With IA Solar Tax Credit Expired, Focus Shifts to Payment Backlog
Monday, January 17, 2022
Iowa's tax credit for installing solar-energy systems is no longer in place, but lawmakers still face pressure to provide payments to those who were on a waiting list.
The credit was allowed to expire at the end of 2021 - and with the money set aside for residential installments already spent, those who applied but hadn't been paid were out of luck.
The Iowa Department of Revenue says more than 1,400 applications were ultimately denied. But Nick Summers - policy organizing assistant with the Center for Rural Affairs - said these property owners each made a substantial investment, hoping it would be offset by the credit.
"The state's failing to uphold its side of the deal," said Summers. "And we know the state has the means to pay this out, because the State of Iowa is sitting on a $1.2 billion surplus."
That surplus estimate was issued in the fall, and larger figures are now being floated as the legislative session gets underway.
The credit for installing a residential solar system averaged $3,200, with the average installation cost at more than $25,000. During debate about extending the credit, Republican lawmakers suggested it didn't align with need to implement broader tax relief.
Slater resident Lee Tesdell had received credits for solar-power installations on his farm, although he had to pursue legal channels to secure the second reimbursement. He called cutting off payments "shortsighted," noting that gains in renewable energy can't come only from large wind and solar farms.
"It seems to me that the state would be wise to encourage the distributed type," said Tesdell, "so that individuals can be manufacturing some of their own electricity at home."
He said combined with federal credits, the Iowa reimbursements covered a significant portion of his investments.
Meanwhile, the state says businesses on the waiting list will still get their credits, but no new projects can be added.
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