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

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

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 Pella solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Updated January 24, 2025

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

Property Tax Exemption for Renewable Energy Systems

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

Renewable Energy Equipment Exemption

Incentive Type:
Sales Tax Incentive
100% of sales tax

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).

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

Methane Gas Conversion Property Tax Exemption

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

Geothermal Heat Pump Tax Credit

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

Energy Replacement Generation Tax Exemption

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

Residential Energy Efficiency Rebate (Offered by 18 Utilities)

Incentive Type:
Rebate Program
Varies by utility, see program website for details

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 intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are provided by the Iowa government or by your utility company, county or municipality. Some solar incentives you might qualify for are:

  • Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions allow you to ignore the value added by your solar system when calculating the amount of property tax you need to pay.
  • Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have in place a net metering agreement with your Pella utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in others you might get refunded a percentage of the value.
  • Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
  • Rebates: Rebates, or partial refunds after a purchase, are normally applied prior to any solar tax credits being calculated. These rebates might be given by your local utility company, by your state or by your county.
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Federal Solar Incentives

When thinking about solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a set percentage of the cost of your solar system.

The ITC covers solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can apply towards a solar panel system installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.

Reaching out to your local Pella solar panel installer is the best way to learn more about how the ITC could apply to you.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the percentage will be reduced slightly each year until the end of the program in 2035. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit applies to you is to speak with your local Pella solar panel company directly.

State & Local Solar Incentives

Rebates, tax credits and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Incentives may be handled by your county or municipality, or by the state of Iowa. Some incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Pella

Solar incentives may come from the Iowa government, the federal government or your local utility company. The growing number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Your local Pella solar panel installer can help you learn more about which incentives you might qualify for, and get you started on the path to switching to renewable energy today.

EcoWatch's Pella, IA Solar Incentives FAQs

Who installs solar panels near me?

To discover the top solar panel installation companies near you, take a look at our article on the top solar companies in Pella.

When does the federal solar tax credit end?

The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.

Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?

The order your incentives will be applied in could vary depending on which incentives you are claiming but typically yes, you can claim multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to confirm you are claiming all the incentives you're eligible for and applying them in the correct order.

Can I use a combination of solar and another type of renewable energy to power my home?

Yes, you can use multiple types of renewable energy to power your home, such as a combination of wind and solar. You can also use both renewable energy sources and a non-renewable backup source of energy. You should discuss your proposed plan with your local Pella solar panel installer, to make sure you know what you'll need and what types of incentives you may or may not qualify for.

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.

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