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How to Save Money on Solar Panels In Iowa

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How to Save Money on Solar Panels In Iowa

Iowa had over 7,000MW of clean and renewable energy in 2017. Nevertheless, the Hawk Eye state only has 105MW of solar panels in Iowa. While it may appear the state isn’t keen to support Solar technology, solar installation is affordable.

Most homeowners haven’t made the switch, but you can save thousands of dollars on your electricity with a solar panels system. With plenty of opportunities to save, you can significantly reduce the cost of installing an array. Here’s a breakdown of Iowa’s incentives for renewable energy.

Ways to Save Money on Solar Panels in Iowa

The Hawkeye State has decent rates on solar equipment and good sunshine, making it an ideal place to install a system. While Iowa has more incentives for wind power, homeowners who switch to solar can save thousands of dollars. These benefits come in three forms:

  • Federal returns
  • State credits/rebates
  • Government regulations

Iowa has a few renewable standards that support alternative energy, but they’re not enough to mandate municipal action. Still, the Hawkeye State offers benefits in the form of credits, tax exemptions, and more. Let’s explore these in more detail.

Solar Panels in Iowa: Federal Incentive

The federal solar tax credit is available to Iowans who qualify for the program. With it, homeowners can receive a 30% credit on federal taxes for all solar array purchases. This includes equipment, labor, and sales taxes. Those taking advantage of the incentive can see upwards of $4,500 or more off their installation costs.

However, the program comes with a few prerequisites, which include:

  • Owning the system outright
  • Living at the home at which the system is installed
  • Installing new equipment

The benefit offers 30% off until 2032, when it tapers off to 26% in 2033 and 22% in 2034. The program ends the following year unless it’s extended.

Iowa’s State Credits and Rebates

One beneficial incentive for investing in solar panels in Iowa is the state tax credit. This program works similarly to the federal incentive in that it offers a return on state taxes. With this program, homeowners receive 50% of the federal return. 

For example, if Iowans receive 4,500 in returns on their federal solar tax incentive, they’ll also receive $2,250 on their state incentive. That’s already $6,750 off an installation. 

Additionally, Iowa has a pretty good net metering policy. This regulation mandates utility companies to pay residents for excess solar energy each month. It typically comes in the form of a credit that rolls over to the next month. Municipalities do this in Idaho, although they don’t offer a monetary rebate at the end of the year like in some states. Still, money off electricity bills helps.

Depending on where you live, you might qualify for a rebate for your installation. Iowans getting electricity from Ames Electric Department can receive money back for $300 per kilowatt up to $5,000. However, most of the rebate pool is spent, meaning new customers might have to wait until Iowa updates its energy goals.

Solar Panels in Iowa: Government Regulations

A lot of the Hawkeye State’s benefits stem from its renewable portfolio standards (RPS). A set of standard goals guide the state toward cleaner energy in the future. We use the status of Iowa’s RPS to determine if it plans to invest further in solar energy. 

While Iowa was the first state to have official standards, they haven’t been updated since 1987. As the Hawkeye State has met its goal of 105MW (it has more than 7,000MW of wind power) of renewable energy, there’s no municipal push for more infrastructure.

Still, state-level regulations help reduce the cost of an array. Homeowners that install solar panels won’t have to pay extra taxes when their home value goes up. Additionally, Iowans pay no sales tax for any solar-related equipment. This can reduce the price by nearly 7% upfront and even more throughout the arrays’ lifetime.

Should Iowans Lease Solar?

Monocrystalline vs Polycrystalline
Iowa has an average of 4.55 daily peak sun hours, just enough for solar panels to generate clean energy.

Leasing solar panels only works in states with a primary solar focus. Although homeowners won’t have to worry about maintenance or installation costs, the lease payments hardly offset electricity rates. Additionally, this option disqualifies the system from incentives, including the federal solar tax credit. However, none applies to Iowans because the state does not allow third-party ownership.

Solar Panels in Iowa: Incentive Summary

BenefitAccessibility
Federal Tax Incentive30% credit
Iowa Tax Credits / Rebates50% of federal solar tax credit / no longer funded
Net MeteringMonthly credits, no yearly payout
Renewable Portfolio Standard105MW renewable energy
Property Tax ExemptionYes
Sales Tax ExemptionYes
Performance Payment ProgramNone

How to Save Money on Solar Panels in Iowa: Further Reading

While the Hawkeye State met its renewable energy goals years ago, homeowners can still find savings on solar panels in Iowa. Good sunlight and affordable equipment rates make the switch worth it. For more on Iowa’s technology, read these articles below.

Frequently Asked Questions

Do you actually save money going solar in Iowa?

With decent sunlight and affordable equipment, homeowners could see reasonable savings on utilities. The average household could earn back nearly $21,000 or more with a solar panel system.

How long does it take for solar panels to pay for themselves in Iowa?

With an average annual electricity bill of $1,439.76, Iowans could pay off a 6kW system in about 10.5 years.

How much do solar panels cost in Iowa?

In the Hawkeye State, homeowners can expect to pay about $2.53 per watt. This equals about $15,120 for a 6kW system.

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