2023 Solar Incentives Guide for Ames, IA - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Ames?

Source: https://www.dsireusa.org/

Solar incentives are intended to make renewable energy usage more affordable via financial incentives for those who install solar panels on their homes. The incentives may include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the Iowa government and some by your utility company, county or municipality. Categories of solar incentives include:

• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
• Tax Exemptions: These might come in the form of property tax exemptions, which would allow you to exclude the value added by your solar panels when paying property tax on your house. You could also look for exemptions on sales tax at the time of purchase.
• Rebates: A solar rebate is a partial refund given after you've purchased your solar system. These might be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement in place with your Ames utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.

Federal Solar Incentives

When people think of solar incentives, federal incentives may be the first thing that comes to mind. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a specified percentage of the money you spend installing solar panels.

The ITC covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can receive this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.

To find out exactly how much the ITC could save you, get in touch with your local Ames solar panel installer.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then decrease yearly until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit applies to you, reach out to your local Ames solar installers.

State & Local Solar Incentives

Not all solar incentives are federal; tax credits, rebates and more are often offered at the state and local level. These incentives — which may be provided by your county or municipality, or by the state of Iowa — could be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Ames

The expanding number of solar incentives available has contributed greatly to the increase in the adoption of solar energy nationwide over the last 15 years. You may receive solar incentives from the Iowa government, the federal government or your local utility company. Reach out to your local solar panel installer today to learn more and to save the most money possible on solar panels for your Ames home.