2025 Solar Incentives Guide for Johnston, IA - Tax Credits & Rebates

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

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

The term "solar incentives" refers to financial incentives that are in place to encourage the adoption and use renewable energy by making solar panels more affordable. The incentives could include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the Iowa government and some by your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Net Metering: You may be able to sign a net metering agreement with your Johnston utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your utility bill each month.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. These might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions let you exclude the value that your solar panels add when you calculate how much property tax you need to pay on your home.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a certain percentage of the money you spend on your solar system.

The ITC applies to the total cost of solar panel installation, including the panels themselves as well as accessories, equipment and labor. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

Speaking with your local Johnston solar panel installation expert is the best way to understand how the ITC may apply to your situation.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Under the new program, solar installation projects started after January 1, 2022, and completed by the end of 2032, may be eligible for a 30% tax credit. This credit amount will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Johnston solar panel company can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Tax credits, rebates and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from the Iowa government, or from your specific county or municipality.

Next Steps for Installing Solar in Johnston

There are many types of solar incentives: those given by local utility companies, those provided by the federal government and those provided by the Iowa government, to name a few. Solar energy utilization has grown enormously in the last 15 years, thanks to these incentives. Your local Johnston solar panel installation expert can provide you with more details about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.