Iowa experiences a varied climate with around 205 sunny days annually, providing a decent amount of sunlight for solar energy initiatives. While it may not be among the sunniest states, Iowa’s weather conditions still present opportunities for viable solar power projects. The state has some of the top solar incentives in the US, given are some of the incentives available to Iowa home and business owners:
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Federal Solar Investment Tax Credit (ITC):
Homeowners that qualify for the Solar ITC can take advantage of a tax credit for 30% of the total purchase price of their solar system, no matter the system size or cost. This credit applies to all solar projects that begin construction in 2023 and will last through 2033, at which point it will drop to 26% .
Incentive and Rebates
Iowa offers a solar tax credit that is equivalent to 50% of the federal solar tax credit. This means that for an average 6-kW solar energy system installed for $18,000, you can claim $5,400 from the federal government (30% * $18,000) and an additional $2,700 (50% of the federal credit) on your yearly tax returns. For any new solar PV system installed in Iowa, the assessed value of the system is exempt from your property taxes for five years.
That means that, even though your solar installation adds value to your property, the added value can’t be counted when property is being assessed for taxes in the first five years of installation. When you purchase a solar energy system in Iowa, the equipment is exempt from sales tax under Iowa’s sales tax exemption for electrical generating equipment, saving you 6% on your purchase price.
Renewable Energy Property Tax Exemption:
For any new solar PV system installed in Iowa, the assessed value of the system is exempt from your property taxes. That means that, even though your solar installation adds value to your property, the added value can’t be counted when property is being assessed for taxes.
Iowa Sales Tax Exemption:
When you purchase a solar energy system in Iowa, many of the components are exempt from sales tax under Iowa’s sales tax exemption for electrical generating equipment. According to the law, you don’t have to pay sales tax on your solar modules, racking, and inverters because they are directly involved in the production of electricity.
Net Metering:
Solar energy systems under 1 megawatt (MW) in size are eligible to participate in net metering, which allows you to send your extra electricity back into the grid and get credits on your electric bill. When your panels aren’t producing all the electricity you need, you can use your credits instead of having to pay for electricity from your utility.
Further information and programs can be found at the Programs.Dsireusa.org
