R362-2-7. Investment Tax Credit, Eligible Costs for Commercial and Residential Systems, Solar PV (Photovoltaic)

  (A ) All eligible costs for solar PV energy systems must conform with Section R362-2-5, above. Solar PV energy systems must also meet the requirements in this Section.

  (B) The costs of the following solar PV energy system components are eligible for residential or commercial tax credits:

  1. Solar PV module(s);

  2. Inverter;

  3. Motors and other elements of a tracking array;

  4. Mounting hardware;

  5. Wiring and disconnects from modules to the inverter and from the inverter to the point of interconnection with the AC panel;

  6. Lightning arrestors.

  (C) The costs of additional components of solar PV energy systems are eligible for residential or commercial tax credits if the solar PV system is not grid connected and it provides electricity to a building or structure that is more than one quarter mile from a power distribution line operated by a retail electric utility provider. If these conditions are met, the following components are also eligible:

  1. Batteries;

  2. Battery wiring;

  3. Charge controllers; and

  4. Battery temperature sensors.

  (D) The costs of solar PV modules are eligible for Utah tax credits only if they are:

  1. Listed as eligible modules under the California Solar Initiative Program. A list of eligible modules may be found at the following site:

  http://www.gosolarcalifornia.org/equipment/index.html; or

  2. The applicant can demonstrate to OED that the modules meet standards that are equivalent to those of the California Solar Initiative Program as of calendar year 2007.

  (E) For grid connected solar PV systems, the cost of inverters are eligible for Utah tax credits only if:

  1. They are also listed as eligible inverters under the California Solar Initiative Program. A list of eligible inverters may be found at the following site:

  http://www.gosolarcalifornia.org/equipment/index.html; or

  2. The applicant can demonstrate to OED that the inverter meets standards that are equivalent to those of the California Solar Initiative Program as of calendar year 2007.

  (F) Solar PV modules must be must be certified for safety by a Nationally Recognized Testing Laboratory and be warranted by the manufacturer to produce at least 80% of rated output after twenty years of operation.

  (G) Inverters and charge controllers must be certified for safety by a Nationally Recognized Testing Laboratory and be warranted by the manufacturer against failure due to materials and workmanship for at least five years.

  (F) All solar PV energy systems must be designed and installed consistent with the National Electric Code Article 690.

  (G) Grid connected systems must meet all interconnection standards of the local electrical utility and must include with an application for a residential or commercial tax credit a copy of an interconnection or net metering agreement with the local electrical utility.

  (H) The costs of system performance monitoring hardware and software are not eligible for residential or commercial tax credits. Grid connected backup power and monitoring systems such as Grid Point back-up power systems are not eligible for the tax credit with the exception that the inverter within such systems will be considered to carry a cost of $2,500 for the purpose of calculating the tax credit.

  (I) In order to be eligible for a residential or commercial tax credit, the taxpayer applicant must demonstrate that a solar PV energy system has been sited and installed appropriately. Specifically, the system should be:

  1. Located such that the solar modules are completely free of shade from trees and other plants, buildings, chimneys, vent pipes, utility poles, and other objects that would reduce system output for at least two-thirds of the daylight hours at the site;

  2. Positioned so as to optimize the average annual solar radiation values (kWh/M²/day). Guidance for siting may be found at the National Renewable Energy Laboratory's (NREL) National Solar Radiation Database (found at:

  http://rredc.nrel.gov/solar/pubs/redbook/PDFs/UT.PDF);

  3. Positioned such that the fixed solar array azimuth shall be oriented within:

  a. 115 degrees and 245 degrees if the fixed pitch is greater than 35 degrees from horizontal, or

  b. 90 degrees and 270 degrees if the fixed pitch is 35 degrees or less from horizontal.

  (J) In order to be eligible for a residential or commercial tax credit, a solar PV energy system must be certified for safety by one of the following:

  1. A Utah licensed electrical contractor (S200);

  2. A Utah licensed solar photovoltaic contractor (S202);

  3. A licensed contractor who has obtained written approval by the Utah Department of Occupational Licensing for the installation of solar PV systems; or

  4. A county or municipal building inspector licensed by the State of Utah. Proof of this certification may be required on the tax credit application.

  (K) For purposes of computing eligible costs for residential and commercial tax credits, the reasonable cost of a solar PV energy system that is grid connected or that provides electricity to a building or structure that is one quarter mile or less from a power distribution line operated by a retail electric utility provider is considered to be no higher than $5 per watt of rated output capacity for all eligible costs listed above and in Section R362-2-5 and prior to any cash rebates or incentives that the taxpayer may receive from a third party (such as a utility).

  1. For a residential tax credit application with total pre-rebate eligible costs exceeding $5 per watt of capacity, the amount of the tax credit shall be calculated as follows:

  Tax credit granted = (($5 x rated output capacity in watts) - rebates) x 0.25

  2. For a commercial tax credit application with total eligible costs exceeding $5 per watt, the amount of the tax credit shall be calculated as 10% of costs calculated as follows:

  Tax credit granted = (($5 x rated output capacity in watts) - rebates) x 0.10

  (L) For purposes of computing eligible costs for residential and commercial tax credits, the reasonable cost of solar PV energy system that is not grid connected and that provides electricity to a building or structure that is more than one quarter mile from a power distribution line operated by a retail electric utility provider is considered to be no higher than $10 per watt of rated output capacity for all eligible costs listed above and in Section R362-2-5 and prior to any cash rebates or incentives that the taxpayer may receive from a third party (such as a utility).

  1. For a residential tax credit application with total pre-rebate eligible costs exceeding $10 per watt of capacity, the amount of the tax credit shall be calculated as follows:

  Tax credit granted = (($10 x rated output capacity in watts) - rebates) x 0.25

  2. For a commercial tax credit application with total eligible costs exceeding $10 per watt, the amount of the tax credit shall be calculated as 10% of costs calculated as follows:

  Tax credit granted = (($10 x rated output capacity in watts) - rebates) x 0.10