Iowa State Solar Power Rebates, Tax Credits, and Incentives

 

Iowa State Solar Power Rebates, Tax Credits, and Incentives

SOLAR LEGISLATOR SCORE:

STATE LEGISLATION
Iowa, long known for its prodigious corn crops, is now becoming known as a major producer of ethanol and a leader in the production of alternative fuels. But their leadership doesn’t stop there. On May 23, 2007, Iowa Governor Chet Culver signed legislation establishing the Office of Energy Independence, and received generous program funding from the state legislature: $100 million over a four year period – money that will be used largely for the research and development of alternative energy technologies. The new bill, Iowa Power Fund (HF 918), has state officials hopeful that their state will become not only energy independent, but a net exporter of energy. Continuing the momentum, on November 15, 2007, the governor joined a group of other Midwestern states by signing the Midwestern Regional Greenhouse Gas Reduction Accord. Although the state has failed to provide incentives such as rebates that directly subsidize the purchase of solar energy systems, they have initiated a substantial number of other programs which earn them a solar rating of “Excellent!”

STATE INCENTIVE PROGRAMS, UTILITY REBATES, UTILITY LOANS, and UTILITY INCENTIVES

Iowa’s Net Metering rule was adopted by the Iowa Utility Board in July 1984 and applies to customers of Iowa’s two investor-owned utilities, MidAmerican Energy and Alliant Energy - Interstate Power and Light (IPL). Subject to system limits of 500 kW, net metering is available to all who generate electricity using alternate energy production facilities. Excess power generation is credited to the customer’s future billing. Provisions are more fully described at: http://www.state.ia.us/government/com/util/docs/orders/2006/0808_PURPAStd11.pdf

Solar Access Easements assure that all sectors will be allowed access to sunlight to operate photovoltaic and other solar devices. Furthermore, municipalities have been granted the right to override restrictive covenants by subdivisions that would otherwise prohibit or limit the use of solar collectors. (http://www.dsireusa.org/documents/Incentives/IA04R.htm.)

The Alternate Energy Revolving Loan Program (AERLP) provides loan funds for eligible renewable energy technologies (solar, biomass, wind and small hydro-electric power facilities). Administered by the Iowa Energy Center and funded by the state’s investor-owned utilities, the AERLP provides loan funds to individuals and organizations who build renewable energy production facilities in Iowa. Qualified applicants can receive a loan consisting of AERLP funds up to 50% of the total loan at 0% interest; the maximum loan is $250,000 for a maximum term of 20 years. Lender-provided funds at market rate make up the other 50%. As loans are repaid, funds become available to new applicants. (http://www.energy.iastate.edu/funding/aerlp-index.html.)

In 2005, Renewable Energy Production Tax Credits (Corporate) were made available for the production and sale of renewable energy by the following sectors: commercial, industrial, schools, rural electric co-ops, and agriculture. Eligible technologies include solar thermal electric, photovoltaics, landfill gas, wind, biomass, hydrogen, and anaerobic digestion systems. Wind generating capacity can be up to 450 mW, but other renewable energy systems are eligible only up to 20 mW. Maximum incentives of 1.5 cents/kWh are available for ten years after the facility begins producing and selling energy. A similar bill enacted at the same time, Renewable Energy Production Tax Credits (Personal), addressed the same technologies and the same sectors, but added residential users to the eligibility mix and some variations in provisions. These were rather complex bills containing uncertainties in the original language that were clarified and/or amended with statutory changes. For details on Iowa Codes 476B and 476C, go to: http://www.state.ia.us/government/com/util/energy/renewable_tax_credits.html .

A Property Tax Exemption for Renewable Energy Systems (passive solar space heat, solar water heat, solar space heat, solar thermal electric, photovoltaics, and wind) can be taken by the commercial, industrial, residential, and agricultural sectors for full value of the project for five years.

More here: http://www.iowadnr.com/energy/renewable/incentives/solar.html.

A Wind and Solar Energy Equipment Sales Tax Exemption is also available to commercial, residential, general public/consumer, and agricultural users for 100% of the tax. Details here: http://nxtsearch.legis.state.ia.us/NXT/gateway.dll/2007%20Iowa%20Code/2007code/1/14330/14331/14516/14519?f=templates$fn=document-frameset.htm$q=[field%20folio-destination-name:’sec_423_3′]$x=Advanced#0-0-0-3949.

Iowa’s Green Power Procurement Program, a 2005 directive by former Governor Tom Vilsack, mandated that state agencies obtain at least 10% of their electricity needs from renewable energy sources, including solar power, by 2010. Details at http://www.iowadnr.com/energy/eo41.html.

Alternative Energy Law (AEL) requires Iowa’s two investor-owned utilities, MidAmerican Energy and Alliant Energy - Interstate Power and Light, to contract for a combined total of 105 mW of their generation from renewable-energy resources. Although photovoltaics are among these resources, the mandated requirement is currently being fulfilled mostly by wind power and biomass. (http://www.dsireusa.org/documents/Incentives/IA01R.htm.)

The state’s Mandatory Utility Green Power Option requires that all Iowa electrical utilities offer green power options to their customers, allowing customers to make voluntary contributions to support the development of renewable energy sources. (http://coolice.legis.state.ia.us/Cool-ICE/default.asp?category=billinfo&service=IowaCode&ga=82&input=476.47.)

To encourage education and research of energy alternatives and efficiency, Iowa has initiated Grants for Energy Efficiency and Renewable Energy Research. This program is available to universities and colleges, nonprofit energy organizations, and community-based educational groups. Grants are awarded on a competitive basis. (http://www.energy.iastate.edu/funding/gp-index.html).

EXAMPLE RESIDENTIAL SOLAR INSTALLATION

With a population of just fewer than 200,000, the State Capitol of Des Moines (Polk County) is the largest city in Iowa. The area experiences enough sunshine to warrant a solar rating of “good”, making it a viable candidate for a solar energy system. The average Iowa resident’s electrical usage is 10,428 kWh/year. If a Des Moines homeowner has 400 square feet of roof space for a solar collector and $36,000 for equipment and installation – less $2000 from a federal tax credit – electricity usage can be reduced by half. The benefits include:

• An estimated increase in property value of $8,540
• An estimated 25-year utility savings of $17, 918
• An estimated 25-year greenhouse gas (CO2) reduction of 107 tons
  
  

CONSENSUS

Iowa has clearly defined itself as a leader in the development of alternative energy sources, and promotion of solar power is prominent among most of the state’s legislation. Other states who are attempting greater energy sufficiency should follow Iowa’s example.

---

Click here to get hooked up with a local solar installer for your home or business