Guide To Going Solar in Iowa: Solar Incentives, Advocacy Organizations & More

Are you an Iowa business or homeowner interested in installing solar panels but unsure what solar incentives or resources are available in the state? Let us lay out for you what kind of incentives you can expect and groups you can turn to for more information on the state of solar energy in Iowa.

8-27-25 Update: Federal tax incentives are constantly changing.  Please reference our Solar Tax Credits & Incentives page for the most current information.  The Federal Incentives information in this article was accurate prior to the One Big Beautiful Bill being signed into law.

What Solar Incentives Are Available in Iowa

Federal Incentives

The Solar Investment Tax Credit (ITC): This tax credit is equal to 30% of the cost of the solar installation. This tax credit is a dollar-for-dollar reduction in the income taxes a person or company would otherwise pay the federal government. The eligible ITC amount is the sum of materials necessary for a solar installation, including solar panels, inverters, racking, electrical updates, installation, and energy storage of 5 kilowatt hours or greater. Through 2025, tax-exempt organizations, including non-profits and local governments, can also take advantage of this tax credit through direct payment of at least a portion of the credit amount or transfer of the credit.

Modified Accelerated Cost Recovery System (MACRS): This program governs the amount of time that businesses and agricultural operations must spread depreciation over for various pieces of equipment. For solar arrays, that time is 5 years. This accelerated depreciation allows for the tax benefits to be accrued earlier in the array’s productive life. This in turn shortens the time it takes for the array to pay for itself.

U.S. Department of Agriculture Rural Energy for America Program Grant (REAP): These grants are available for agricultural operations and rural small businesses which invest in renewable energy systems and are located in areas with a population of 50,000 or less. The grants can cover up to 50% of eligible costs of a solar project. (04/01/2026 Update – The Rural Energy for America Program will not be making further grant awards for the fiscal year. Visit the program website for full details.)

State incentives

Iowa Solar Sales Tax Exemption: This rule exempts solar panels and equipment from state sales tax, saving you 7% of the system’s cost.

Iowa Property Tax Exemption: Increases in property values stemming from adding solar panels to your property won’t increase your property’s valuation, and therefore your property taxes, for the first five years.

Solar Related Organizations in Iowa

Iowa Solar Energy Trade Association: This association is working to advance excellence in safety, quality of workmanship, and technical standards to benefit both the state’s solar industry and its clients in Iowa. Their work focuses around policy development, advocacy, education, and networking.

Iowa Environmental Council: The IEC works to build a healthy and sustainable future for all Iowans through education, advocacy, and coalition-building. They recognize climate change and environmental justice are the root causes of the challenges Iowa faces around water quality and land stewardship, and they continue to push for 100% clean energy.

Clean Energy Districts: These local institutions aim to strengthen communities by leading, implementing, and accelerating the locally owned clean energy transition. They create change through the principal strategies of energy planning, market transformation, public engagement, advocacy, and readiness.

Notable Eagle Point Solar Builds in Iowa

At Eagle Point Solar, we are headquartered in Dubuque and have extensive experience working on projects throughout the Hawkeye State, including the Des Moines, Cedar Rapids, Davenport, Waterloo and Ames areas. Here are a few of the major projects we have worked on: