Iowa solar 101: must read before you buy solar panels

Last updated 12.01.21

Iowa State 46 solar panels available

  • $2.13 / W Average gross price of a solar power system as of October 2023
  • 9 years Average system payback period
  • $44 410 Average savings from going solar in Iowa
  • 7 ¢ / kWh Levelized cost of solar energy
  • 5.7 kW Recommended system size

Benefit from a PV system
in Iowa

Solar panels in Iowa

Iowa #34 in the US
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I am new to using solar and had a great experience with A1Solar. I ordered 6 pcs of Q Cells 400W solar panels from them and delivery was fast / customer service was great! I look forward to buying from them again in the future.
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Solar laws, incentives and rebates in Iowa you need to know

Save 30% of your PV system cost with Federal Solar Tax Credit

The US government wants more people to go solar: it’s a modern and green way of getting energy. This is why the Solar Investment Tax Credit (ITC) program was developed. It allows American citizens to claim 30% of the cost of their installation as an income tax deduction. The cost here is not only solar panels, but also shipping, installation expenses and more. For example, if your system overall made you spend $10,000, the government returns you $3,000. To claim the ITC, complete all the necessary forms and submit them when filing your taxes.

Save up to $5,000 with Iowa’s individual tax credit

This program allows you to claim 50% of the Federal Solar Tax Credit, meaning it is equal to 13% for PV systems installed in 2020-2022. In total, you can claim up to $5,000 for each separate solar setup. If you install a system on each of your properties, you are eligible for as many tax credits. However, there’s a $5,000,000 cumulative limit for all participants and the credits are issued on a first-come, first-serve basis. Hence, it makes sense to fill out the form as soon as possible. The Solar Energy Systems Tax Credit is compatible with all other credits and incentives. It means that, together with the federal 26% ITC, you can recover almost 40% of the system’s cost! Before applying, make sure your system is complete and operating.

Sell excess electricity with Net Metering Program

Solar laws in Iowa allow customers of all investor-owned utilities to join Net Metering programs. Participation for electric cooperatives and municipal utilities is voluntary, but strongly encouraged. In total, the program is available to almost 90% of residential customers in Iowa. Hence, households have an option to send the excess electricity back to the grid instead of storing it with battery banks. When you sell your solar power to the utility, you receive credits that can be used to offset your next bills. In Iowa, their value is equal to full retail electricity price. If you accumulate any unused credits, they will be purchased from you annually at the avoided cost rate.

Buy solar equipment tax free and save 6%

In Iowa, solar equipment is exempt from the state’s sales tax, meaning these additional 6% stay in your pocket. Solar equipment includes any device used to convert sunlight into energy. Anything needed to prepare the energy for storage or put it to use is also subject to the exemption. Thus, everything you need to build a PV system of any scale can be bought tax free in Iowa.

Freeze your property tax with Property Tax Exemption for Renewable Energy Systems

A solar PV system installed in a home increases its value by about 4%, says 2019 Zillow report. In Iowa you don't have to pay extra taxes during the first few years. According to the state laws, 100% of the value added as a result of a solar PV system installation shall be exempt from taxation for 5 full assessment years.

Protect your solar panels from shade with Solar Easements

A solar easement contract is a written agreement between you and another party, for example, your neighbor. This type of contract helps to ensure a stable supply of sunlight for your PV system for years to come. A solar easement protects your panels from potential impairments, such as vegetation and structures. It is voluntary and must contain the description of protected space, a list of restrictions and a clause on revision or termination of the contract. Once signed, it is tied to the land, not the owner. Any such agreement must be created in written form and must meet the general requirements for legal contracts. If a solar easement can’t be obtained in a voluntary manner, the issue may be taken to the solar access regulatory board or to the district court.

Install your solar panels in Iowa with no worries

It is legal to install solar panels on your house in Iowa. However, there is no statewide legislation that makes it unlawful to restrict installation of solar PV systems. Note that municipalities are permitted to enact ordinances which prevent homeowners associations (HOAs) from unreasonably restricting the use of solar panels. Still, it’s best to contact your HOA or study its declaration and rules to find more information. You may have to submit your project for approval before changing the exterior of your house. The board may ask you to hide the system from view, reduce the number of panels or just reject your proposal. 

Solar panels help Iowa survive severe storms

Iowa is prone to major floods, winter storms and tornadoes. These events invariably lead to damages, disrupting the work of both generating plants and power lines. Your PV modules are well equipped to meet most hurricanes and hail, and that’s good news in case of a power outage. In 2020, a storm left more than 28,000 Iowans without electricity. In some cases, it took more than a week to restore it. The Environmental Protection Agency warns that extreme weather events will become more frequent and powerful, adding to the list of reasons to opt for solar.

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