If you've ever considered going solar to take advantage of big tax breaks and cost savings, heed our expert advice: get the process started now. A decision to wait may lead come back to haunt you.
What Is the Halloween Solar Deadline?
In order to claim the 30% Federal Solar Tax Credit on your taxes, your qualifying solar project must be fully installed and operational by December 31 of the same tax year.
515 Solar is a local business with hundreds of installation professionals, so we complete projects faster than most solar companies in central Iowa. However, we still advise our clients to expect a 2-3 month turnaround time from the date they sign their contract to the date their new solar panel system is turned on.
Therefore, you should have your contract signed by October in order to ensure that your project will be completed and turned on by the end of the year.
Why this Halloween Is Spookier Than Usual
1. What will the 2024 elections mean for the future of the 30% Federal Solar Tax Credit?
Small-scale solar energy generation has a good measure of bipartisan support in Iowa and throughout the US, but the the Federal Solar Tax Credit (ITC) extension is part of the 2022 Inflation Reduction Act (IRA), and the IRA vote was split down party lines. If the IRA is repealed or its unspent funds rescinded, the future availability of the Federal Solar Tax Credit may be at risk. The Federal Solar Tax Credit allows home and business owners to recoup 30% of the costs of new solar projects. Without it, the financial benefits of going solar would be significantly reduced.
There are myriad additional ways that the 2024 presidential, congressional, state, and local elections may impact the solar industry by causing shifts in consumer buying power, interest rates, manufacturing costs, and the overall economy.
2. How long will Iowa utility companies continue to pay you back for solar?
Most Iowans get their electricity from MidAmerican Energy or Alliant Energy, both of whom currently have true 1:1 net metering (NEM) agreements. This means that the utility company will give you credit for the excess power produced by your solar panel system, which can be used to pay your electric bill. As long as you install the right amount of solar panels to meet your energy requirements (AKA a 100% offset), you shouldn't have to pay the utility company anything for your electricity other than a small monthly service charge of about $10.
However, in many US states, NEM agreements are being phased out to reduce the benefits and savings potential for new solar customers. Homeowners who went solar during NEM 1.0 (first phase) are typically grandfathered in and are able to retain their existing lucrative buyback terms. But customers who go solar in later NEM phases (NEM 2.0, 3.0, and beyond) aren't able to save nearly as much as those who made the decision during NEM 1.0.
Iowa's current NEM rules can be changed change on July 1, 2027 or when statewide distributed generation penetration reaches 5%, whichever comes first. Customers who go solar prior to this date will be grandfathered in and retain their 1:1 net metering rates. Therefore, it is strongly advised that Iowa customers should go solar now, before NEM agreements are changed so that they can lock in the best terms.
3. Will the cost of going solar stay as low as it is now?
In the first half of 2024, the cost of going solar decreased for the first time in 4 years thanks to the growth of US solar panel manufacturing. Future prices are nearly impossible to forecast as they are heavily influenced by government incentives, inflation, and supply chain conditions.
The cost of not going solar, however, is easier to predict.
By waiting to go solar, not only could you miss out on the 30% federal tax credit and 1:1 net metering, but you will also be subject to rapidly rising utility bills and a less reliable electrical grid.
Can I still get installed before changes take place?
For all of the reasons mentioned above, the 515 Solar team is busier than ever, but we remain committed to helping as many Iowans as possible go solar while today's fantastic incentives and pricing remain available.
Call 515-461-7982, email support@515solar.com, or complete the form below to get started with a free quote and onsite solar assessment.
