Local Government Solar Resources
This page is meant to consolidate resources relevant to local governments in Iowa considering solar PV projects. Many of these resources are also relevant to other forms of renewable energy, and also to others interested in solar, especially other non-taxable entities. Winneshiek Energy District welcomes feedback, and suggestions. If your local government has installed renewable energy and is willing to be listed and contacted by others, please send us your information. We anticipate this page will grow, and are considering new features including an interactive map.
There is much to consider, but Don't Be Overwhelmed! Solar PV can be a solid financial decision for your taxpayers, a critical kick-starter to a local solar market, and an important leadership statement. Establish a key point person within your entity, define a work team (facilities, financial, Board rep, etc), evaluate siting and ownership options, and use the solar contractor/developer base and your peer local governments as resources.
The Iowa Utilities Board has produced an Informational Guide for On-Site Generation to help customers consider options. It is a good start but don't be overwhelmed.
The International City/County Management Association's solar resource page, and especially their collaborative report Guide to Implementing Solar PV for Local Governments is useful.
The national Solar Outreach Partnership supported by DOE is a wealth of resources, including access to technical assistance from peers and Department of Energy experts.
The Institute for Local Self-Reliance runs an excellent program on local energy democracy. Recent reports very relevant to local government include the Public Rooftop Revolution, and the four-part Beyond Utility 2.0, which provides an excellent foundation for understanding local energy opportunities in today's energy world.
Financial Incentives Local governments may own systems outright, or choose to take advantage of tax incentives via third party ownership (covered in the next section). This is not an exhaustive list, but covers the most important and broadly applicable incentives.
DSIRE is the most comprehensive source of incentives and policy that support energy efficiency and renewable energy nationwide, and this is the Iowa page. All the opportunities listed below can also be found here.
Net Energy Metering allows solar owners to feed surplus power to the grid and receive one-to-one kWh credit. It is critical to solar PV economics and is under attack by the investor-owned utilities in Iowa as it is in much of the country (see the policy section below).
The 30% Federal Business Energy Investment Tax Credit can be claimed by third party owners and (partially) passed along to customers, but drops down to 10% on January 1st, 2017!
Iowa has a solar system investment tax credit (DSIRE page here) currently worth 60% of the federal business tax credit (18% of total costs) up to a maximum of $20,000/project, and a production tax credit worth $0.015/kWh for 10 years (cannot be used together). Both were expanded in the 2015 legislative session and can be used by third party developers (with partial savings passed to the customer) but may still be oversubscribed.
Solar systems are eligible for depreciation (via the Modified Accelerated Cost Recovery System, or MACRS) of business property cost basis, which is another very significant financial incentive available to taxable entities and thus, to local governments only via third party ownership. If you work with a developer, have them explain how depreciation and tax credits are resulting in lower installed costs to you. The IRS Publication 946 is the authoritative guide, while the SEIA and this legal blog provide good overviews.
Iowa's Alternate Energy Revolving Loan Program is run by the Iowa Energy Center and offers 0% financing on up to 50% of project cost (up to one million).
The USDA Rural Energy For America Program offers competitive grants (up to 25%) and guaranteed loans on renewable energy systems, which a third party owner/developer could apply for.
Third Party Ownership Third party power purchase agreements (3P-PPA) are mechanisms for 1) non-taxable entities to gain at least some of the benefits of tax incentives, and 2) any customer to purchase solar power directly from an on-site system without the up-front investment necessary to build and own the system. In 2014 the Iowa Supreme Court declared the PPA model a legal and viable option in Iowa, though the investor-owned utilities are current refusing net metering to PPA customers, an issue currently in front of the Iowa Utilities Board.
The Interstate Renewable Energy Council has recently produced an excellent toolkit to help local governments with solar financing, focused on the PPA model.
The US Department of Energy National Renewable Energy Lab has produced a set of standard contracts for power purchase agreements.
Other public entities that have executed 3P-PPA agreements in Iowa will likely be some of the best resources, and the actual PPA agreements are likely to be public documents as well.
Examples of Public Entity Solar in Iowa (Have a solar system? Send us your details and especially contact information.)
The City of Dubuque was the first to attempt a 3P-PPA with Eagle Point Solar, which was challenged by Alliant Energy, and resulted in the Iowa Supreme Court decision validating 3P-PPA use in Iowa: contact City Manager.
Luther College (not a public entity but a non-taxable entity faced with similar challenges) installed a 280KW array in 2012 under a lease agreement, and is currently installing an additional roughly 800KW under a 3P-PPA agreement: contact Jim Martin-Schramm.
Iowa Solar PPA Developers (Are you a solar developer in Iowa offering 3P-PPA services to local governments and other entities? Contact us with details.) Note, many electrical firms are now also solar installers, and some are considering entering the "developer" space and offering 3P-PPA structures. It is a field in flux.
Eagle Point Solar, Dubuque
Moxie Solar, North Liberty
Blue Sky Solar, Dubuque
SiteGen Solar, Cedar Rapids
Changes to net metering and other "distributed generation" issues are being considered by the Iowa Utilities Board open docket NOI-2014-0001. Our web page provides background and comment guidance for the most recent round of questions. We encourage all entities to submit comments as long as the docket is open, even if interim deadlines appear to have passed.
Freeing the Grid grades states on their net metering and interconnection policies, and provides context for where Iowa fits relative to our neighbors and the nation.
Utilities claim that solar customers, by reducing energy purchases, are not paying their fair share of infrastructure costs and thus requiring cross-subsidization by non-solar customers. This fails to recognize, however, that distributed solar also provides a great many benefits (or subsidies) to the utility and grid, including contributing power during periods of peak demand, reducing transmission losses, avoiding utility investment in new generation, and frequency and voltage regulation. Determining this true "Value of Solar" (VOS) may represent a future alternative to net metering, and a VOS is already in use in Minnesota, in Austin, TX, and under study across the country. A Feed-In-Tariff is another approach to placing specific value on solar (and other renewable energy) generation, and establishing certainty via long-term contracts. It is the most successful solar incentive globally, and is worth considering in Iowa.
Community or Shared Solar is the fastest growing segment of the solar industry. Considering fewer than half of utility customers have an adequate site for "behind-the-meter" solar PV, shared offsite arrays can allow everyone the opportunity to participate. Sharedrenewables.org gives a snapshot of state-level policy, the Interstate Renewable Energy Council has developed model rules for shared renewables for states and regulatory bodies to follow, and our neighbors to the north have the most active program in the country. The time is right for shared renewable legislation in Iowa.