2023 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 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Pella?
Property Tax Exemption for Renewable Energy Systems
Renewable Energy Equipment Exemption
Solar Energy Systems Tax Credit (Personal)
Local Option - Special Assessment of Wind Energy Devices
Methane Gas Conversion Property Tax Exemption
Geothermal Heat Pump Tax Credit
Energy Replacement Generation Tax Exemption
Reduced rate for large hydro
Residential Energy Efficiency Rebate (Offered by 18 Utilities)
Federal Residential Renewable Energy Tax Credit
Solar incentives mitigate the cost of installing a solar panel system on your home. Financial incentives like these are in place to encourage more Americans to make the switch to renewable energy. Different kinds of incentives, such as discounts, cash back or monthly utility bill credits, may be available to you. Certain incentives may be offered by the state of Iowa, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Pella utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in others you may be refunded a percentage of the value.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when paying property tax on your house.
Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when you think about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of the cost of your solar system.
The ITC initially applied to 30% of the cost of solar panel installation, although that number has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum claim amount. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To best understand how the ITC could apply to your situation, call your local Pella solar panel installation expert and ask for more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit. This amount will then decrease slightly each year until the current program ends. The expansion to the program 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. To best understand how the new Clean Energy Credit might apply to you, get in touch with your local Pella solar installation company.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. These incentives — which might be given by your county or municipality, or by the state of Iowa — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Pella
Solar incentives can come from your local utlity company, the Iowa government or the federal government. The large number of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. Call your local solar panel installer today to learn more and to save the most money possible on solar panels for your Pella home.
- 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
Best Warranty Coverage
- Industry-leading warranty coverage
- Expansive service area
- Some reported communication issues
- No leases or PPAs
EcoWatch's Pella, IA Solar Incentives FAQs
How do I learn if I qualify for specific solar incentives?
Typically, solar incentives apply to:
- a new solar panel system
- installed on property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the Iowa government or by your county/municipality, sometimes have additional qualifications. Talk to your local Pella solar installer to find out what incentives your project may qualify for.
How much will a solar system save me on my electric bill in Pella annually?
After adding solar panels to your Pella home, you can expect to save approximately $900.25 per year, or approximately $17,104.69 over the next 20 years.
What are the environmental benefits of switching to solar energy?
You can decrease your carbon footprint by 450 pounds of CO2 a year by installing solar panels. This adds up to roughly 9,000 pounds in 20 years. In addition, solar power is a renewable energy source, which means that switching your home over reduces the drain on our planet's resources.
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 claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of solar panels. Depending on which incentives you are eligible for, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to verify that you are claiming incentives correctly and that you're getting the most money you can.
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.