The Iowa Utilities Board, with input from stakeholders and utility providers, has recently developed a good informational guide for individuals to use as they consider installing solar and on-site energy production. It's a very comprehensive guide, which is great, but don't let it overwhelm you! Here's the link to the IUB Informational Guide for On-Site Generation. The most comprehensive source of information for all energy efficiency and renewable energy incentives is the DSIRE web page. The Iowa state incentives are summarized here, and federal incentives are summarized here. Another good source for energy incentives is the Department of Energy's "savings" page.
For tax incentives specific to solar, see DSIRE's pages: Federal Personal tax credit, Federal Commercial tax credit, Iowa personal solar tax credit, and Iowa Corporate Solar tax credit. Also see the Iowa Department of Revenue's page for more about Iowa's solar tax credit, and for an application: Iowa tax credit info and application.
To fully understand what incentives are available and how they interact will take research, time and moving through the process. We can help with a solar site assessment and consultation - submit the form at the bottom of the page - and we will provide an overview here.
NET METERING at it's most basic level just says you can build a solar photovoltaic system and connect it to the grid, and when you're producing more than you're using the utility needs to pay you for that surplus. A few years back, the utility would likely pay you "avoided cost" - generally less than half of your retail rate. Now, all Winneshiek County utility customers should be eligible for net metering with surplus production credited to your account, which essentially gives you retail rate. This is a major financial benefit to solar projects. It doesn't help you with up-front costs, but it certainly makes the power you're generating more valuable over time.
TAX CREDITS are available to those with tax liability, including most (but not all) residential, agricultural, and commercial/industrial entities. Governments and non-profits generally cannot take advantage of these, though see the note below for exceptions and future changes. The federal tax credit is 30% of the system cost, and the Iowa tax credit is half the federal credit, or 15% of system costs. The DSIRE Iowa and federal solar pages above explain these credits, and more information is available from the Tax Incentives Assistance Project, the Alliance to Save Energy, and the Energy Star web page.
ACCELERATED DEPRECIATION and 50% FIRST-YEAR BONUS DEPRECIATION (through 2013 only) is another very significant financial benefit for commercial projects, and explained further on the applicable DSIRE page.
AND THERE'S MORE
- for Iowa property and equipment tax exemptions and low-interest finance programs, see the DSIRE Iowa Solar page
- for federal renewable energy grant and loan options see the DSIRE federal solar page
- note that when combining incentives you cannot receive "double benefit": for example if you receive the Alliant solar rebate as a homeowner and do not count it as taxable income, you must reduce the basis for your federal/state tax credit by the amount of the rebate prior to calculating the tax credits. Discuss this with your accountant or tax consultant.
- note that the emissions reductions associated with renewable energy do not currently have a value in Iowa, but they may in the future - they're called solar renewable energy credits (SRECs)
- special note for nontaxable entities: Power Purchase Agreements (PPA) are not currently legal in Iowa but it is possible they will become legal in 2013 or 2014, and if so they will provide a mechanism for entities without tax liability to take advantage of the tax credits