2024 Solar Incentives Guide for Iowa City, IA - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Iowa City.

You'll learn about:

  • Local & State Solar Incentives
  • Federal Tax Credits (Updated for 2024 and beyond)
  • Ways to optimize your solar investment

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Iowa City solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated February 03, 2024

Why you can trust EcoWatch

We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

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

Property Tax Exemption for Renewable Energy Systems

Incentive Type:
Property Tax Incentive
100% of value added by renewable system

Methane Gas Conversion Property Tax Exemption

Incentive Type:
Property Tax Incentive
100% exemption for 10 years

Alliant Energy Interstate Power and Light - Residential Energy Efficiency Rebate Programs

Incentive Type:
Rebate Program
Advanced Power Strips: up to $20
Air Source Heat Pump: $300-$800 for existing homes, $180-$480 for new homes
Appliance Recycling: up to $50
Central A/C: $150-$600 for existing homes, $90-$360 for new homes
Ductless Mini-Split Heat Pump: Varies
Electric Heat Pump Water Heater: $300-$350 for existing homes, $180-$210 for new homes
Electric HVAC System Tune-Up: up to $50
Gas Furnace: $180 for existing homes, $80 for new homes
Geothermal Heat Pump: $1,320-$1,750 for existing homes, $790-$1,050 for new homes
Learning Thermostat: $100 for existing homes, $60 for new homes
LED Light Bulbs: In-Store Rebates
Online Home Energy Assessment: FREE
Room Air Purifier: up to $30
Variable Speed Pool Pumps: up to $220

Geothermal Heat Pump Tax Credit

Incentive Type:
Personal Tax Credit
20% of the Federal Tax Credit, equivalent to 6% of the system cost

Farmers Electric Cooperative (Kalona) - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
LED Lighting: $2/bulb
Security Yard Lights: $100
Geothermal Heat Pumps (New Construction): $350/ton
Geothermal Heat Pumps (Upgrade): $700/ton
Air Source Heat Pumps (New Construction): $400
Air Source Heat Pumps (Upgrade): $800
Central Air Conditioners: $200
Heat Pump Water Heaters: $400
Refrigerators: $50
Freezers: $50

Renewable Energy Equipment Exemption

Incentive Type:
Sales Tax Incentive
100% of sales tax

Local Option - Special Assessment of Wind Energy Devices

Incentive Type:
Property Tax Incentive
Property valued at 0% of the net acquisition cost in the first assessment year, increasing annually by 5 percentage points to a maximum of 30% of the net acquisition cost in the 7th and succeeding years

Linn County Rural Electric Cooperative - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
All Star Home (New Construction): $500/home
Premier Electric Home (New Construction): $200/home
Heat Pump Water Heater: $650/unit
High Efficiency Electric Water Heater: $75-$150/unit
Drain Water Heat Recovery Systems: $450/unit
Clothes Washer: $40/unit
Clothes Dryer: $20/unit
Interior Lighting: $5/fixture
Outdoor Lighting: $10-$60/fixture
Geothermal Heat Pump: $150-$400/ton
Air Source Heat Pump: $200-$300/ton plus $250 bonus
Central A/C: $100
Heat Recovery Ventilator: $250/unit

Energy Replacement Generation Tax Exemption

Incentive Type:
Corporate Tax Exemption
100% exemption for self-generators, landfill gas and wind
Reduced rate for large hydro
Learn more:

Solar Energy Systems Tax Credit (Personal)

Incentive Type:
Personal Tax Credit
50% of Federal ITC (15% for 2019 and earlier, 13% for 2020, 11% for 2021, 5% for 2022, 0% for 2023 and later).

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

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


Solar incentives are meant to help mitigate the cost of installing solar panels on your home. These financial incentives are intended to encourage more Americans to switch their home over to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are handled by the state of Iowa or your utility company, county or municipality. Categories of solar incentives include:

  • Net Metering: You may be able to sign a net metering agreement with your Iowa City utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
  • Rebates: A solar rebate is a partial refund given after you've purchased your solar system. These may be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
  • Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
  • Tax Exemptions: These can come in the form of property tax exemptions, which would allow you to ignore the value of your solar system when paying taxes on your home. You may also qualify for an exemption on sales tax at the time of purchase.

Best National Provider

SunPower

★★★★★
5.0

  • Most efficient panels on the market
  • National coverage
  • Cradle to Cradle sustainability certification
  • Great warranty coverage
  • Expensive
  • Customer service varies by local dealer

Best Technology

Tesla Energy

★★★★★
3.2

  • Price-match guarantee
  • Sleek, efficient, and durable solar panels
  • Best solar battery on the market
  • Some reported issues with customer service
  • Customer service varies by local dealer

Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a specified percentage of the money you spend on solar panels for your home.

The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, labor and equipment. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

Your local Iowa City solar panel installer can offer more information about the ITC and how it applies to your situation.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. The Clean Energy Credit runs until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit. The amount will decrease slightly each year until the current program ends. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. The easiest way to fully understand how the new Clean Energy Credit will apply to you is to talk with your local Iowa City solar panel installers.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. Similar to federal incentives, these may include tax credits, rebates and more. The incentives — which may be given by your county or municipality, or by the state of Iowa — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Iowa City

There are many kinds of solar incentives: those given by the federal government, those provided by the Iowa government and those given by local utility companies, to name a few. The use of solar energy has increased enormously in the last 15 years, partially due to these incentives. It is a good idea to talk to your local Iowa City solar installer to learn more about these incentives and to be sure that you're getting the most money possible for your solar panels.

EcoWatch's Iowa City, IA Solar Incentives FAQs

How do I learn if I qualify for different solar incentives?

It's a smart idea to get in touch with your local Iowa City solar installer to get an understanding of which incentives your project may qualify for. Generally, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those given by the state of Iowa, may have additional requirements.

My home already has solar panels. Does my system qualify for any incentives?

You should plan to talk to someone from the company that installed your solar panels – or call a local Iowa City solar installer — to better understand which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.

What are some of the environmental benefits of switching to solar energy?

Solar energy is a renewable energy source — by changing where you get your energy, you can help reduce the strain on our planet's resources. Solar panels can also lower the CO2 emissions from your home by 450 pounds yearly, or around 9,000 pounds over 20 years.

Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?

The order that incentives will be applied in may vary depending on which incentives you receive but usually yes, you can receive multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to be sure you are claiming all the incentives you qualify for and applying them in the correct order.

Can I get any financial incentives when I add solar panels to a rental property, vacation home or commercial property?

While we recommend getting in touch with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many incentives can be claimed on a second home, as long as it is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the specifics.

Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.

Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.

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