Action Alert: Honor Iowa’s Tax Credit Promise

Iowa Solar Homeowners: have you applied for Iowa’s residential solar system tax credit, and been waitlisted or denied?

  1. If you have a new system, be sure to apply for the tax credit on the Department of Revenue’s web site. (if you don’t apply and get on the waitlist, and then the legislature does allocate funds, you’ll be out of luck). The Department is currently issuing denial letters because the residential funds are gone, but they have assured us the waitlist will not be purged on January 1st. If the Legislature acts this coming session to fix the issue, all eligible applicants should be covered, but you must advocate.
  2. Read our full newsletter article for an explanation of the problem.
  3. Contact your legislator via phone and/or email. Tell them:
    1. You’re an Iowa homeowner on the solar tax credit waitlist
    2. Ask if they support appropriating budget funds to pay the credits for all homeowners on the waitlist
    3. Ask them to provide a link to a bill they’ve sponsored to do this, and to keep you updated on progress (if a legislator tells you they support something that’s good, but nothing happens without the work …)
  4. Contact Governor Reynolds’ office with the same information and request.
  5. Ask your contractor to reach out to your legislators and the Governor with the same request.
  6. Write a letter to the editor, or better yet, ask your local or regional paper to write a feature story about your situation.
  7. Be active on social media, promote traditional media stories, tag your legislators.
  8. Keep communication going with your legislators asking for progress, until a bill is passed.

The following is excerpted from our newsletter article. Read the full article here.

For years, Iowa homeowners have been told the state’s solar tax credit is available for solar systems installed through 2021. Now it appears the State of Iowa is about to break that promise.

The Iowa Department of Revenue’s Solar Energy System Tax Credit page says:

The Department estimates that for residential installation applications with a submission date of October 1, 2020, or later, the application and tax credit request will expire under Iowa law and the taxpayer will not receive an Iowa Solar Energy System Tax Credit.

That’s right, it looks like homeowners who invested in solar during the second half of 2020 and all of 2021 – believing the tax credit was available to them – are about to be hung out to dry. Because of a quirk in Iowa law, business solar owners will all receive their credit in full.

What is the magnitude of the broken promise? According the Revenue Department, in October 2021 the waitlist of homeowners expected to lose their credit included 1,262 applicants and totaled $4,020,144 (over $3,000 per applicant).

The fix is not rocket science: the Legislature needs to directly appropriate the money to make these residential solar owners whole, just as the waitlisted business solar owners will also be made whole.

According to Governor Reynolds’ office, the state ended fiscal year 2021 in June with a budget surplus of $1.238 billion. “Iowa is in a very strong financial position” said Reynolds, “We will continue to invest .. going forward to meet the needs of our citizens and our state.” Honoring the solar tax credit promise to homeowners, we suggest, would be a good place to start.

Even if the residential waitlist grows through 2021 to a $5-6 million shortfall, this would still represent less than one-half of one percent of the 2021 budget surplus.

If you’re on Iowa’s solar residential tax credit waitlist, or have installed solar in 2021 and have yet to apply … now is the time to speak up, because your promised tax credit is on the line. Tell your legislators and Governor to do the work, fix the waitlist, and honor the state’s promise.

Iowa Residential Solar System Tax Credit Waitlist Numbers By County, October 2021 (provided by Iowa Department of Revenue*)

County Number of Systems Total Credit Value Number of Systems (based on $3,186 average)
Johnson 101-200 $465,369 146
Allamakee 16-50 $52,225 16
Appanoose 1-5 $11,577 4
Benton 16-50 $104,523 33
Black Hawk 6-15 $44,511 14
Boone 6-15 $20,492 6
Bremer 6-15 $33,738 11
Buchanan 6-15 $25,002 8
Buena Vista 6-15 $28,035 9
Butler 1-5 $11,669 4
Carroll 1-5 $7,737 2
Cedar 16-50 $71,352 22
Cerro Gordo 6-15 $44,780 14
Cherokee 1-5 $11,332 4
Chickasaw 1-5 $4,290 1
Clay 1-5 $17,108 5
Clayton 16-50 $121,391 38
Clinton 16-50 $71,015 22
Dallas 16-50 $94,072 30
Davis 1-5 $2,563 1
Delaware 6-15 $24,727 8
Des Moines 6-15 $17,107 5
Dickinson 1-5 $7,969 3
Dubuque 51-100 $156,276 49
Emmet 1-5 $3,593 1
Fayette 16-50 $125,273 39
Floyd 1-5 $11,482 4
Greene 1-5 $3,315 1
Grundy 6-15 $43,284 14
Guthrie 1-5 $5,000 2
Hamilton 1-5 $3,998 1
Hancock 6-15 $29,876 9
Hardin 6-15 $20,324 6
Harrison 1-5 $5,000 2
Henry 6-15 $23,155 7
Howard 6-15 $33,969 11
Iowa 6-15 $36,207 11
Jackson 6-15 $39,333 12
Jasper 6-15 $55,456 17
Jefferson 6-15 $29,302 9
Jones 16-50 $81,108 25
Keokuk 6-15 $27,460 9
Kossuth 1-5 $5,967 2
Lee 16-50 $113,676 36
Linn 201-400 $706,750 222
Louisa 6-15 $38,881 12
Lucas 1-5 $3,679 1
Lyon 1-5 $5,000 2
Madison 1-5 $10,464 3
Mahaska 1-5 $2,409 1
Marion 6-15 $18,446 6
Marshall 6-15 $36,220 11
Mills 1-5 $10,225 3
Mitchell 1-5 $7,500 2
Muscatine 6-15 $44,653 14
O’Brien 1-5 $2,951 1
Osceola 1-5 $4,334 1
Page 1-5 $4,914 2
Palo Alto 1-5 $18,758 6
Polk 51-100 $208,074 65
Pottawattamie 6-15 $24,367 8
Poweshiek 6-15 $35,552 11
Ringgold 1-5 $4,180 1
Sac 1-5 $8,342 3
Scott 16-50 $157,674 49
Sioux 1-5 $3,010 1
Story 16-50 $69,012 22
Tama 6-15 $26,941 8
Taylor 1-5 $5,000 2
Union 6-15 $28,194 9
Van Buren 6-15 $32,014 10
Wapello 6-15 $31,779 10
Warren 16-50 $86,493 27
Washington 16-50 $70,994 22
Wayne 1-5 $8,999 3
Webster 1-5 $7,548 2
Winnebago 1-5 $5,997 2
Winneshiek 16-50 $115,304 36
Woodbury 1-5 $9,188 3
Worth 6-15 $16,040 5
Wright 1-5 $4,620 1
1262 $4,020,144 1262

*note, the IDR data provided included the first three columns; the actual number of systems/homeowners on the list (column four) is a derived calculation using the average statewide residential tax credit value of $3,186