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The Utah Renewable Energy Tax Credit encourages small renewable energy systems.

Utah

• Renewable Energy Systems Tax Credits
• Renewable Energy Sales and Use Tax Exemption

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Renewable Energy Systems Tax Credits

Investment Credits
The Utah Renewable Energy Tax Credit, revised in 2007, is intended to encourage individuals and businesses to install renewable energy systems. Technologies eligible for the credit include active and passive biomass (including landfill gas), solar systems, hydropower, and wind. Systems must either produce fuel or electricity to qualify. The credit for commercial biomass systems, structured as a refundable credit, is 10 percent of the cost of installation or improvements in systems with a total capacity of less than 600 kilowatts. The maximum investment tax credit offered is $50,000 for these systems. Businesses that lease such a system are also eligible, and may use the credit for no more than seven years from the initiation of the system.

This revised tax credit does not expire and is available to systems beginning service on or after January 1, 2007. Applications are available on the State Energy Program’s Web site and must be submitted, along with any requested receipts, to the State Energy Program. If all provisions of the tax credit rule have been met, the State Energy Program will certify the system and grant the tax credit. Detailed application requirements are available on the State Energy Program website.

Production Credits
Utah offers a production tax credit for biomass (including landfill gas), wind, and geothermal energy systems that produce electricity and have a generating capacity equal to or greater than 660 kilowatts. For commercial biomass systems, the credit is $0.0035 per kilowatt-hour of electricity sold for the first four years of operation. The credit must be used in the year generated. Businesses that lease a system of this capacity are also eligible.

Applications are available on the State Energy Program’s Web site and must be submitted, along with any requested receipts, to the State Energy Program. If all provisions of the tax credit rule have been met, the State Energy Program will certify the system and grant the tax credit. Detailed application requirements are available on the State Energy Program Web site.

Renewable Energy Sales and Use Tax Exemption

Utah offers an exemption from the state sales tax for the purchase or lease of any equipment used to generate electricity from renewable energy sources. Eligible technologies include landfill gas, wind power, solar power, biomass, anaerobic digestion, hydroelectricity, and geothermal resources. Eligible purchases or leases must be made on or after July 1, 2004 and before June 30, 2009. All leases must be made for at least seven years.

Qualified facilities must have a generation capacity equal to or greater than 20 kilowatts. However, a facility with a smaller generation capacity may be eligible if it can increase its capacity by at least one megawatt as a result of the purchased equipment. Generating equipment, control and monitoring systems, power lines, substation equipment, lighting, fencing, pipes, and equipment for locating power lines and poles are all qualified equipment. Not eligible for the exemption are tools and other equipment used in construction of a new facility, contracted services required for construction and routine maintenance, and equipment used or acquired after the project is operational. This exemption expires on June 30, 2009.