The Iowa Legislature Failed to Extend Solar Tax Credits for Homeowners


Via Flickr

Elizabeth Miglin | June 1, 2021

Despite multiple bills introduced to extend the tax credit last year, many died in committee when the Legislature decided to focus on other budget issues during the overtime session. 

The failure of the legislature to extend the solar tax credits will impact more than 750 Iowa homeowners who currently qualify for credit with an average of $3,200 each. This number does not include the 2,000 person and growing waitlist of credit requests by participants, many being farmers according to the Iowa Capital Dispatch. Businesses will continue to be eligible for credits, however the state has spent all of its money for residential projects.

The state has previously offered credits which offset 13% of project costs of under $5,000 for a residential project and $20,000 for commercial projects. Federal tax credits cover an additional 26% of project costs. Between 2012 and 2020, the incentive covered $36.6 million for 6,213 projects with combined costs of $291 million according to the Iowa Solar Energy Trade Association.  

Solar energy advocates were told by GOP senators the residential credits would be removed because the industry is “mature” and doesn’t need them. Iowa has become a national leader in renewable energy, predominantly via wind, however the solar industry has grown quickly in the state as well. Around 85 companies have placed their solar energy supply chains in Iowa. Additionally, in 2015 there were only 350 solar-related jobs in Iowa compared to 2019 which grew to 900, according to a trade group.

Multiple solar energy groups are expected to advocate for tax credit legislation next legislative session.

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