Iowa Solar Incentives (Rebates, Tax Credits & More in 2023)
By Kristina Zagame /
In this guide to Iowa solar panel costs, you’ll learn:
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The average solar panel system in Iowa costs $24,930 before the federal tax credit or $17,451 after the credit. This figure assumes that you need a 9 kilowatt (kW) system to offset the average monthly electricity bill of $110 in the state.1
Solar panel installation costs vary based on a number of factors, but the size of your renewable energy system (how many panels you install) is the most significant contributor. So, if you have lower energy needs than the average Iowan, you can save money on solar panels by installing a smaller system.
Most Iowans see pre-tax-credit solar systems costs between $16,600 and $33,240. Solar panel systems are priced per watt, costing an average $2.77 in Iowa. The table below shows how the cost of solar energy systems in Iowa varies by size:
|SIZE OF SOLAR PANEL SYSTEM||IOWA SOLAR PANEL COST||COST AFTER FEDERAL TAX CREDIT||HOME SIZE THIS SYSTEM IS APPROPRIATE FOR|
|6 kW||$16,620||$11,634||1,500 sq. ft.|
|7 kW||$19,390||$13,573||1,625 sq. ft.|
|8 kW||$22,160||$15,512||1,750 sq. ft.|
|9 kW||$24,930||$17,451||1,875 sq. ft.|
|10 kW||$27,700||$19,390||2,000 sq. ft.|
|11 kW||$30,470||$21,329||2,125 sq. ft.|
|12 kW||$33,240||$23,268||2,250 sq. ft.|
The average cost of solar is slightly more expensive in Iowa compared to the national average — $2.77 per watt compared to $2.66 per watt. This means that the average system costs $17,451, versus the national average of $16,758 — a $693 difference for the same size (9 kW) system. These figures are both after factoring in the solar tax credit.
|Place||Cost Per Watt||Cost for Average (9 kW) System After Tax Credit|
All numbers accurate as of December 2022. Based on national market research data.
Lucky for you, solar panel costs are dropping in Iowa. According to the Solar Energy Industries Association (SEIA), solar prices have dropped 52% in the last decade.2
More and more homeowners are taking advantage of the lower costs of solar, with the number of residential solar installations increasing every year since 2018, with a sharp uptick seen in 2020.3
Comparatively, electricity rates are rising in Iowa and are expected to keep increasing. The U.S. Energy Information Administration (EIA) predicts that the cost of residential electricity will increase again in 2023.4 The higher your electricity costs, the more value your solar system will provide.
With electricity rates increasing and the cost of going solar decreasing, it’s well worth it to install solar panels in Iowa.
The average Iowa homeowner saves at least $17,500 over the 25-year lifetime of their solar panel system. That’s based on the average system size and electricity data from the EIA.
But your energy savings will vary based on how strong your panels are and how you choose to finance your solar system.
The three main solar financing options are cash purchases, solar loans and leases. Below, we’ll explain how much money you can expect to save with each option.
|Iowa Solar Financing Option||Average Upfront Cost (After Federal Tax Credit)||Average Payback Period||Est 25 Year Savings|
|Loan||As low as $0||15 years*||$13,179*|
*These are conservative estimates intended to represent base-level averages. In most cases, customers can see an even higher ROI and shorter payback periods.
Purchasing your system upfront in cash is the best way to save money on energy and get the most out of your solar investment.
A cash purchase offers the shortest payback period and won’t accrue interest like a solar loan. But perhaps the best benefit of purchasing your solar system in cash is that you’ll start seeing energy savings right away.
However, in Iowa where the average solar power system costs $17,451, we don’t anticipate the majority of homeowners will be able to afford the entire system in cash. But the more you can pay upfront, the more savings you’ll see in the long run.
Pros of Cash Purchase
Cons of Cash Purchase
Most Iowa homeowners pay for their home solar systems with a solar loan. Similar to a car loan, solar loans typically require little money down and then you can pay for your solar equipment in monthly installments over time.
Taking on a loan is a great way to finance your solar system. But again, we recommend paying as much as you can upfront so that you don’t get burned with interest rates. The good news is that you can use some of your solar savings (the money that would be going to your energy bills) for your monthly solar loan payment.
Just keep in mind that your total solar system cost will be higher with a solar loan because of the accrued interest. The average solar payback period in Iowa is 13 years, which is already slightly higher than the national average of 12 years. This will all depend on your own financial situation, however, so it’s best to speak with a solar company to get an accurate estimate.
Pros of Solar Loans
Cons of Solar Loans
Lastly, a solar lease allows you to utilize solar energy without owning your system. It’s just like renting a home, except in this case you’re renting your solar panels.
Solar leases may be a good idea if your main goal is to switch to solar to reduce your carbon footprint and save some money on energy bills. But they’re by far the worst option when it comes to your return on investment (ROI).
When you lease your solar panel system, you don’t get to claim any tax credits or rebates that you could get from going solar. Instead, your solar installer gets to capitalize on these financial and tax incentives.
Solar leases also won’t add value to your home the way buying a solar panel system would. Actually, solar leases can complicate the process of selling a home, as not all home buyers will want to assume the lease, and it can cost thousands of dollars to terminate your lease early.
Pros of Solar Leases
Cons of Solar Leases
Many homeowners think about installing solar panels to save money on energy bills in Iowa. But finding out a solar panel system can cost between $16,000 and $34,000 may scare you off.
Don’t be scared! There are several ways to save on solar panels in Iowa, including:
The federal solar Investment Tax Credit (ITC) is the best solar incentive in Iowa, worth up to 30% of your total system cost. In Iowa, the average homeowner shaves $7,479 off the total cost of their solar energy system.
It’s important to note that the ITC is not a discount, but rather a credit for the federal taxes you owe. If you don’t owe at least 30% of your total system cost in taxes the year you install your solar system, the credit rolls over up to five years.
We’ll be honest; compared to other states Iowa doesn’t offer great solar incentives. It used to offer a state tax credit, but the program has since expired.
Still, some solar programs in Iowa can help you lower the cost of your solar panel system. For example, customers of Waverly Light & Power can receive the following cash rebates for solar and other energy-efficient HVAC systems:
You should always check with your utility company to see if there are any additional solar incentives or energy efficiency rebates available that can lower the cost of your home improvement project.
Iowa also offers sales tax exemptions for all solar equipment. With the 6% sales tax rate in Iowa, that saves you about $1,500 on your solar investment.
And while it won’t save you any money upfront, Iowa’s solar property tax exemption means that you won’t have to worry about your property taxes increasing, even though solar panels will increase your home value by an average of 4.1%, or around $8,200, based on the average home value of $200,000.7,8
There are 30 different solar companies in Iowa, and all of them want your business.9 You can use the competitive nature of the solar industry to your advantage to secure the best price on your solar panels.
Every solar provider in Iowa is going to charge a different amount — even if you’re looking at the same products. Two companies’ quotes can be hundreds or even thousands of dollars apart. But, we don’t expect you to call up all 30 solar installers in Iowa to see who offers the cheapest solar panels or the best value deal.
Choosing a solar company can be an exhausting process — that’s why we’re here to help. You don’t have to spend hours calling the best solar companies in Iowa and comparing their prices because the EcoWatch reviews team has already done the work for you.
We know you’re passionate about switching to solar energy, and we’re passionate about helping homeowners like you reduce your carbon footprint and create a healthier planet. By using EcoWatch to receive multiple quotes, you can compare offers directly to make sure you’re getting the best value out of your solar system.
Customers who compare multiple quotes via our funnel are more likely to secure a lower price for a system than customers who go directly to a single provider. Click the links below to receive your free quote. Pro tip: if you prefer one company we’ve featured over another, but the preferred company is more expensive, use the lower quote as a bargaining chip.
You may be wondering how the cost of a solar panel system could possibly range from $16,000 to $35,000 in Iowa — that’s a huge range.
The following factors affect the cost of your solar panel system in Iowa:
You pay for solar panels on a per-watt basis, so it should come as no surprise that the more solar panels you install, the more your solar panel system is going to cost.
The average Iowa homeowner uses 861 kilowatt-hours (kWh) of electricity per month, which is why a 9 kW system is the average size needed to offset the energy needs (dividing energy usage by 100 gives you the system size needed, we rounded up to the nearest whole number).10
If you only use 600 kWh of energy per month, you can get away with installing a 6 kW energy system, which costs roughly $16,620 in Iowa before applying any solar incentives.
You also don’t need to install as many solar panels as you need to offset your entire energy bill. You could install a few solar panels to lower your energy costs and shift some of your energy usage away from fossil fuels.
As mentioned, different solar companies will charge different prices even for the same equipment. Solar installers base their prices on several different factors, including location, the difficulty of installation, availability of products and more.
It may even vary based on solar popularity where you live. For example, a national company like ADT solar may have different installation rates for Des Moines customers versus Iowa City or Cedar Rapids depending on how far its technicians have to travel and how much it has to pay to get the proper solar equipment shipped to that city.
We know it’s sounding like a broken record, but this is why it’s so important to get multiple quotes from different solar companies. It can make a huge difference in the cost.
You wouldn’t expect to pay the same price for a Toyota as you would for a BMW. Just like cars, each solar equipment brand has its own reputation for performance.
Pair your panels with top-notch equipment like a Tesla Powerwall solar battery and the latest Enphase microinverters and you can expect solar installation prices to climb.
But on the other hand, you can think of paying for top-performing solar panels as more of an investment than a luxury purchase. The better your solar technology, the more power it’s going to generate, which means bigger energy savings in the long run.
Watch Below: Learn How Solar Energy Has Gotten So Cheap
Fortunately, solar panels are pretty low-maintenance. But there may be a few maintenance costs that may pop up over the course of their 20- to 30-year lifespan.
Solar panel maintenance in Iowa costs $400 on average but can range between $300 and $700 depending on the issue. Let’s look at some of the potential issues that may arise:
Any dirt or debris covering your solar panel will decrease your solar energy output. But here’s where Iowa’s average amount of rainfall and an above-average amount of snowfall can actually come in handy for solar panels.11
Rain and snow can help solar panels by keeping them clean and clear of debris. Otherwise, you can expect to pay between $150 and $330 for professional solar panel cleaning.
You should always check your solar panel company’s warranty to see what coverage they offer for broken or cracked panels. Sometimes you can have these issues replaced for free.
If the glass cracks on your solar panel, it can cost between $120 to $500 per panel to fix. If the panel itself breaks, it’s typically between $150 and $500.
Solar panel repairs are not typically covered if the damage was due to weather, which is unfortunate in a state like Iowa that sees severe weather like tornadoes, thunderstorms and blizzards.,12 However, storm damage to solar panels is usually covered under your homeowner’s insurance.
There are more than 30 solar installers based in Iowa and likely several more that serve Iowa homeowners from surrounding states. Choosing the best solar panel brand for you is the one that fits your budget and provides the efficiency you need to cover your home’s energy consumption.
The table below includes some of the top solar brands available in Iowa, as well as a relative pricing guide. This should help you figure out which brands are most likely to be affordable given your budget.
|SOLAR PANEL BRAND||AVERAGE COST PER WATT ($-$$$$$)|
Read More About Going Solar in Iowa
The EcoWatch team gets lots of questions from Iowa residents about solar system costs and the process of converting to renewable energy. Below are some of the questions we see most frequently, along with our responses. If you have specific questions that aren’t answered here, reach out to our team of solar experts at email@example.com.
The average cost to install solar panels in Iowa is $24,930, or $17,451 after utilizing the federal tax credit. This comes out to $2.77 per watt. With that being said, your price can fall significantly above or below this figure.
The best way to get an accurate quote for your home is to have a reputable solar installer provide a customized estimate based on your monthly energy needs, shading on your property, the equipment you want and other factors that can affect your total
Yes! Solar installations boost property value in Iowa, and this is one of the premier benefits of going solar. According to a study done by Zillow, the average home jumps up in value by around 4.1%. With an average home value in Iowa of $180,839 at the time of publication, that’s a typical increase of approximately $7,414!
Your value increase could be more significant in higher-value areas, like Des Moines, Iowa City and Cedar Rapids. It’s important to understand that this increase in value is only expected if you finance or buy your panels via a cash purchase. Leases and power purchase agreements (PPAs) will not provide the same benefits, as with these, you don’t actually own the solar system on your roof.
Generally speaking, it’s better to buy or finance your panels in Iowa. Leasing often seems more appealing, given the low- or no-cost entrance into renewable energy it provides, but it doesn’t let you take advantage of the same benefits, thus diminishing your return on investment.
For example, a solar lease won’t increase your property value, so you’ll miss out on an average of $7,414 with a lease. You also won’t get the federal tax credit, which is another $7,479 you won’t get with a lease.
Additionally, many solar loans offer no-money-down and low-APR options to make them just as appealing and accessible as leases to most homeowners.
No, solar panels aren’t free in Iowa or anywhere else. Some companies advertise “free panels,” but they aren’t actually free. These companies are usually trying to get you to sign a lease or power purchase agreement (PPA), neither of which is advisable if you can avoid it.
With that being said, many homeowners in Iowa find that their solar systems pay for themselves over time and save them tens of thousands of dollars in the long run, effectively making the solar system free.
Yes, an appropriately sized solar panel system can eliminate your energy bills in Iowa. Homeowners in the Hawkeye State have below-average energy needs, relatively low electricity rates and access to state-mandated net metering programs.
As long as your roof can handle the system size you need, you shouldn’t have too much of a problem bringing your electric bills down to $0 a month.
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