Iowa Solar Power Facts in 2024

Did you know that a solar power system adds value to your home? Solar panels increase home value with each kW of generation capacity added in addition to lowering your energy bills. If you are thinking about a solar installation, now is the right time. Let’s read on and see how to apply property tax exemption, federal ITC, and other great incentives all the while saving money and boosting property value. 

Iowa Solar Energy Data

Solar energy has made significant progress in Iowa over the past few years, and the state has become a notable player in the industry. In 2022, the cost for a 5 kW solar panel system in Iowa ranged from $14,500 to $19,700. Despite the initial investment, the net 20-year savings from this investment can reach up to $78,000, with a payback period of 11 to 15 years. This payback period is greatly impacted by the offset of the electricity bill, which can range from 70 to 100%.

As of 2022, Iowa had 650 MW of solar installed, enough to power 81,000 homes and account for 0.9% of the state’s total electricity consumption. In terms of employment, the solar industry created 892 jobs in the state in 2021. With 72 solar companies operating in Iowa, including 12 manufacturers, 30 installers/developers, and 30 others, the total solar investment in the state exceeds $850 million. Over the last decade, the cost of solar in Iowa has decreased by 52%.

In terms of growth projection, Iowa is expected to install 1,315 MW of solar in the next five years, ranking 34th in the nation. With the continued fall of prices and the increase of installations, Iowa is poised to play an even larger role in the renewable energy market. This information highlights the optimistic outlook for solar energy in the state and serves as a gentle nudge for individuals and businesses to consider making the switch to clean, renewable energy sources.

Source: SEIA Iowa

Notable Solar Installations in Iowa 

Solar energy has been rapidly expanding in Iowa, thanks in part to the state’s commitment to reducing its carbon footprint through the adoption of a renewable portfolio standard. Iowa is home to several notable solar installations that are helping to drive down electricity prices and promote a cleaner energy future:

• Wapello Solar – Developed by Clenera, this 128 MW project came online in 2021 and produces enough electricity to power 16,605 homes.
• Strawberry Point – This 1 MW photovoltaic project, completed in 2017, has enough electric capacity to power more than 154 homes.
• Arbor Hill Solar – Located in Greenfield, this 31.8 MW solar project was completed by EDF Renewables in 2022 and has enough electric capacity to power more than 4,125 homes.

Average Cost of Solar Energy Systems

The average cost of a solar panel installation in Iowa ranges from $14,500 to $19,500, with a cost per watt ($/W) of $2.92 to $3.94. This places Iowa in the middle range compared to other states in terms of solar panel costs.

It’s important to consider the solar payback period when considering a solar panel system. This is the amount of time it will take for you to recover your initial investment through electricity savings from your solar system. The average solar payback period in Iowa is 13.5 years.

When it comes to paying for a solar panel system, there are several financial options available to help make it affordable. One common method is a cash purchase, which often results in the most long-term value for your money. Alternatively, you can consider solar loans or solar leases/PPAs to finance your solar energy system, if an upfront purchase isn’t right for you.

Iowa Solar Incentives, Rebates, and Tax Credits

In Iowa, the switch to solar power is made even more attractive with the federal solar investment tax credit, which can offer a significant discount on the cost of a solar energy system. In addition, with net metering in the state, homeowners can receive full retail rate credit for the surplus electricity they generate with their solar power system. Additionally, residents served by the Ames Electric Department can take advantage of a rebate program, and there are also personal tax credits and exemptions available for those who install a renewable energy system in their homes.

Federal Tax Credit (Federal ITC) 

The Federal Solar Tax Credit is a powerful financial incentive for homeowners and businesses in Iowa who want to switch to renewable energy. The credit applies to the cost of installing a solar energy system or solar power system, and can significantly reduce the overall cost of the project. 

If you install your photovoltaic system before the end of 2032, you can receive a credit equal to 30% of the total cost of your solar system, including equipment, labor, and permitting. This federal solar tax credit can greatly reduce the financial burden of switching to solar energy, making renewable energy a more accessible and affordable option for homeowners and businesses alike.

Net-metering 

Net metering is an option for those who have installed a solar panel system and want to receive credit for any excess energy produced by their system. This option is not available for those with off-grid properties. Net metering requires a utility company to monitor the amount of energy produced by the solar panel installation and the amount of energy consumed by the homeowner. 

Any surplus energy is credited towards future bills. This helps to increase the energy savings of the homeowner and is an important aspect of the solar industry. It is also worth mentioning that a solar battery can store excess energy for later use, further increasing the savings of the homeowner, especially if net metering is not available in your area. 

Solar Rebates 

In Iowa, there are limited rebates available for those who decide to install a solar power system. The availability of solar rebates depends on your location and the electric department you are served by. For instance, if you are served power by the Ames Electric Department, you may be eligible for a rebate of $300 per kilowatt (kW) of solar equipment installed, up to a maximum of $5,000. This means that if you have a 6-kW solar energy system installed, you could claim a rebate of $1,800.

To see if rebates are available for you, it’s best to speak directly with a local solar installer who can give you a customized estimate on the cost of your solar panels, including any available rebates. These rebates can significantly reduce the cost of your solar panels, leading to lower electric bills and increased energy savings from your solar power system. So, it’s worth exploring your options for solar rebates when considering a solar panel installation for your home.

Solar Tax Credit 

The Iowa Solar Tax Credit is a fantastic incentive for residents in the state who are interested in making the switch to renewable energy. It’s a great way to get a little extra help with the cost of your solar installation, especially since solar systems can be quite an investment.

Here’s how it works: Iowa offers a personal tax credit equal to 50% of the Federal Tax Credit. So, if you install a solar PV system, you’ll be eligible for a federal tax credit of 26% of the cost of your solar panels Iowa, and an additional credit from the state of 50% of that amount.

Let’s say you install a 6-kW solar energy system for $18,000, for example. You’ll be eligible for a federal tax credit of $4,680 (26% of $18,000). The state will offer you an additional tax credit of $2,340 (50% of the federal credit). That’s a total of $7,020 in tax credits, which is a pretty substantial sum!

To claim these credits, you’ll need to apply online by May 1st of the year after your solar installation is complete. Keep in mind that there is a $5 million cap on all tax credits in the state each year, so if you’re interested, be sure to apply early to avoid missing out. If you’re still on the fence about making the switch to solar power, this tax credit can definitely help make it a more attractive option. Talk to a solar installer to see how much you can save with the Iowa Solar Tax Credit, and start enjoying the benefits of renewable energy in no time!

Tax Exemptions

If you’re thinking about going solar in Iowa, you’ll be happy to know that the state offers a few tax exemptions that can help offset the cost of your solar panels. Firstly, you’ll be pleased to know that installing solar panels won’t increase your home or property taxes. In fact, Iowa offers a sales tax exemption for solar equipment, which can lower the upfront cost of your solar installation. 

This means that when you purchase your solar panels and other equipment, you won’t have to pay any sales tax on them. This can be significant savings, especially if you’re installing a larger solar PV system. So if you’re interested in lowering your carbon footprint while saving on your electric bill, going solar in Iowa with the help of these tax exemptions might be a great option for you!

• For all of the solar incentives in Iowa, please check for availability, because some of them are available on a first-come-first-serve basis

Top Solar Companies in Iowa

As there are dozens of companies that do solar in Iowa, it can be a headache going through all of them. For that reason, we did the hard work for you. Here is a list of the 10 top solar installers in the state of Iowa: 

ADT Solar

ADT Solar is a professional solar company that offers a range of solar power services, including design, installation, and maintenance. They work in Iowa and several other states across the US.

Atwood Energy Services

Atwood Energy Services is a leading solar company in Iowa that specializes in the design, installation, and maintenance of solar power systems. They have a proven track record of delivering top-notch results for their customers.

CB Solar

CB Solar is a trusted solar company in Iowa that specializes in the design and installation of solar power systems. They have a commitment to using top-quality products and delivering exceptional customer service.

Energy Consultants Group, LLC

This company is focused on providing top-notch solar power solutions to homeowners and businesses in Iowa. They have extensive experience in the industry and aim to make solar accessible to everyone.

GWA Solar

GWA Solar is a professional solar company that provides high-quality solar power solutions to customers in Iowa. They have a team of experienced professionals who are dedicated to delivering the best possible results.

Olson Solar Energy

This company is a full-service renewable energy firm that provides solar power solutions to customers in Iowa. They are dedicated to helping their customers save money and reduce their carbon footprint.

Purelight Power

This company is a full-service renewable energy firm that specializes in the design and installation of solar power systems. It operates in Iowa and several other states across the US.

RJ Construction

This company is a full-service construction firm that provides solar power solutions to customers in Iowa. They have a team of experts who are dedicated to delivering high-quality results at a fair price.

Simple Solar LLC

Simple Solar is a professional solar company that provides top-notch solar power solutions to customers in Iowa. They have a commitment to providing affordable, accessible, and sustainable energy.

Factors to Consider Before Investing in Solar

Before investing in a solar power system, it’s important to take into account several factors that can impact the cost, efficiency, and overall performance of your solar panels. Some of these factors include the cost and financing options available, the quality of the panels and inverters, site characteristics such as orientation, tilt, and shading, local regulations and laws, and potential impact on your insurance costs. It’s also important to consider the cost of electricity in your area and the long-term savings that a solar power system can provide. It’s best to do your research and talk to a solar company to determine the best option for your specific needs and energy use.

Cash Becomes Illiquid

When you invest money into a solar panel system, it becomes very difficult to access that money in case of an emergency or a need for cash. The money invested into the solar system is considered illiquid, meaning it can’t be easily converted into cash. To access the money again, you would need to take out a home equity line of credit (HELOC).

It’s important to keep in mind that investing in a solar panel system is a long-term investment, and it’s not like taking out a loan or leasing the panels from solar installers. Solar loans and leases can help reduce the upfront cost of a solar panel system, but you’ll still need to pay for the installments, regardless of how much energy your system generates. So, before making a decision to invest in solar, it’s important to ensure that you have enough liquid assets to cover any emergencies or unexpected expenses.

Solar Regulation 

It’s important to keep in mind that solar regulations can impact your investment in a solar system. This can include rules and laws surrounding the installation of solar panels, electric bills, and the use of solar power in Iowa.

For example, a bill was recently circulated in the Iowa house and senate that would have imposed an annual charge of $300 on homeowners with solar panels. Although the bill did not become law, this is a reminder that solar regulations can change and it’s important to stay informed about the latest developments in the Iowa solar energy landscape.

If you’re considering installing solar panels, it’s important to keep in mind that changes in regulations could impact the amount of money you save on your electric bill and the return on your investment in a new solar energy system. Make sure to research the current solar regulations in Iowa and speak with solar installers about how these regulations could impact your specific situation.

Financing as Opposed to Paying Outright 

When it comes to financing a solar power system, it’s important to consider the trade-off between the convenience of monthly payments and the potential cost savings of paying in full with cash. Some Iowa homeowners opt for solar leases or power purchase agreements (PPAs) in order to avoid the upfront cost of a solar installation. However, this financing option often comes with a higher long-term cost, as you will be paying more for the electricity generated by the solar panels over time. On the other hand, paying for the solar panels in full with cash can lead to greater savings in the long run, as you will not be subject to monthly payments or interest charges.

In fact, financing a solar system can reduce the effective return on your investment, as you will be paying more for the electricity generated by the panels over time. This is due to the fact that with financing, you will be paying for both the cost of the panels and the interest on the loan. In comparison, if you pay in full with cash, you will only be paying for the cost of the panels and not incurring any additional costs.

According to the national average, Iowa homeowners can expect their electricity rates to increase by around 2.5% annually. By installing a new solar energy system and producing your own electricity, you can potentially offset these rising costs and save money on your electric bill in the long run. The cost of solar panels has decreased dramatically in recent years, making it more affordable for homeowners to go solar and reduce their dependence on traditional electricity sources. With careful consideration of the costs and benefits, investing in a solar power system can be a smart choice for many Iowa homeowners.

The Quality of the Solar Panels 

When it comes to choosing the right solar panels for your solar power system, there are a few factors to consider. Solar panel’s cost, efficiency, and the type of technology they use are all important things to think about.

There are three main types of solar panels available on the market today: monocrystalline, polycrystalline, and thin-film. Monocrystalline solar panels are considered the most efficient and therefore the most expensive of the three. Polycrystalline panels are a more affordable option and offer a good balance between cost and efficiency. Thin-film solar panels are the most affordable option, but they are also the least efficient.

When installing solar panels in Iowa, it’s also important to consider the climate and the roof size. In warmer regions down South, you will need fewer panels to generate the same amount of electricity as you would need more panels in the North. This is because the sun is stronger in warmer regions, and therefore you can generate more energy per panel.

Additionally, there are different kinds of inverters available for solar power systems. String inverters and micro inverters are the two main types of inverters used today. Micro inverters are typically more expensive but offer the advantage of being able to track and monitor the energy output of each panel individually. String inverters, on the other hand, offer a more affordable option and are a better choice for larger solar power systems.

It’s also important to consider the cost and efficiency of solar panels when choosing a solar company to install your solar panels. A good solar company will work with you to determine the best solar panels and inverter for your specific needs, taking into account your energy use and roof size. By choosing a quality solar panel and installation company, you can be sure that your solar power system will add value to your home and be a reliable renewable energy source for years to come. Don’t forget that there is also a tax credit available for homeowners who install solar panels in Iowa, making it even more affordable to go solar.

The Site Characteristics 

Site characteristics play a crucial role in the effectiveness of a solar system. The orientation and tilt of a roof, as well as any nearby trees, buildings, or other obstructions, all have the potential to impact the amount of energy produced by a solar panel system.

Solar panels are typically installed facing south, as this is the direction that receives the most direct sunlight throughout the day. This will help ensure maximum energy production. The tilt of the roof can also play a role in energy production. Generally, the steeper the tilt, the more energy will be produced.

However, nearby trees, buildings, or other obstructions can cause shading and reduce the amount of energy produced by the solar panels. The presence of these obstructions should be considered when planning the installation of a solar panel system.

Furthermore, it is important to note that solar panels work best in warmer regions. In states like Iowa, more panels may be needed to generate the same amount of electricity as fewer panels could down south. This is because panels are less efficient in colder temperatures.

By considering these site characteristics, Iowa homeowners can help to optimize their solar system and maximize the energy produced by their panels. This will help to reduce electricity costs, and even potentially increase the value of their property. Installing a solar system is not only a wise investment, but it is also a great way to support a renewable energy source and do your part in reducing your carbon footprint.

FAQs

Conclusion

In conclusion, going solar in the State of Iowa is a great solution for all homeowners. A rich array of solar arrays and other forms of solar incentives can help offset a significant portion of the initial cost, and you will be able to enjoy a sales tax exemption as well. Iowa residents can benefit from a solar array, by reducing their carbon emissions, powering their home and EV and even by selling excess electricity back to the grid. 

Updated on 03-07-23