Switching to solar energy is a smart move for Iowans looking to reduce their impact on the environment and save money on their energy bills. Fortunately, there are several incentives available in 2024 and beyond to make the transition more affordable and appealing. Here’s a breakdown of the key solar incentives for Iowans:
1. Federal Tax Credit
One of the most significant incentives is the federal Residential Clean Energy Tax Credit, also known as the federal investment tax credit (ITC). This credit allows homeowners to deduct 30% of the cost of installing a solar energy system from their federal taxes. This 30% rate is available through the end of 2032. However, it will decrease to 26% in 2033 and further reduce in subsequent years before ending in 2035.
2. Net Metering
Net metering is another valuable incentive for solar users in Iowa. This policy allows homeowners to sell excess energy generated by their solar panels back to the grid. In return, they receive credits on their utility bills. This means that during times when your solar system produces more electricity than you use, you can offset the cost of power you draw from the grid when your system isn’t generating enough.
3. Sales Tax Exemption
Iowa offers a sales tax exemption on the purchase of solar energy systems. This exemption means that homeowners do not have to pay the state’s 6% sales tax on solar equipment, which can result in significant savings on the initial cost of the system.
4. Property Tax Exemption
Installing a solar energy system can increase the value of your home. In Iowa, homeowners are exempt from paying additional property taxes on the increased value of their home due to the installation of a solar system for the first five years. This exemption helps keep the overall cost of going solar lower by preventing an increase in property taxes while simultaneously increasing the future sale price of your home.
5. Solar Easement Laws
Solar easement laws in Iowa help protect your right to access sunlight for your solar panels. These laws ensure that homeowners can negotiate easements with neighbors to prevent obstructions that could block sunlight from reaching their solar panels. This is particularly important in areas where new construction or landscaping could impact solar access.
For Iowans considering the switch to solar energy, these incentives make it an attractive and financially viable option. The combination of federal tax credits, net metering, sales tax exemptions, property tax exemptions, and solar easement laws provides substantial support for homeowners looking to invest in renewable energy. According to EnergySage.com The average Iowa solar shopper will save an estimated $4,724 on solar panels through the use of rebates and incentives.
