Iowa’s new solar tax credits are ready for you

If fully utilized, Iowa's new solar tax credit could help install enough solar panels on homes and businesses to double Iowa's current solar energy output in just one year. Learn more at iaenvironment.org.

Governor Branstad held a ceremonial signing ceremony recognizing the passage of the new solar tax credits on Tuesday, June 26.

Governor Branstad (center, seated) held a ceremony marking passage of the credits June 26.

If you pay state income taxes, Iowa’s new tax credit for solar energy means there’s never been a better time to install solar panels on your home or business.  The Iowa legislature created a new state tax incentive for solar energy technologies in the final weeks of the 2012 session. Governor Branstad signed the legislation on May 25 and now the Iowa Department of Revenue has issued guidance and an application form to apply for the credit.

Here’s how it works:

  • Eligible technologies include solar photovoltaics (also called solar PV, these are the panels that generate electricity) and solar thermal systems, which are often used to provide hot water.
  • The Iowa guidelines match guidelines for existing federal tax credits for solar energy installations. If you qualify for the federal tax credits, you should be able to claim the Iowa tax credit.
  • And here’s the best part:  When the state and federal tax credits are combined, the credits can offset close to 50% of the upfront cost of your new solar energy system.

With solar prices coming down and the availability of both the state and federal tax credits for the next few years, now is a great time to go solar. Solar PV generates electricity on-site to offset or even eliminate your electric bill. Solar PV is a great fit in Iowa, as our demand for electricity is often highest during hot summer days – just when solar PV is generating a lot of electricity. Solar thermal technologies can heat your water as well as indoor spaces. Both technologies reduce Iowa’s use of fossil fuels like coal and natural gas while also creating jobs in the local economy.

However, there is a limited quantity of Iowa credits each year and they are issued on a first-come, first-serve basis. If you are interested in going solar, right now is the time to act.

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2 responses to “Iowa’s new solar tax credits are ready for you

  1. Pingback: Postcard from Iowa: July | Iowa Environmental Council Blog

  2. Brad Vander Linden

    Can you sell power back to grid? We have thousands of sf of roof area in our self storage developments that would make a great power generating resource. However, I think Iowa law only allows net metering — you can only get a credit on your utility bill for the electricity you use, but you can’t sell back to the grid as a power generator. I think there are some technical limitations on how you can transfer excess electricity back to the grid. Lots of capital costs to change the grid to allow this to happen, so it’s problematic. If you can only offset your electric use and can’t sell excess power back to the grid, it becomes more of hobby and a feel good thing for being green, rather than a valuable income stream.

    I would like know more about the regulatory and technical hurdles to selling power back to he grid — including any model legislative language you’ve seen in other states that has been proposed or used to change the law.in various states — and what kind of opposition it might have encountered from utility companies that might have to bear the capital cost of altering electrical grid infrastructure to allow excess electricity to sold back to the utility.

    The self storage industry in very interested in solar power if a way can be found to sell excess electricity back to the grid.

    Replacing coal-fired electric generating plants with roof-top solar wouldgo a long way towards slowing global warming, I would think.

    Brad Vander Linden