One might think recent changes in the Utah solar tax credit could be influenced by changing solar prices and legislation.
The good news is that tax credits for the last several years have made solar a more affordable option, and 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. Together the state and federal tax credits cover just over 30 percent of a residential solar array.
2017, however, has been a year of upheaval as road bumps on the way to solar success have occurred.
The two main bumps on this path were uncertainty with net metering and possible panel tariffs, but these will not prove fatal in the future of solar.
Rocky Mountain Power’s Transitional Plan on 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. Warren Buffet, the CEO of Berkshire Hathaway Energy, the holding company of Rocky Mountain Power, made a similar move in Nevada, which for a period of time, reeled the senses of its solar industry.
During this three-year trial, Utah residents that would like to get solar will be a part of the transitional program instead of net metering. In this program, 90 percent of the extra energy put onto the grid will be credited to the customer on their power bill.
This extra energy will be given back to the customer at the end of each month as a credit on their billing statement. Every fifteen minutes, Rocky Mountain Power will take a snapshot of the amount of energy that is being pulled and put onto the grid by each resident’s home.
This more frequent accounting of energy use means that time of energy use will need to change. customers that want to get the most out of their system will need to do their high consumption activities during the day.
Although this may feel like a step back for Utah’s solar industry, there is a silver lining: 100 percent of the energy that is produced and used by the solar customer is still free assuming loans are paid off on the solar array.
This means that you will still see a large return on investment, 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 the system is purchased, this amount is credited to taxes owed and deducted from the solar costs.
This credit was set to decrease by $400 each year until it disappeared. Because of Rocky Mountain Power’s transitional program, a change in the Utah solar tax credit expiration date has resulted.
Although the tax credit has decreased to $1,600 for 2018, the settlement proposed that this tax is fixed at this amount while in the transitional period. This means that there will not 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, the companies suggested that a tariff should be placed on imported solar panels, as they had caused “injury” to competitors in the domestic market.
Subsequent to the ITC’s debate on the issue, the International Trade Commission validated the complaint, which 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 could not compete before 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, but not for customers who choose to do business with companies who have not leveraged themselves to death, including Go Solar Group. The first year there will be a 30 percent tariff, and this will gradually decrease to 15 percent in each consecutive year.
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 according to Forbes, 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 as a result. With the production of modules in the United States, jobs would continue to open up for Americans within the solar industry.
Go with a Company that Has Stocked Up – It’ll Save You Money
Smart American solar companies who rely on imported solar cells to meet consumer demand have already stocked up on their particular solar panel brands in the months leading up to this decision. Consequently, the wide range of solar companies will be thinned, and 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 be weeded out. This is an advantage for the customer because they will be able to have more confidence moving forward that the company they are working with is reliable.
Companies that have taken the necessary precautions will not be hit nearly as hard as those that didn’t, and so their prices will stay relatively the same for a longer duration of time.
This means that it isn’t too late for individuals that are interested in getting solar to invest in their own solar arrays.
Utah Utility Solar Vs. Residential Solar Impact
It has been estimated that utility-scale solar projects are going to be most affected by this new tariff. This is because the decreased cost of panels was the primary reason why these projects were pursued.
Reduced costs are still a large reason for all solar development. Residential installs will, however, be the least affected. This is because modules themselves represent a smaller portion of their overall costs.
State and federal incentives are also still in place to help promote solar installation. Many states have specific renewable energy goals that are promoted through different government-enforced incentives.
Utah Solar Panel Incentives
The changes to panel costs make 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.
Where Utah Solar Panels will Go from Here
Within the past couple months, there has been a whirlwind of changes to Utah solar panels incentives and credits. In 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 in 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.
For more information about Go Solar Group and their solar program, you can fill out our free quote form. After filling this out, a solar representative will help you to set up your no-obligation appointment.