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Combined Heat and Power Partnership

Renewable Energy Sales Tax Exemption (UT)

Date Last Updated7/15/2013
Incentive TypeTax
State/FederalUT
Incentive Administrator/Contact OfficeUtah State Tax Commission
Incentive Initiation Date7/1/2004
Incentive Expiration Date6/30/2019
Incentive Size and Funding SourceUtah offers a state income tax credit for renewable energy systems. Systems qualifying for the Utah Renewable Energy Systems Tax Credit must use certain types of renewable energy (specified below) to provide heat, electricity, or mechanical energy. The investment tax credit for residential systems is 25% of the equipment and installation cost up to a maximum of $2,000. Commercial systems receive a 10% investment tax credit up to a maximum of $50,000. Commercial systems that use wind, biomass, or geothermal energy and have a production capacity greater than 600 kW are not eligible for an investment tax credit, but are eligible for a production tax credit of $0.35 per kWh of electricity produced. The new tax credits enacted in 2007 do not expire.
Eligible RecipientBusinesses and homeowners with eligible systems installed in 2007 or later. Non-profit and public institutions that do not pay income taxes are not eligible to receive tax credits.
Eligible FuelLandfill Gas; Woody Biomass; Biogas; Other
Eligible Project Size (MW)660 kW or greater for the production tax credits.
Less than 660 kW for the investment tax credits.
Minimum Efficiency Required (%)Does Not Specify
Other Selected Eligibility CriteriaEligible Residential Systems include: active solar thermal, passive solar thermal, solar photovoltaic, wind turbines, hydro (water energy for generating electricity or mechanical power), ground source heat pumps, water source heat pumps, direct use geothermal, biomass systems (using animal or plant wastes to produce electricity), biomass systems (using animal or plant wastes to produce heat, except for the burning of wood for space heating).

Eligible business systems include: active solar thermal, passive solar thermal, solar photovoltaic, wind turbines, hydro, electric generation (or heat from landfill, sewage, or other waste treatment methane), biomass systems (using animal or plant wastes to produce electricity), biomass systems (using animal or plant wastes to produce heat, except for the burning of wood for space heating), ground source heat pumps, water source heat pumps, direct use geothermal, geothermal electricity generation.

In most cases, systems that involve the combustion (i.e., burning) of any fuel are not eligible for the credit with two exceptions:
  • Systems using methane generated from solid or liquid wastes to generate heat or electricity for a business.
  • Burning of plant or animal wastes for purposes other than space heating for a business.
No system that uses conventional fuels (oil, diesel, gasoline, natural gas, propane, etc.) is eligible for the credit. Measures intended to improve the efficiency by which a home or business consumes energy are not eligible, while systems used by a business to provide energy for sale are eligible.
Application Form(s)Application Forms
Other Incentive DetailsIn 2007, the Utah Legislature revised the State's Renewable Energy Systems Tax Credit to allow credits for additional technologies, to clarify the Office of Energy Development's rulemaking authority, and to create a new production tax credit for large wind, biomass, and geothermal systems that produce electricity. Because of this revision, different rules apply for systems installed before and after January 1, 2007.
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