Iowa State Solar Power Rebates, Tax Credits, and Incentives

rider way des moines iowa Iowa State Solar Power Rebates, Tax Credits, and Incentives
Rider Way – Des Moines, Iowa

UPDATED 4/20/09

Solar Legislator Score: Iowa State Solar Power Rebates, Tax Credits, and Incentives Iowa State Solar Power Rebates, Tax Credits, and Incentives Iowa State Solar Power Rebates, Tax Credits, and Incentives Iowa State Solar Power Rebates, Tax Credits, and Incentives

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. Iowa’s leadership does not 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 Iowa 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. 

While Iowa does not directly provide incentives such as rebates to directly subsidize the purchase of solar energy systems, utilities are required to derive a certain percentage of their energy mix from renewable sources like solar. This has led utilities to establish rebates of their own for homeowners to go solar. To see if you qualify for utility rebates, we recommend hooking up with one of our friendly Iowa solar experts. They’ll explain exactly what you are in line to receive from the utility and the government by going solar.

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). Net metering basically require your utility company to compensate you for the electricity you feed back into the grid when your solar panels are producing electricity and you are not around to use it. Subject to system limits of 500 kW, net metering is available to all who generate electricity using solar power. Excess power generation is credited to your future power bills. The provisions are more fully described here.

Solar access easements assure businesses and homeowners are allowed access to sunlight for their solar cells to work. Furthermore, municipalities have been granted the right to override restrictive arrangements by subdivisions that would otherwise prohibit or limit the use of solar panels. Happily, cookie cutter aesthetics won’t be in the way of Iowa’s economic and energy progress.

STATE FINANCING

Don’t have thousands of dollars burning a hole in your pocket? The Alternate Energy Revolving Loan Program (AERLP) can provide you funds for your solar panel installation. 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.

IOWA TAX CREDITS

In 2005, renewable energy production tax credits were made available for businesses, schools, rural electric co-ops, and agriculture. 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 provided residential homeowners tax credits for producing electricity with solar as well. More details on residential tax credits here.

TAX EXEMPTIONS

Solar electric systems in Iowa are property tax exempt. Not only that, but solar electric systems are sales tax exempt as well!

IOWA’S RENEWABLE PORTFOLIO STANDARD

Iowa’s Green Power Procurement Program, a 2005 directive by former Governor Tom Vilsack, mandated state agencies obtain at least 10% of their electricity needs from renewable energy sources, including solar power, by 2010. 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 PV is among these resources, the mandated requirement is currently being fulfilled mostly by wind power and biomass.

The state’s mandatory utility green power option requires all electrical utilities to offer green power options to their customers. This allows you to make voluntary contributions to support the development of renewable energy sources.

IOWA SOLAR GRANTS

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.

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 Iowaresident’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 30% 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 some ambitious goals to develop more use of solar in the state. With the production incentive of 1.5 cents per kwh, and access to state financing, the state is well ahead of its neighbors from a legislative standpoint.

Click here to have a local solar expert contact you to discuss options and financing for your Iowa home or business

Read the 10 brilliant comments below or add yours!

Don Davison Identicon Icon Don Davison
Comment on February 8th, 2008.

I am attempting to read / view this web page using Microsoft Internet Explorer and see there is a problem with the HTML code, because I can see the code between some of the lines of text on the web page. Although the colors are appropriate for Iowa (black & gold, the gold border around the black background behind the gray text is extremely difficult to read. I know a different color combination will be greatly appreciated by most viewers and hope you have the opportunity to view and agree, and modify.
Thank you for your consideration.
Don Davison

davison@isp.com

Comment on February 9th, 2008.

Don,

Hopefully the visibility issue has been resolved. We do know our page is best viewed using Mozilla Firefox. We encourage you to download that browser instead. You’ll also be safer on the web.

Cheers,

- Dan

Warren McKenna Identicon Icon Warren McKenna
Comment on March 24th, 2008.

Are you kidding! Iowa sucks when it comes to funding site based renewable energy. They don’t offer a single tax credit for residential or business for PV or Wind. Look at the surrounding States like MN, WI, MO for better deals. Come on Iowa give us a bone, like $ 2 per watt for PV if you would.

Comment on March 25th, 2008.

Warren,

Iowa provides a 1.5 cent per kilowatt tax credit for solar over a period of 10 years. Granted, that isn’t a whole lot of cash but many utilities are now required to derive at least a certain percentage of their energy from renewable sources by next year. Therefore, more generous incentives are popping onto the horizon from them, not the state government.

Comment on April 30th, 2008.

I own an electric company here in Des Moines and we are geared up for installing a lot of large solar systems in the near future. We have been trained by some of the largest solar producing compaines and are now working with some very well known companies in Des Moines. We really need the state to jump on board and realize how much ability the state has for solar production.

solarium Identicon Icon solarium
Comment on August 4th, 2008.

unless I find out different Iowa is all talk and no go for assistance in solar or wind installation at residential level. Im ready,own my home have lots of land and some money. If you can point me in a direction please do.

Comment on August 5th, 2008.

Solarium,

We have friends in Iowa who would love to talk to you, fill out our form and we’ll get the ball rolling. Incentives are out there in Iowa, they’ll break out the numbers for you.

Cheers,

- Dan

Jeff Identicon Icon Jeff
Comment on August 11th, 2008.

From what I see, Iowa looks like a poor state for wind power credits. No surprise, Chet Culver is more interested in taking our money than providing tax breaks for people trying to help the environment.

Comment on August 13th, 2008.

Jeff,

Not sure about the wind power credits in Iowa, though I’m sure there’s a fair amount of wind blowing across the state. Unfortunately it seems most of that wind is coming out of Des Moines in your case. We encourage you to look at what the utilities are starting to offer Iowa homeowners for going solar.

Cheers,

- Dan

Peter Identicon Icon Peter
Comment on May 24th, 2009.

Iowa is not a homeowner friendly state for funding alternate energy. The best return is on Solar – and even with that, if you purchase a 6KW gridtie solar system on sale the best timeframe you can hope to break even on it is about 15 years. That’s just about the time you have to start fixing everything – not to mention the 25k dollars tied up in equipment that is not earning anything for 15 years. Read the Iowa laws – if you take the property tax exemption you are not eleigible for the state tax credits. Ha!!!! Go solar – yeah right!! I have 2500 sq ft of southern facing barn roof, when Iowa gets serious about solar -I will too!!!

Scott Identicon Icon Scott
Comment on September 1st, 2009.

This is madening and a joke. Politicians wonder why the youth of Iowa leave this state. Maybe because the leadership of this state has no clue about establishing meaningful forward looking legislation.

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