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Health, Science & Environment

Lawmakers Move To Phase Out Rooftop Solar Tax Credit

Rep. Jeremy Peterson presentation
Utah State Legislature
Rep. Jeremy Peterson, R-Ogden, says its time to phase out Utah's solar tax credit because of its impact on school funding. The credit is expected to cost the state around $20 million this year.

Lawmakers took a first step Wednesday toward phasing out the state tax credit for rooftop solar panels.

Rep. Jeremy Peterson, R-Ogden, said the tax incentive reduces state funding for schools by around $20 million, and that impact is expected to balloon to more than $60 million in a few years as rooftop solar skyrockets in Utah.

“It’s time to pull those training wheels off and let the industry run under its own strength,” Peterson told the Interim Revenue and Taxation Committee.

Peterson said the price for rooftop solar is declining, so the incentive isn’t as important as it used to be. Since the state started offering the credit in 2002, homeowners have been able to claim a tax credit of up to $2,000 for installing rooftop panels.

But solar industry advocates said Utah gets economic benefits from solar as well as better air quality.  They estimated a ripple effect of more than $15 in economic benefits for every dollar spent on the solar incentive.

“This may be $20 million of the best money we spend for our children’s future,” said Sen. Jim Dabakis, D-Salt Lake City, urging against the phase out.

Solar advocates said the proposal needs more study. They fear the fast-growing solar industry will stall – especially if state regulators approve new, higher net-metering rates that have been requested by Rocky Mountain Power.

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