brave pioneers of renewable energy and see your savings as you take advantage of the federal and states incentives available today.