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Expanding IA's Solar Tax Credit Seen as Economic Boost During Crisis

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Monday, November 23, 2020   

DES MOINES, Iowa -- Iowa hasn't seen as much economic pain as some other states during the pandemic, but many residents and small businesses are still struggling.

Supporters of expanding the state's solar tax credit say it could help with any recovery from the crisis. The reimbursement budget for Iowa's credit is capped at $5 million annually, and with many homeowners and businesses investing in solar panels, there's a waiting list to get return dollars from the state.

Cody Smith, policy associate at the Center for Rural Affairs, said that's why the Legislature should consider modifications. He noted immediately paying those on the waiting list, while increasing the cap, would help a lot of Iowans hurting right now.

"Now that we have this economic problem caused by the coronavirus pandemic, this solar tax credit could help put money back into the pockets of people who own those small businesses on main street, and people who have already invested in renewable solar energy," Smith contended.

Smith asserted Iowa should also decouple from the federal incentive, given the ongoing uncertainty surrounding that plan.

Rep. John Forbes, D-Urbandale, said he'll advocate for an expansion in the next session. But he warns its future could depend on the upcoming budget forecast, and whether small businesses see more declines from the crisis.

He also wondered whether Republican leaders will consider the idea.

Certain sectors of Iowa's economy, such as manufacturing, have held steady, but Forbes said smaller consumer-driven businesses like restaurants are still seeing pain.

Dwight Dial, a farmer from Lake City, said trying to get by in this environment is tough. He installed a solar array in 2018, and he said the benefits from that investment are helping.

"My purpose of sustainability is that I am able to farm next year, that I can financially keep going," Dial emphasized. "And the solar unit has made it feasible."

Dial said his operation's energy costs have gone down considerably in a roller-coaster year for Iowa farmers.

But he's still waiting on state reimbursement for his solar purchase, and he said getting that would help pay off the initial investment, bringing more stability.

Those calling for changes say increasing the cap to $10 million not only helps those on the list, it would encourage others to take advantage, creating more demand for the solar industry.

Disclosure: Center for Rural Affairs contributes to our fund for reporting on Budget Policy and Priorities, Environment, Hunger/Food/Nutrition, and Rural/Farming. If you would like to help support news in the public interest, click here.


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