Governor Branstad today signed Senate File 2340, a key tax incentive bill for solar energy. The law triples the size of Iowa’s successful solar tax incentive program and makes additional improvements to the program. The legislation received wide bipartisan support at the statehouse, with the Iowa Senate passing it with a unanimous vote of 46-0 and the Iowa House passing it with a vote of 88-4. The Iowa solar tax incentive matches a portion of an existing federal tax incentive for solar thermal and solar photovoltaic (PV) energy.
Senate File 2340 increases the annual cap available for solar tax credits from $1.5M to $4.5M. As solar energy grows in Iowa, demand for the tax credits exceeded the cap in 2013 by almost $1M, according to the latest information available from the Iowa Department of Revenue. Increasing the cap to $4.5M will help ensure that any Iowa taxpayer that installs solar can benefit from the Iowa solar tax incentive.
The legislation also does the following to improve the solar tax incentive program:
Allows taxpayers to claim multiple credits in a single year for multiple solar installations. This is already allowed under the federal program and will, for example, help businesses install solar at multiple business locations in a single year.
Increases the cap for residential tax credits from $3,000 to $5,000 and for business tax credits from $15,000 to $20,000.
Increases the Iowa credit from 50% of the federal credit to 60% of the federal credit.
Reserves a portion of the annual cap for residential tax credits.
Allows any unclaimed credits in a given year to roll over and be available in subsequent years.
The legislation promises to boost solar installations across Iowa. The current tax credit cap of $1.5M supported approximately 2-3 megawatts (MW) of solar PV in a given year and supported installations in 59 Iowa counties. Increasing the cap to $4.5M could boost that to 8 MW – or more – annually.
In addition to SF 2340, Gov. Branstad also signed an important bill, SF 2343, to extend production tax credits for wind and improve a pilot tax credit for combined heat and power.
More information about solar energy in Iowa is available here.
Update: In an exciting series of events, SF2340 passed both the Iowa House and Senate on April 24 and 25, and both chambers agreed to triple the credit to a cap of $4.5 million annually. The bill is now in the hands of the Governor for signature.
Our previous story begins below:
Iowa is already a leader in wind energy and can use the same road map to become a leader in solar energy as well, said Governor Terry Branstad, addressing solar industry leaders April 9 in the statehouse rotunda.
“I see tremendous potential for growth in solar energy as I do in other renewable energy items in our state,” the Governor said, noting that he and his staff are closely watching SF2340, a bill to expand Iowa’s solar tax credit pending in the legislature and are “hopeful” about its prospects.
The Governor made his remarks alongside Secretary of Agriculture Bill Northey during Iowa Solar Day, an annual event sponsored by Iowa’s Solar Energy Trade Association, ISETA.
The Governor made his remarks as solar energy continues to show strong growth in Iowa, generating strong interest from electric customers around the state. Secretary Northey and other lawmakers had the opportunity to see that growth up close on a tour of farm and rural solar installations held in Washington County on March 21. Watch coverage of the tour from KGAN-TV in Cedar Rapids to learn how solar energy benefits farmers.
At the statehouse Wednesday, Secretary Northey also expressed support for expanding Iowa’s tax credit and reflected on his conversations with farmers in Washington County.
“All of them are excited about [solar],” he said. “It’s working the way they wanted it to work; they’re seeing the numbers they thought they wanted to see.”
Tour participants gather in front of a 17 kW array at Paul Reed’s farm in Washington County. From left to right: Ken Reed, Paul Reed, Unidentified, Rep. Sally Stutsman, Rep. Dave Maxwell, Rep. Curtis Hanson, Tim Dwight, iPower, Rep. Jarad Klein, Denny Harding, Iowa Farm Bureau, Sec. of Agriculture Bill Northey, and Sen. Ken Rozenboom.
Many Iowa lawmakers are taking note of solar energy’s promise in the state. The bill to triple Iowa’s solar energy tax credit, SF2340, passed the Iowa Senate unanimously on March 27.
Soon after, two Senators, Joe Bolkcom (D-Iowa City) and Mike Breitbach, (R-Strawberry Point), explained their support of the bill in a Des Moines Register op-ed:
“Clean local power is something all kinds of Iowans can agree on — families, farmers and businesspeople; rural residents and city dwellers; even Republicans and Democrats.” … “Iowans recognize the growing potential to save money while generating power where they live and work. Lawmakers are realizing they can help. Together, we can build a brighter energy future for Iowa — and a stronger economy as well.”
Governor Branstad (seated) held a ceremonial signing of the new solar tax credits in June 2012. Since then, demand for credits has surged.
Since Governor Branstad signed Iowa’s solar tax credit into law in 2012, $2.84 million through the program has supported 622 solar projects worth more than $24 million.
Demand for the tax credit has dramatically increased in the last year, more than doubling from 2012 to 2013, and exceeding the tax credit program’s cap by almost $700,000.
Strong demand for tax credits is just one piece of evidence that Iowa’s use of solar is taking off. Already, an Iowa Environmental Council analysis of utility records for our report Real Potential, Ready Today: Solar Energy in Iowa showed that the number of solar energy installations connected in Alliant and MidAmerican Energy’s service territories grew from fewer than ten in 2009 to more than 80 in 2012.
During the Iowa Senate’s debate on SF2340, Iowa Senator Rob Hogg (D-Cedar Rapids) told a story about just how much growth has occurred in the solar industry in a very short period of time. Six years ago, Hogg said, the largest Iowa array was a 7 kW array at the Prairiewoods Franciscan Spirituality Center in Hiawatha, Iowa. He described the industry’s growth since:
“Hundreds of businesses, farmers and homeowners across the state have systems that are 7 kilowatts or larger. Hundreds. The largest photovoltaic array in Iowa is at Luther College, in Senator Breitbach’s district, 280 kilowatts 40 times larger. And later this year, in Senator Greiner’s district, Farmers Electric Co-op is going to break ground on an 800 kilowatt unit, more than 100 times larger than what just less than six years ago was the largest array in our state.”
Increasing Iowa’s use of solar energy is an important part of boosting the state’s overall use of clean energy, yet even with favorable policy and continued growth in the industry, Iowa has tapped only a small part of solar energy’s potential for our state. In fact, the total amount of energy Iowa could produce from solar panels exceeds the state’s total energy use by more than 150 times over.
The Council’s energy program is focused on helping Iowa transition away from polluting sources of energy toward clean sources like wind and solar as quickly as possible. Doing this work, we often receive questions about just how much Iowa can rely on renewable energy sources like wind and solar.
This is actually a question that generates considerable debate among energy sector researchers. We have often referred people to a 2012 National Renewable Energy Laboratory (NREL) report that showed how America could receive 80% of its energy from renewable energy sources by 2050.
That study was important because it suggested renewable energy could provide reliable electricity at all hours of the day through all the seasons of the year with technology that is commercially available today.
But now, a Stanford University research team has gone even further, suggesting a pathway by which Iowa—and all 50 states—could receive 100% of our energy needs from just three sources: wind, water, and solar. Along with a new infographic summarizing the results, the team has begun to make its findings available through a nonprofit called The Solutions Project.
If you own or plan to own a renewable energy installation, your voice is especially important now.
Update [2/24]: Due to continued problems with its electronic filing system, the Iowa Utilities Board has extended the public comment period by one day. The board released a statement on the topic that read, in part: “Because of a recent fire in another state government building, the Board’s electronic filing system (EFS) has experienced some unscheduled down time. Therefore, the Board will extend the deadline for filing responses to February 26, 2014.”
Last month, the Iowa Utilities Board announced a “Notice of Inquiry” to gather information on distributed generation of renewable energy in Iowa. The notice of inquiry allows the Board to gather information, and evidence suggests some participants want to use this opportunity to dismantle or block important policies supporting distributed wind and solar energy in Iowa.
Iowa’s policy regarding distributed generation affects the state’s ability to lead in renewable energy and to reduce dependence on fossil fuels. For Iowans who have installed wind turbines or solar panels, or want to in the future, these policies govern your relationship with your electric utility and how you are compensated for energy you produce.
This inquiry is your opportunity to tell the Iowa Utilities Board you want take advantage of the substantial and largely untapped potential for solar and wind growth in our state. You can help build Iowa’s national leadership in renewable energy by submitting your comment to the Board today.
Already a national leader in renewable wind energy, Iowa also has the potential to be a leader in solar photovoltaic (PV) energy production, according to a new report by the Iowa Environmental Council. The amount of solar energy Iowa could reasonably produce ranks 16th in the nation, and improvements in solar technology along with years of falling prices are helping build momentum in the budding industry.
“Customers are excited about solar energy, and it is showing up in many diverse settings—at farms, business, universities, utilities, and at homes around the state,” said Nathaniel Baer, energy program director at the Iowa Environmental Council. “As interest in solar energy grows, we wanted to share an overview of the role this energy source can play in the mix of energy options Iowa has.”
The Council’s report, Real Potential, Ready Today: Solar Energy in Iowa, explains how in addition to providing useful energy, solar PV offers many other benefits: job creation, consumer savings, cleaner air and water, innovation and technology investment, and improved stability in the electric grid.
The Iowa Environmental Council is a coalition of organizations and individuals working to secure a safe, healthy environment and sustainable future for Iowa.
“I see tremendous potential for growth in solar energy as I do in other renewable energy items in our state,” the Governor said, noting that he and his staff are closely watching SF2340, a bill to expand Iowa’s solar tax credit pending in the legislature and are “hopeful” about its prospects.
Iowa Environmental Council Blog 