Iowa legislators have reached a compromise on last year’s controversial “Sunshine Tax” bill. The Iowa Capital Dispatch reported Friday that both legislative chambers have unanimously approved bill versions of the“Solar Act,” which are awaiting Gov. Reynolds’ approval.
According to the dispatch, the act would allow owners of home, business or farm solar arrays to continue selling excess energy to utility companies at the retail rate. Last spring, a controversial bill proposed an extra $300 annual fee for solar customers who sell excess energy, meant to cover the cost of using the electric grid. Critics said the fee would make it much harder for private owners to pay off their investment into solar, essentially killing the largely private solar industry in Iowa.
The new version also orders an independent cost-benefit analysis of solar power in Iowa, meant to make sure all parties pay their fair share. Following the study, the Iowa Utilities Board would make a recommendation for reasonable billing methods. Existing solar owners would be immune to recomended changes in billing methods.
A group called the REAL Coalition has been targeting Iowans with ads in support of the SOLAR Act or ‘Sunshine Tax.’ The act would impose an over $300 annual fee on private solar power generators to cover their use of the electric grid, which many believe would kill solar power in Iowa.
Others, like MidAmerican Energy and the REAL Coalition, say the cost of maintaining the grid is unfairly shifted onto non-solar customers.
Josh Scheinblum from KCRG fact checked the coalition’s TV ad. The coalition claimed most energy in Iowa comes from “clean, renewables” while coal and other fossil fuels actually generate the majority. The ad also said solar panel owners use the grid more than others, who end up paying their share. Scheinblum spoke with a solar owner and consultant, who called that claim ridiculous.
“The whole point for solar is either to slow down or to stop the flow of energy flowing into the meter,” he said.
Little is known about the REAL Coalition. It formed as a non-profit in January and is not a registered as lobbying group or Political Action Committee. Their site says they “give voice to Iowa consumers, farmers and businesses on the energy issues affecting our state,” and gives no information about their leadership or funding sources.
A Little Village article describes them as a dark money group (“a nonprofit that engages in political activity but does not disclose its funders”) and details a vague encounter with a REAL Coalition telemarketer. Some suspect MidAmerican Energy is behind the group.
The so-called “sunshine tax” might have a bright and cheery name, but the proposed fee could put a real damper on private solar power in Iowa.
Described in House Study Bill 185 and Senate Study Bill 1201, the “Solar Options Lead to Affordable Renewables (SOLAR) Act” would impose an over $300 annual fee on solar customers — property owners with small-scale solar panel setups who sell excess power back to the grid. The fee would cover the cost of using the electric grid and support Iowa’s energy infrastructure.
Currently, such customers can expect to pay off the high initial cost of solar panel installation in less than 10 years through savings on energy bills and sales of excess power. Cedar Rapids City Councilman Tyler Olson told the designated House subcommittee the fee would extend that period to as much as 20 years, as reported in the Gazette. This would greatly discourage private individuals from investing in home setups, which typically last about 25 years.
Supporters of the fee, including major Iowa utilities like MidAmerican and Alliant Energy, say it is unfair that customers who do not generate their own power absorb the cost of maintaining power infrastructure that is used by solar generators.
“Growth is possible when policies allow all customers to benefit from renewable energy,” MidAmerican Energy’s president and CEO said in a press release. “Common sense legislation focused on keeping costs low and affordable for everyone provides the best opportunity to grow solar in Iowa.”
Opponents say the fee would only allow solar to grow for large corporations, however, and that it would kill the future of Iowa’s growing solar industry, which largely develops and installs systems for private homes, businesses and farms.
On Tuesday, the Gazette reported that the the bill would soon move forward in the Iowa House, to the full House Commerce Committee. Yesterday, the Iowa Senate held a hearing on their version of the bill, and did the same.There is a push among some legislators to delay the conversation until the Iowa Utilities Board finishes an assessment of compensation for solar energy producers next year.