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 before Halloween 2024. A decision to wait until next year just might come back to haunt you.
In order to claim the 30% Federal Solar Tax Credit on your 2024 taxes, your qualifying solar project must be fully installed and operational by December 31, 2024.
515 Solar is a local business that sources USA-made materials and does all of our own installations, so we complete projects faster than most solar companies in central Iowa. However, we still advise our clients to expect a 6-8 week 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 the end of October in order to ensure that your project will be completed and turned on by the end of the year.
But this Halloween, there's a lot more on the line... 💀
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 If the IRA is repealed or its unspent funds rescinded, the future availability of the Federal Solar Tax Credit may be at risk.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.
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.
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.
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 in 2024.
Call 515-461-7982, email support@515solar.com, or complete the form below to get started with a free quote and onsite solar assessment.
As long as we get the process started in October, we should be able to get your new solar panel system installed and operational by the end of the year. But if you miss the Halloween deadline, let's just hope that we'll be treated with another great year to go solar in 2025.