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* Cost data based on quotes for fully-installed solar panel systems submitted on our platform. Prices are shown after applying the 26% federal tax credit.
Iowa solar panels guide 2022
Updated November 2, 2020
Installing residential solar panels is a great investment for Iowa homeowners. Residents of the Hawkeye State can cover around 40% of the total cost of a solar panel installation, thanks to the state and federal tax credit.
Solar power prices, savings and payback in your part of Iowa
The average cost for an installed residential solar system in Iowa is currently
$11,238 after claiming the 26%
federal solar tax credit. This is $2.53 per watt.
However, there is some variance in solar prices in different parts of the state.
The graph below shows the average cost of installed solar systems in your part of the state.
Cash flow graph based on cash purchase of a
Are solar panels worth it in Iowa
Solar panels have fallen in price by more than 80% in the last ten years. In 2020 they also remain subsidized by the 26% federal tax credit and the net metering law, making them an excellent investment. They offer a return well above the long term average return from both the share market and also property investment.
Another way to look at this question is the levelized amount you will pay for each kWh of power you will use over the next 25 years with and without solar panels. As you can see below the savings are significant.
Levelized cost of solar energy
Levelized cost per kWh is the cost of the solar system divided by the total number of kWh produced by a solar system over it’s lifetime
If you don't get solar
(forecast avg Iowa electric rates over the next 25 years)
The most significant incentive to install solar panels for homes and businesses is the federal tax credit. Right now, the federal tax credit is equal to 26% of the total installed costs of installing a solar system. At the end of 2020, the amount of the credit will fall to 22%. This means that in order to maximize your savings potential, the best time to go solar in Iowa is now.
Iowa state tax credit
Iowa has a state solar tax credit equal to 50% of the amount of the federal tax credit a homeowner is eligible for up to $5,000. So, if your federal tax credit incentive was $5,000, your Iowa tax credit would be equal to $2,500.
Iowa has a state-wide net metering policy, but it only applies to the state’s two investor owned utilities: MidAmerican and Alliant Interstate Power and Light. The investor owned utilities must credit their solar customers for the full retail value of electricity for any excess solar energy exported to the grid.
Property tax exemptions
Iowa has a property tax exemption for solar panel systems. Iowa law exempts 100% of the assessed solar system costs from being added to your property taxes for 5 years.
Solar panels power your house when they can but your home uses the utility company for power at other times. In 2022 "solar systems with battery storage" are becoming more popular. These are known as hybrid systems.
How do solar panels work?
Grid-tied solar system
A grid-tied system is the most common type of solar system. It has no solar battery for backup power and utilizes net metering to maximize savings. Solar panels are mounted on your roof then wired together, and the power generated flows into an inverter where direct current (DC) electricity is converted into alternating current (AC) electricity. This electricity is either used by your home or is exported to the utility grid.
Hybrid solar system
In hybrid solar systems, rooftop solar panels are connected to both a solar battery and the electric grid. The solar electricity generated by your panels that your home does not use is stored in the battery instead of being sent to the grid, which reduces your reliance on the utility while also providing backup power when needed. Battery storage is still expensive but you may be able to reduce costs by using state incentives.
Off-grid solar system
Off-grid solar systems are not connected to the grid at all, so all of your energy needs must be met by the sun. There is no utility to fall back on. The solar installation needs to power your home not only during the day, but after dark as well, so many solar panels and a large battery system are required. These systems are often expensive and don’t make sense for homes that have access to the grid.
What are the pros and cons of installing solar panels in Iowa?
The biggest advantages in Iowa for installing solar panels is the state-based tax credit. This credit can be used in conjunction with the federal tax credit, providing major savings on system costs.
The disadvantage to installing solar panels in Iowa is that electricity prices in Iowa are low, so the payback time on the solar system will be longer here than payback periods for solar installed in other states. Also, aside from the state tax credit there is little in the way of other solar incentives or rebates available.
However, solar is still a great investment if you’re an Iowa homeowner. You’ll be kicking yourself that you didn’t get solar while the state and federal tax credits were around.
Likely cost based on an average of prices charged for solar systems of that size in the last year in Iowa or
The likely payback period on your solar panels and your investment return.
Your total lifetime solar savings based on each of the major solar finance options, a cash purchase, a cash purchase funded with a HELOC (home equity line of credit) and a zero-down PPA or third party lease product.
If you want to see all of the above but also see live pricing, the three best solar deals available in your city and
get binding quotes from each of these solar companies then use this Iowa solar panels calculator.
This calculator requires you to also input your name and contact details because most of our 200+ installer
partners will only authorize the sharing of their live solar pricing where we have validated that you are a real
homeowner with a home in their service area. We respect the privacy of your data and only share your contact details
with the solar companies you ask us to get binding quotes from.
Note: Please keep in mind that the best source of up-to-date information on incentives are the solar installers who specialize in your area.