Solar incentives once again on legislative agenda in Iowa

Efforts to increase two popular tax credits for solar projects are likely to top the legislative clean energy agenda in Iowa during the current session, which gets underway today.

Although no bills have been filed yet, one advocate expects to see bills that would increase funding for the two programs — one aimed at utilities, the other for customers — that were supported in the 2015 session.

Last year, the Iowa General Assembly increased funds to subsidize the cost of solar panel installation. That bipartisan support, along with the fact that the additional funds have been snapped up quickly, is prompting interest in further increasing the funds available, said Nathaniel Baer, energy program director for the Iowa Environmental Council.

Legislation in 2015 expanded the state’s renewable energy production tax credit by creating a 10 megawatt set-aside for solar investments only. The bill also made the credits available to investor-owned utilities and municipal utilities. Until then, the tax credit funds had been available only to rural cooperatives.

“By August that (10 megawatts) was fully subscribed, and there is a slight waiting list,” Baer said. The state has not awarded any credits yet, as it is still developing rules for making the awards.

“I think there is a lot more interest,” Baer said. “We’d like to see the 10 megawatts expanded…a significant expansion so that any utility in Iowa that is interested in doing a solar project would be able to get that.”

The production tax credit pays 1.5 cents per kilowatt hour to any utility that is either generating or purchasing solar power.

Baer said he also expects a campaign to, once again, increase the size of the solar income tax credit fund. Homeowners and businesses that install solar panels can qualify for a state income tax rebate equal to as much as 50 percent of the federal solar tax credit, or roughly 15 percent of the project’s cost.

Two years ago, the state put $4.5 million into the fund. Last year the legislature agreed to increase the fund to $5 million.

“The latest data I have is that of the $5 million, there have been requests for $4 million, and those will keep coming until May 15,” Baer said. “That’s the deadline. We expect demand to exceed the $5 million cap. We’re pretty convinced $5 million won’t be enough. We’ll be looking to increase the annual cap for that as well.”

Comments are closed.