Iowa solar rebates and incentives: 2026 guide

Iowa doesn't offer the strongest solar incentive programs out there. But that doesn't mean solar isn't worth it—especially if your electric bills are eating up a big chunk of your monthly budget.

Solar's real value isn't about rebates. It's about taking control of your electricity costs for the next 25-30 years. As utility rates continue their steady climb, locking in lower energy costs now can deliver substantial savings over time. Even without robust state programs, many Iowa homeowners with decent sun exposure and moderate to high electric bills find that solar still pays for itself. Here's how you may be able to lower your solar costs in Iowa—and whether it makes sense for your home.

Unfortunately, Iowa doesn't offer many incentives for solar. But if your electric bills are high, going solar can still make sense.

Iowa offers a sales tax exemption for solar equipment—that’s 6% savings on the cost of materials. Keep in mind that energy storage equipment such as batteries are excluded from this financial incentive, as is the cost of labor. 

Iowans also get a break on their property taxes. Installing solar panels increases the value of your home, which means that your property taxes increase too. But in Iowa you don’t have to pay taxes on the higher value of your home for the first five years after you go solar.

If you connect your solar panel system to the grid, the largest Iowa utilities offer solar buyback programs.

Alliant Energy (aka Interstate Power and Light) offers an excellent buyback program known as  net metering. The company works like a bank for your solar power. If your solar panels produce more electricity than your home needs at a given time, your system will send the excess power to the grid, and IPL gives you an energy credit. When the sun isn't shining and you need to pull electricity from the grid, the utility draws against those credits. 

Depending on the weather, your energy use, and your solar setup, net metering makes it so you will owe very little, or even nothing, on your electric bill with solar panels. If you have excess credits at the end of a monthly billing cycle, they’re carried forward to the next month, in perpetuity, with no financial penalty. This is really the ultimate solar incentive, and greatly speeds up your payback period.

MidAmerican Energy calculates their buybacks differently, but it’s still a great deal for solar customers. Instead of awarding energy credits for each kWh of excess solar, they offer dollar-based bill credits.

In practical terms, this isn’t a very important distinction for any MidAtlantic customers planning to go solar in the next year or two—you will (most likely) be grandfathered into this consumer-friendly rate plan for some time. But in 2027, the policy will be revised and may become much more akin to net billing, which devalues rooftop solar power significantly. 

The rest of the state’s electric cooperatives and municipal utilities aren’t required to provide a net metering option to residents, although many do.

Iowa doesn't offer any state-specific battery incentives.

In Iowa, solar batteries don’t make a ton of financial sense because the solar buyback programs are so consumer friendly. However, you can use your solar battery to store excess electricity generated by your solar panels, which gives you power to rely on during power outages or blackouts when your solar energy system is automatically shut off by your utility company for safety reasons.