Top 5 Solar Companies in iowa

As a state that is already well-versed in renewable energy sources — the state is currently responsible for 30 percent of the nation’s total corn-based ethanol production — Iowa should be a prime destination for solar energy. The Hawkeye state has an excellent state tax credit; however, per 2020 statistics, the state ranks in the lower 20th percentile for solar production and investment, likely due to low electricity rates, and poor solar-focused policies.

• Pros and Cons of Going Solar in Iowa
• Cost of Solar in Iowa
• Iowa Solar Financing Options
• Iowa Solar Incentives
• Iowa Solar Policy Information
• Iowa Solar Statistics

Read on to learn more about the ins and outs of going solar in Iowa.

Pros and Cons of Going Solar in Iowa

Here's an at-a-glance description of the current benefits and drawbacks of switching to solar in Iowa:

Benefits of Going Solar in Iowa:

• 30% Federal Solar Tax Credit
• 15% State Tax Credit
• Available Tax Exemptions
• Passable Net Metering and Interconnection Rules

Drawbacks of Going Solar in Iowa:

• Long Payback Period
• Low Utility Rates
• No Solar Carve-Out
• Weak RPS
• No Lease or PPA Options

Cost of Solar in Iowa

For a typical 5 kW solar PV system in Iowa, homeowners can expect to pay around $21,000. While this might seem steep, solar customers should remember that the levelized cost of solar in Iowa (meaning the total cost of a system divided by the total number kilowatts produced over the system’s lifetime) comes out to about 5 cents per kWh, as opposed to 21 cents if homeowners stick with traditional utilities.

Iowa Solar Financing Options

Iowans can make the switch to solar either through cash investment or solar loan financing. Both will set them on the path to solar array ownership while also qualifying them for significant state and federal tax credits.

Cash Purchase

The fastest way to see a return on solar investment is through cash purchase. As mentioned above, solar customers in Iowa should plan to spend anywhere between $12,000 and $21,000 (depending on system capacity and energy needs) for a solar energy system, with a 5 kW system occupying the higher end of that range. Thankfully, both federal and state solar credits can drastically reduce that price down to roughly $14,000.

Cash purchase leads to the fastest returns in the sense that solar customers could have their systems turn a profit — meaning the savings matches their initial investment — within about 13 years. That means they’ll be seeing more than $1,000 in annual savings for the next 12 years, or a little over $13,000 by rough estimate.

Solar Loan

The other option is a solar loan. For the average system capacity of 5 kW, solar borrowers would need a loan of a little more than $21,000 to cover expenses. But again, federal and state solar tax credits, plus a zero-down, 15-year repayment plan, will help solar customers start saving from day one.

Those savings will diminish over the next 18 or so years as the gap between loan payments and what customers would otherwise be paying the utility company closes. In fact, customers will be paying more in loans than in utility bills for about half that time. Once the loan is completely paid off, borrowers will enjoy more than $1,000 in annual savings, and net about $6,500 by the close of the 25-year system lifespan.

Iowa Solar Incentives

Despite having no solar rebate in place, Iowa does have a number of favorable solar incentive choices that will help reduce the cost of solar power in the state:

Iowa Solar Tax Credit

In addition to the federal tax credit, Iowa is one of the few states to offer a tax credit at the state level, crediting 15 percent or $5,000 (whichever is lower) on every purchased solar array system within its borders. To qualify, homeowners must apply for the credit by May 1 of the year following the installation.

Tax Exemptions

Iowa offers two tax exemptions on solar installation systems in the state:

• Property Tax — Solar panel systems will be 100% tax exempt for the first five years of operation. That means homeowners will not be taxed on the additional value the solar system adds to the home for five years.
• Sales Tax — From solar panels and inverter systems, to roof attachments and mounting equipment, all solar system components hold sale tax-exempt status, which can result in hundreds of dollars in savings.

Iowa Solar Policy Information

Despite lower than average electricity rates and no solar carve-out, Iowa does have some pro-solar policies that could be stepping stones toward greater solar access and adoption in the state:

Renewable Portfolio Standard

At a flat 105 megawatts of renewable energy, the state’s renewable portfolio standard, or RPS, is rather flimsy. The clean energy policy attaches no deadline, no penalties, and otherwise no mandate to utility companies to make room for renewable energy sources — and, the state has long met and exceeded this goal through its vast array of wind turbines and corn-based natural gas, with more than 130 mW worth of solar energy to boot.

Net Metering

Iowa’s statewide net metering rules require utility providers to credit solar users for any excess solar energy their systems contribute to the energy grid. That said, this policy only applies to the state’s top two utility providers, and does not require them to send a check for excess energy, but gives them the option to apply that credit to subsequent utility bills. 

Interconnection Rules

Iowa’s interconnection rules force solar owners through a few unnecessary hoops prior to allowing them to plug into the grid. That includes additional insurance, external shutoff systems, and secondary reviews of solar installations. All these rules add to the cost of going solar, and could even disincentivize Iowans from making the switch.

Iowa Solar Statistics

As of 2020, Iowa has had more than 5,500 solar panel systems installed within its borders. More than 50 solar installer companies operate in Iowa and employ nearly 1,000 people. With all that said, the state still ranks 40th in terms of solar output and investment.

Interested in a solar quote? Check out the top-ranked solar companies in Iowa and read reviews from verified solar customers.

Sources

• solarpowerrocks.com/iowa/
• solarreviews.com/solar-panels/iowa
• seia.org/state-solar-policy/iowa-solar
• solar-nation.org/iowa
• solaractionalliance.org/solar-panel-installation/iowa/

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