They're calling the Utah Public Service Commission's decision on Friday a victory for clean air and energy as well as consumer choice.
But the commission ruled the utility failed to prove the fee was justified.
"What a bright day for Utah's future," said Sarah Wright, executive director of Utah Clean Energy. "This order protects energy choice in Utah, and recognizes the potential solar has to benefit all Utahns."
The utility hopes the commission revisits the issue, Rocky Mountain spokesman Dave Eskelsen said. The company argues such residential customers are not paying their fair share of its fixed costs to maintain the power system.
"It is a little disappointing that the commission did not take at least an interim step," he told The Salt Lake Tribune. "We understand that emotions are running high. We look forward to participating in the accumulation of more information."
Only Arizona and Georgia currently charge residential rooftop solar customers a monthly fee to help cover a utility's fixed costs, the Deseret News reported.
At the same time Friday, the commission approved a 1.9 percent rate increase for all residential customers that will boost monthly bills by an average of $1.76. The increase, which takes effect Monday, is expected to net the utility $35 million in the next year.
The commission also approved another general rate increase that will add another 73 cents per month to the average bill after it goes into effect in September 2015.