Utah's solar economics are a study in mixed signals. The state has outstanding sun (5.8 peak hours/day), full retail net metering from Rocky Mountain Power, and competitive install costs around $2.55/watt. But Utah's electricity rate of $0.116/kWh is one of the lowest in the Mountain West, and the state's 25% income tax credit is capped at a very low $800 — barely a rounding error on a typical system. Payback runs 9–12 years, which is solid but not exceptional given the sun resource.
Disclaimer: All cost and savings estimates use Lawrence Berkeley National Laboratory Tracking the Sun 2024 cost data and EIA Electric Power Monthly 2025 rate data. Section 25D residential solar credits expired December 31, 2025. Get at least three installer quotes before deciding.
Key Takeaways
- Utah averages 5.8 peak sun hours/day — among the best in the Mountain West
- Rocky Mountain Power offers full retail net metering at $0.116/kWh
- Utah’s 25% solar state tax credit is capped at just $800 — far lower than neighboring New Mexico ($6,000) or Oregon ($6,000)
- Estimated payback: 9–12 years; $2.55/watt install costs and 5.8 sun hours help offset the low rate
Utah Solar Costs in 2026
At $2.55/watt, Utah is one of the more affordable solar markets in the Mountain West. A 9 kW system for a typical Salt Lake City home costs approximately $22,950 before any incentives. After Utah's 25% state income tax credit (sadly capped at $800), net cost drops only modestly to approximately $22,150.
The $800 cap is the most disappointing aspect of Utah's solar policy. A 25% credit on a $22,950 system would be $5,738 — but Utah limits the credit to $800 regardless of system size. That's the fifth-lowest state solar credit cap in the country among states that offer credits at all.
| System Size | Cost at $2.55/W | UT 25% Credit (max $800) | Net Cost | Annual Production (5.8 hrs) |
|---|---|---|---|---|
| 7 kW | $17,850 | –$800 | $17,050 | ~14,800 kWh |
| 9 kW | $22,950 | –$800 | $22,150 | ~19,000 kWh |
| 11 kW | $28,050 | –$800 | $27,250 | ~23,200 kWh |
The $800 credit applies only once per installation and is a Utah state income tax credit (nonrefundable). It's real, but it doesn't meaningfully change the payback math on a $22,000+ system.
Rocky Mountain Power: Net Metering
Rocky Mountain Power (a PacifiCorp company) offers full retail net metering for residential solar customers in Utah. Every kWh exported to the grid earns a credit at the same $0.116/kWh you'd pay to import electricity — clean, simple, and more favorable than the avoided-cost structures in Nevada or Texas.
Annual net excess generation — if you overproduce relative to your annual consumption — settles at a lower rate, but right-sized systems rarely reach net excess generation territory.
The practical implication: Utah solar works better than Tennessee or most of Texas on the export side, even though Rocky Mountain Power's rate is also low. Full retail net metering at least values exports fairly relative to the retail price.
| State | Rate | Export Policy | Peak Sun Hrs | Est. Payback (9 kW) |
|---|---|---|---|---|
| Utah | $0.116/kWh | Full retail NM ($0.116) | 5.8 | 9–12 years |
| New Mexico | $0.147/kWh | Full retail NM ($0.147) | 6.5 | 7–10 years |
| Tennessee | $0.124/kWh | Avoided cost (~$0.03/kWh) | 4.7 | 14–20 years |
| Colorado (Xcel) | $0.142/kWh | Full retail NM | 5.5 | 8–11 years |
The Low Rate Problem and How Solar Can Still Work
Utah's $0.116/kWh rate is low — generated partly by coal and natural gas baseload from PacifiCorp's diverse fuel mix. That means each self-consumed solar kWh saves roughly $0.20 less than the same kWh in California or Hawaii.
The counterweight is production volume. At 5.8 peak sun hours per day, an 9 kW Utah system produces approximately 19,000 kWh annually — the same system produces only 13,700 kWh in Tennessee and 10,200 kWh in Seattle. Outstanding sun partially compensates for the low rate.
For a 9 kW system with 85% self-consumption:
- Annual self-consumption: 19,000 × 0.85 = 16,150 kWh × $0.116 = $1,873/year
- Annual export credit: 2,850 kWh × $0.116 = $331/year
- Total annual benefit: ~$2,204/year
- Net system cost after $800 credit: $22,150
- Estimated payback: ~10 years
According to Lawrence Berkeley National Laboratory's Tracking the Sun 2024, Utah's competitive install cost of $2.55/watt is a meaningful offset for the low rate environment — lower upfront cost accelerates payback even when annual savings are modest.
What to Do Next
Size your system to your actual annual consumption.
Utah’s full retail net metering is favorable, but the $0.116/kWh rate means the financial penalty for oversizing is real. Target roughly 85–95% of your annual kWh consumption. Pull your last 12 months of Rocky Mountain Power bills and use that number as your system sizing target.
Claim the $800 state credit — it’s small but it’s real.
Utah’s 25% credit capped at $800 is filed on Utah form TC-40E. It’s a direct reduction in your Utah income tax bill, not a deduction. Make sure your installer knows you want to claim it — they should provide documentation of eligible system costs for your tax filing.
Get three competing quotes to capture Utah’s low install pricing.
Utah’s $2.55/watt average is already competitive, but quotes can range $0.30–$0.50/watt within a single market. On a 9 kW system, a $0.40/watt difference equals $3,600. EnergySage and SolarReviews both operate in Salt Lake City, Provo, and St. George markets.
See your Utah payback in one minute
Enter your Rocky Mountain Power rate, annual usage, and ZIP code — get a personalized estimate with no email required.
Adding an EV? Utah’s 5.8 peak sun hours generate substantial daytime production — ideal for mid-day EV charging that increases self-consumption and displaces gasoline costs. Our Whole-Home Bundle Calculator shows the combined solar + EV savings against your current energy costs.
Bottom Line
Utah is a genuinely viable solar market in 2026 despite low electricity rates. The combination of 5.8 peak sun hours (outstanding), $2.55/watt install costs (below average), and full retail net metering from Rocky Mountain Power produces 9–12 year payback estimates. The $800 state credit cap is a disappointment — Utah has 25% credit language but one of the lowest caps in the country. If you're comparing Utah to New Mexico (6.5 hrs, $6,000 credit, $0.147/kWh), New Mexico wins clearly. But Utah stands up well against most states east of the Rockies.
Related Guides
- Solar Panel Cost by State in 2026 — See how Utah compares to every other state for costs and incentives.
- Is Solar Worth It in 2026? — National payback analysis to put Utah’s numbers in context.
- Net Metering Guide 2026 — How Rocky Mountain Power’s net metering compares to other Mountain West states.
- Home Solar Panels: The Complete 2026 Guide — Everything you need to know before getting your first solar quote.
