All federal benefits apply to entities in Iowa.

Iowa no longer offers any new state-level tax credits for solar installations. The previous Solar Energy System Tax Credit for business installations expired for projects beginning construction after December 31, 2021. Applications for those projects had to be submitted by May 1 following the installation year.

Iowa continues to provide a property tax exemption for the added value of solar energy systems. Installing a solar system will not increase your property’s assessed value for tax purposes for the first five years after installation.

Sales tax exemptions still apply to solar panels and related equipment in Iowa, reducing upfront costs by exempting these materials from state sales tax.

Utility-based incentives in Iowa vary widely by provider. Some local utilities may offer rebates, performance incentives, or other financial programs for solar installations. It’s recommended to check directly with your local utility for specific offerings.

Under the Inflation Reduction Act (IRA) of 2022, tax-exempt organizations such as nonprofits are now eligible to receive a direct payment equal to 30% of their solar installation cost, effectively mirroring the federal Investment Tax Credit (ITC). This provision significantly enhances the financial benefits available to nonprofits investing in solar energy.

While Iowa no longer provides new state tax credits for solar projects, the combination of federal incentives, state tax exemptions, active grant programs, and utility-level incentives ensures solar remains a financially viable option for businesses, nonprofits, and residents alike.