Iowa solar 101: must read before you buy solar panels
Benefit from a PV system
4.65 hours of peak sunlight
Iowa gets enough sunlight to help a PV system pay for your electricity bills or at least make a significant cut
3 years payback period
Sell the excess electricity to the utility grid and reduce over 75% of your electricity bill
Save money with Net Metering
Don’t waste a single watt-hour: the energy you can’t use yourself will be exported to the grid, bringing you extra profit
Reduce the cost of your system by 26%
Get a quarter of the PV system cost off your taxes with the Federal Solar Tax Credit
Freeze your property tax for 5 years
The market value added to your property due to acquiring a PV system will be exempt from the state’s property tax
Iowa #34 in the US
- $49 072/year Average savings from going solar in Iowa
- 10 404 kWh/year Average electricity consumption of a FL household
- 7 452 kWh/year AC energy output of a 5 kW solar system installed in Iowa
- 12 ¢ /kWh The cost of electricity today in Iowa
- 25 ¢ /kWh The forecast average utility price over the next 25 years
- $0.64/WAverage gross price of a solar power system as of May 2021
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Solar laws, incentives and rebates in Iowa you need to know
Return 26% of your PV system cost with Federal Solar Tax Credit
The Solar Investment Tax Credit (ITC) allows homeowners to claim 26% of the cost of their solar power system installed until 2022 as an income tax deduction. For example, if your solar system costs $20,000, you are eligible for $5,200 (26% of the total gross cost) in tax credit. Solar system cost comprises not only the money spent on solar panels, but also freight shipping costs, professional installer fees, tools bought or rented and so on. 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.