What’s Up with Rooftop Solar in Utah?
Rooftops across Utah are ablaze with sleek, black panels and environmentally conscious homeowners are reveling in the experience of going solar. The journey of installing a photovoltaic system is gratifying – a vindicated step toward improved air quality, increased self-reliance, and reduced dependence on fossil fuels. Of course, lower electricity bills and handsome financial returns are compelling reasons too.
Over the last several years, Utah’s solar industry has grown exponentially, outpacing all other job sectors and bringing an economic boom to our State. Once considered a fringe technology, solar has officially gone mainstream. And now, like many of our treasured resources in Utah, the solar industry is finding itself under threat.
Last year alone, the Utah solar industry has been forced to weather a three-pronged offensive. First and foremost, you’re probably aware of the Trump administration’s enactment of an import tariff on all solar panels – a shortsighted action likely to affect a modest price increase on typical rooftop systems. Next, utility companies have begun aggressively campaigning to lessen compensation rates for net-metered customers who’ve invested in solar systems. Lastly, the Utah legislature has reduced the residential renewable energy tax credit by -$400. Combined, these external forces have created confusion and, for the first time, new solar installations are forecast to soften. We’ll do our best to set the record straight and demonstrate that now is still a great time to consider going solar.
In January, despite vociferous opposition, the Trump administration enacted a whopping 30% tariff on all imported solar panels. According to the Solar Energy Industry Association, (SEIA), this decision will “create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs”. While this sounds alarming, the import tariff DOES NOT result in a 30% cost increase for a solar installation. Because panels account for a small fraction of total system costs, the tariff should only affect a nominal price increase of perhaps 5% or so. And with relentlessly increasing global demand, solar prices are forecast to continue falling at a steady rate. Savvy local and regional installers have taken strategic actions to insulate customers from price increases, rendering the tariff a moot point.
Next, Rocky Mountain Power, Utah’s largest electricity monopoly, implemented a new transitional net metering rate structure last November. Under the new program, solar system owners continue to receive full retail value for solar energy immediately consumed by the home. In contrast, surplus energy exported back to the grid is now compensated at roughly 90% of its historical value. This new rate structure incentivizes homeowners to use more solar energy on-site, a term known in the industry as “self-consumption”. This can be achieved through battery storage or by simply changing energy usage behaviors, e.g. running the air conditioner or clothes dryer while the sun is shining. Solar homes with average energy needs will hardly notice a change to their return on investment. Although, “energy hog” customers with high electricity demands will suffer disproportionately from the rate change.
Finally, at the close of 2017, the Utah Residential Renewable Energy Tax Credit decreased from $2,000 to $1,600 marking the beginning of a gradual phase-out. However, in early February, Utah lawmakers approved Senate Bill 141, extending the $1,600 tax credit for three years through 2020. This measure provides much needed relief and should increase buyer confidence.
On an even brighter note, the Federal 30% Solar Tax Credit remains unchanged and is, without question, the best financial incentive for reducing the cost of solar. Again, the Federal Government is currently providing an uncapped 30% Tax Credit for the cost of a rooftop solar system.
Creative Energies will be hosting the following free educational workshops:
Thursday, March 22nd 5:30 – 6:30 pm
Wednesday, April 18th 5:30 – 6:30 pm
Creative Energies Solar
455 West 1700 South
Salt Lake City, Utah 84115
About the author:
Scott Jones is credentialed by the North American Board of Certified Energy Practitioners, (NABCEP), in photovoltaic technical sales. He attended the University of Utah and holds an MBA with emphases in financial analysis, leadership and strategy. Scott spearheads our community solar initiatives and works closely with the University of Utah, U Community Solar, the Sierra Club, and Utah Clean Energy for renewable energy advocacy and education. Having completed hundreds of projects and with a system on his own roof, Scott is hands-down one of the most experienced solar professionals in Utah.
In his late teens, Scott left the flatlands of Kansas and headed west in search of adventure. He landed in Salt Lake in ’95 and wasted most of his youth skiing powder, backpacking, SCUBA diving, and river running in his hand-built whitewater dory. His current base camp is in Sugar House where he and his wife are busy raising three of the finest children you’ll ever meet. He’s now mastered the art of car camping, traded in his 4WD truck for a badass minivan, and can change a diaper in seven seconds flat. Give Scott a call. He’s a great solar resource and will provide honest guidance for your project.
About Creative Energies:
Creative Energies has been designing and installing solar for over 18 years. Our goal is to provide renewable clean energy to those who otherwise wouldn’t have access to it. We are a community of adventurous solar craftsmen who care deeply about our customers and the environment. We’re engaged in our communities, live healthy outdoor lifestyles, and try to balance the needs of work and family. We practice what we preach by operating out of Net Zero Energy offices that utilize energy efficient and passive designs and photovoltaic systems. Creative Energies is devoted to the mountain towns we work, live, and play in. We are a Certified B Corporation, meeting the highest standards of overall social and environmental performance, transparency and accountability, and aspire to use the power of business to solve social and environmental problems. We are also proud members of Amicus Solar Cooperative, which allows us to aggregate nationwide purchasing power and pass the savings forward to our customers.