Is Solar Worth it in Utah?

Tyler Hansen | October 30, 2024

There are several factors to consider when determining which states are best for solar generation, including:

1. Peak Sun Hours

2. Electricity Prices

3. State Tax Credits

4. Solar or Battery Rebates

5. Net-Metering Rates

Peak Sun Hours

Peak sun hours refer to the times during the day when sunlight is most intense and solar panels can generate the most electricity. This usually occurs around midday when the sun is highest in the sky, typically between 10 a.m. and 4 p.m. During these hours, the sunlight is strong enough to produce about 1,000 watts of solar power per square meter, making it the optimal time for solar energy production.

Utah stands out in this regard, receiving an average of 5 to 5.5 peak sun hours per day, which is amongst the highest in the nation.

unboundsolar.com

Electricity Rates

Utah benefits from some of the lowest residential electricity rates in the nation, with average rates around $0.13 per hour. However, at the time of writing, Rocky Mountain Power is pushing for up to a 30% rate increase across the state.

Clint Branch/CNET

State Tax Credits

While some states offer tax incentives for residential solar installs, Utah phased out the incentives in 2023. However, businesses can benefit from the Utah state commercial solar tax credit, which offers 10% of the installation cost up to $50,000, in addition to the 30% federal ITC.

Battery Rebates

The Wattsmart Battery Program by Rocky Mountain Power offers Utah residents incentives for installing home battery systems that store excess solar energy. Participants receive up to $400 per kilowatt-hour of battery storage capacity, with a maximum rebate of $3,200. By joining, customers not only receive financial assistance but also contribute to grid stability by allowing Rocky Mountain Power to access stored energy during peak demand periods. This program reduces electricity costs for homeowners, enhances energy resilience, and supports a cleaner, more reliable energy grid in Utah.

The downside to this program is that the batteries have to be purchased from and installed by approved providers, making this program an unattractive option in most cases.

Net Metering Rates

Rocky Mountain Power’s net metering program allows Utah customers with solar panels to receive credit for excess electricity they generate and send back to the grid. Under this program, customers are credited at a rate of about 8 cents per kilowatt-hour for any energy produced in excess of consumption. The credits can then be applied to months when energy usage exceeds what is produced by your solar panels. While some states offer a one-to-one credit for excess energy produced, Utah's credit is better than many.

Other Factors to Consider for Your Home

When thinking about installing solar panels on your home, it is essential to assess the factors related to your home that can impact the return on investment (ROI). Elements such as the orientation of your roof, the presence of shading, and the age of your roof are crucial considerations. The most favorable orientation for solar panels is facing South, followed by East, West, and North (in descending order of effectiveness). The proximity of tall buildings and trees near your home can significantly reduce the amount of solar energy generated, so it is important to take this into account when contemplating solar power. Furthermore, it is prudent to evaluate the condition of your roof. If your roof will need replacement within the next 5-10 years, it is recommended to either replace the roof before installing solar panels or wait until after the replacement has been completed.

So, is Utah a Good State for Solar?

Dr. Rachel Newcomb, a researcher at moneygeek.com, conducted an in-depth analysis of the Return-on-Investment (ROI) for solar systems across all states in the country. According to the findings, Utah was positioned at the 28th spot out of 50, with an average system payback period of 8.3 years. Although ranking 28th falls below the top 50%, an 8.3-year payback period represents a solid investment opportunity, particularly considering the expected 25-30 years of production from your solar system.

Expert Tip

When exploring solar options, it is recommended to gather quotes from several companies for the same system to ensure a fair comparison. You might have encountered a door-to-door salesperson who made lofty claims about solar energy. In reality, these salespeople usually work as agents for larger corporations. They receive a price from a major company and then increase it (by a LOT!) before selling it to you. Often, these salespeople make impractical promises and offer products at inflated prices. Engaging with a trustworthy local company will likely result in a better deal.

Sources

Unbound Solar Blog. "Sun Hours Map: How Many Sun Hours Do You Get?" Accessed November 4, 2024

CNET Article. "Compare Your Energy Choices and Electricity Rates by State" Accessed November 4, 2024

Utah RESTC Flyer. "Renewable Energy System Tax Credit" Accessed November 4, 2024

Rocky Mountain Power. "Wattsmart Battery Program" Accessed November 4, 2024

Rocky Mountain Power. "Rocky Mountain Power Electric Service Schedule No. 137"November 4, 2024

Moneygeek Article. "States With the Highest ROI from Solar" Accessed November 4, 2024