Iowa Solar
Incentives & Rebates

Updated March 7, 2021

Iowa Net Metering

Strong net metering laws are a bonus for Iowa residents. Net metering is a system in which solar panels or other renewable energy generators are connected to the public utility, allowing customers to offset the cost of the energy they draw from the utility with credits they earn on their own production. If your system produces more power than you need, the excess is sold to the grid, which you see as a credit on your power bill.

Iowa Interconnection Standards

Interconnection standards are requirements for connecting solar and other electrical generation systems to the grid. Iowa’s standards are quite strong, making it easier for utility companies to offer net metering.

Iowa Performance-Based Incentives (PBI)

Iowa offers PBIs, which are incentives based on the actual power your system generates. The state calls them Power Performance Payments. You get paid based on the number of kilowatt-hours (kWh) or BTUs generated by your renewal-energy system. The electricity produced is credited as Solar Renewable Energy Credits (SRECs), the value of which fluctuates by the rule of supply and demand.

Iowa State Income Tax Credit

From your state income tax in Iowa you can deduct 18% of the cost of your solar system, up to $5,000.

Iowa Property Tax Exemption

In Iowa, the value of your home will not be reassessed after the addition of a solar system for the first five years. During those five years you keep paying property tax based on the value before you added the system.

Iowa Sales Tax Exemption.

No sales tax in Iowa on the cost of your installed system! That can mean up to 7% savings right up front.

Iowa, Don’t Forget the Federal Tax Credit!

On top of these generous Iowa rebates and exemptions, you also qualify for the hefty tax credit from the Federal government. The solar Investment Tax Credit (ITC) is worth 26 percent of the system cost, and will be deducted from your Federal income tax. The credit goes to those who buy their system (cash or loan), not to those who lease. If you lease a system, incentives go to the third-party owner. A good reason to buy rather than lease!


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