Lawmakers in Utah have reached a compromise that would phase out the state’s solar tax credit by 2021, media sources report.
The bill would use a step-down approach that limits how much of a tax credit each solar customer can receive instead of placing a cap on the aggregate amount of tax credits the state would make available.
- The bill has passed committee and is headed to floor debate in the state’s House of Representatives.
Booming residential solar sales have prompted several states to rethink their solar tax credit plans. Louisiana and New Mexico are among the states that have cut back or eliminated their incentive programs.
State subsidies are also the subject of debate in Utah, where recent growth in residential installations could cost the state as much as $6 million this year, according to the Salt Lake Tribune.
Utah rooftop solar customers can currently claim $2,000 of tax credits on their state tax return, but under the compromise agreement, HB 23, that amount would be reduced by $400 a year starting in 2018.
The solar power industry would have preferred to see the tax credits continue, "realizing the political pressures and budgetary pressures this year, we aren't contesting this," Ryan Evans, president of the Utah Solar Energy Association, told the Tribune.
The trade group leader said the increasing affordability of rooftop solar systems should allow his members to absorb the subsidy stepdown.
The bigger threat to the solar industry may come from rate design and net metering changes under negotiation between solar stakeholders and utility Rocky Mountain Power. The company withdrew a controversial proposal in December after public backlash to seek "mutually agreeable solutions" with solar and consumer groups.