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

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

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.

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.