Iowa Solar Energy System Tax Credits expire for residential installations at the end of 2021, but at least two large-scale solar energy projects have been announced in the past couple weeks in the Hawkeye State.
The Iowa Department of Revenue projects Solar Energy System Tax Credit redemptions will decrease beginning fiscal year 2022. Additionally, federal tax credits are being phased down to 22% through calendar year 2023 from 30% in 2019, the department said in a report it released Monday.
Iowa’s Solar Energy System Tax Credits became available in 2012 and are currently 50% of federal credits and are limited per installation. Since 2015, there has been a maximum of $5 million available each year for state tax credits. Any further money that Iowans request in tax credits has been placed on a wait list for the following year’s allocation.
Under Iowa law, tax credits for business installations need to begin construction before calendar year 2022.
“Valid and timely business tax credit requests will not expire under Iowa law and may carry forward on the waitlist to future years,” the department said on its website.
The report said that in fiscal year 2021, $5.18 million in Solar Energy System Tax Credits were redeemed. The department projected solar tax credit redemptions would decrease to $4.3 million in fiscal year 2022 and rise to $4.6 million before steadily decreasing from fiscal year 2024 to fiscal year 2026.
A bill that would have extended Iowa solar tax credits failed in the 2021 legislative session.
“With the inaction by the state policy makers and the federal tax credit winding down, the projections seem to be practical. … From our prospective, we need all forms of wind and solar generation (along with storage) to replace fossil fuel technology, it’s cheaper and cleaner,” Environmental Law & Policy Center Senior Policy Advocate Steve Falck told The Center Square.
The Iowa Board of Regents approved Iowa State University’s request to enter into a lease agreement with Alliant Energy to develop and operate a solar farm on university land south of Ames, the university announced in an Nov. 4 news release. The solar farm’s maximum output would power 230 homes annually and power nearby teaching and research farms.
“Iowa State will receive renewable energy credits generated by the solar farm, which will off-set a portion of the university’s annual carbon emissions,” the release said.
They plan to begin construction in late 2022 or in 2023, depending on survey results, permitting, regulatory changes and equipment supply, the release said.
The university announced a five-year Strategic Plan for Sustainability in Operations plan in October 2020 that includes its goal of tripling the use of renewable energy and reducing annual building energy consumption 5% from 2012 numbers. Alliant Energy seeks to stop using coal in its generation fleet by 2040 and achieve net-zero carbon dioxide emissions from electricity by 2050.
The Iowa Utilities Board is expected to weigh in on another proposed project from Alliant Energy next year, Alliant Energy announced in a Nov. 2 news release. The company filed its plans that day to acquire 200 MW of solar energy and 75 MS of battery energy storage from the first phases of the Duane Arnold Solar Project.
Developed by NextEra Energy Resources in Linn County, the project would create up to 200 new construction jobs and contribute $260 million to the Iowa economy. It anticipates that by 2024, the project would make Alliant Energy the largest solar and battery storage operator in Iowa.
Engineering Services and Products Co. plans to unveil a solar energy system that will power its operation in Dyersville in a ribbon cutting Wednesday. The 450.56 kW-DC roof-mounted solar energy array is intended to produce 572,674 kWh of electricity during its first year and save about $2.5 million in energy costs over the course of 25 years, the release said.
Alliant Energy media spokespersons were not available for comment.
