A recent article in the Salt Lake Tribune, Utah’s enthusiastic embrace of solar power could cost the state $42 million, highlighted the incredible growth of the solar industry in Utah. The article, however, focused on the cost to the state of Utah and not the benefits this expansion brings to our economy.
As the article indicated, the cost of solar has dramatically decreased, 72% over the last decade, leading to a substantial increase in solar installations, especially in residential installations. This increase has led to significant job growth and an economic boom for Utah.
From 2012 to 2015, jobs in the solar industry grew from 290 to almost 3,000. In 2016, the industry expects to create 700 new jobs, an increase of 24 percent- not many industries can show such growth. Additionally, last summer the Governor’s Office of Economic Development announced an agreement with Vivint Solar and Solar City where both companies committed to generate another 7,000 jobs over the next decade. Considering there are an estimated 11,000 jobs currently in the energy sector, solar’s unique ability to add jobs, because of the distributed generation model of rooftop solar, is proving valuable.
For every $20 million Utah invests in homeowners, it results in more than $300 million in economic activity for our state. For every $2,000 Utah credits residents on their income tax, it generates an immediate return of approximately $1,000 in sales taxes to the state and local economies. Add in sales and property taxes paid on equipment and tools to support thousands of employees, corporate income taxes paid by solar companies and income taxes from new jobs created, and it is apparent the state recoups its initial $2,000 back, perhaps even before Utah has spent a penny in tax credits, when residents claim the credit the following year. Further, the one-time credit offered by the state fuels future tax revenues from property and personal and corporate income taxes for a generation.
At what point does an incentive start to be called an investment? And what better investment is there than one given to individual residents? And what better investment is there than one that generates paid sales tax long before the state credits income tax the following year? The state created this solar energy tax credit for residents because of its societal and environmental benefits and to create greater energy independence, and now this tax credit is fueling an explosive economic benefit as well.
There are many other ways to highlight solar energy’s benefit to our economy, whether it be the $750,000 in energy savings at Hill Air Force Base, the 73% savings that Real Salt Lake sees annually from their solar array, or the billions of dollars in investments from utility scale solar projects in central and southern Utah. Fortunately, for Utah, that list of beneficial ways solar is impacting our economy is growing steadily.
As a result of this growth, the solar industry is engaged in discussions with state legislators and government officials to find solutions regarding the future of Utah’s solar tax credit. Utah has proven its ability to find unique solutions to issues we face- the Utah way. We will find the right solutions here, also, to ensure this growth is not stifled. Furthermore, Governor Herbert has emphasized an “all of the above” strategy to meet our growing energy needs; solar is certainly a part of that plan…
This is an exciting time for solar energy and Utah as we expand our energy generation options and provide great economic benefit back to our state.