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Iowa

Iowa

Incentives/Policies for Renewables & Efficiency

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Renewable Energy Production Tax Credit (Personal)   

Last DSIRE Review: 08/25/2014
Program Overview:
State: Iowa
Incentive Type: Personal Tax Credit
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Municipal Solid Waste, CHP/Cogeneration, Hydrogen, Anaerobic Digestion, Renewable Fuels
Applicable Sectors: Commercial, Industrial, Residential, Schools, Rural Electric Cooperative, Agricultural, Institutional
Amount:$0.015/kWh or $0.01/kWh for 10 years after facility begins producing energy
Eligible System Size:Iowa Code 476B: 2 MW – 30 MW generally for applications after March 1, 2008; Schools, Hospitals: Minimum 750 kW for applications after June 30, 2009
Iowa Code 476C: Non-wind facilities may be no more than 60 MW nameplate capacity. Facilities that consume energy on-site must be at least 750 kW nameplate capacity. For both wind and non-wind facilities, an individual facility's capacity eligibility is limited to 2.5 MW per qualifying owner.
Equipment Requirements:Facilities must be certified by the Iowa Utilities Board (IUB)
Carryover Provisions:Credits in excess of tax liability in a given year may be carried forward up to 7 years
Start Date:06/15/2005
Expiration Date:01/01/2017
Web Site: http://www.state.ia.us/government/com/util/energy/renewable_tax_c...
Authority 1:
Date Enacted:
Date Effective:
IA Code § 476C
6/15/2005 (subsequently amended)
6/15/2005
Authority 2:
Date Enacted:
Date Effective:
IA Code § 476B
6/15/2005 (subsequently amended)
6/15/2005
Authority 3:
IAC 199-15.18 et seq.
Authority 4:
Date Enacted:
Date Effective:
S.F. 2343
05/30/2014
07/01/2014
Summary:

In June 2005, Iowa enacted legislation creating two separate production tax credit programs for energy generated by eligible wind and renewable energy facilities. An eligible facility can qualify for only one of the two credits.

Wind and Other Renewable-Energy Facilities Tax Credit (Iowa Code § 476C)

Eligible types of renewable energy under this tax credit include wind, biogas recovery, biomass, methane gas recovery, solar, or “refuse”. The tax credit available to producers or purchasers of these types of renewable energy is in the amount of:

  • $0.015 per kilowatt-hour (kWh) of electricity,
  • $4.50 per million British thermal units (BTUs) of heat for a commercial purpose,
  • $4.50 per million BTUs of biogas or methane gas used to generate electricity, or
  • $1.44 per thousand cubic feet of hydrogen fuel generated by and purchased from an eligible renewable energy facility or used for on-site consumption.

This tax credit may be applied toward the state's personal income tax, business tax, financial institutions tax, or sales and use tax.

To qualify for the credit, a renewable energy facility must be at least 51% owned by specifically defined qualifying owners, be approved as eligible by the Iowa Utilities Board (IUB), and placed into service within 30 months of IUB approval. Furthermore, facilities must be placed into service on or after July 1, 2005, and before January 1, 2017. Renewable energy facilities may use generated renewable energy for on-site consumption and still qualify for the tax credit unless they are smaller than 0.75 megawatts (MW) (see H.F. 672).

The maximum total amount of wind-generating nameplate capacity eligible for this credit is 363 MW. The maximum total eligibility for other renewable technologies is 53 MW, with 10 MW of nameplate capacity reserved for natural gas, methane and landfill gas, or biogas cogeneration facilities incorporated within or associated with an ethanol plant engaged in the sale of ethanol to states to meet a low carbon fuel standard. An individual facility's capacity eligibility is limited to 2.5 MW per qualifying owner, and facility owners may not have an ownership interest in more than two eligible facilities. In addition, for non-wind applications filed on or after July 1, 2011, the total nameplate capacity size of the facility may not exceed 60 MW, and the facility's total capacity eligibility is limited to 10 MW.

After eligibility status is granted, the facility may apply for tax credit certificates over a 10-year period, beginning when the facility initiates energy production. Credits will not be issued for renewable energy produced or purchased for on-site consumption after December 31, 2026. Credit certificates in excess of a taxpayer’s liability for a taxable year may be carried forward for a maximum of seven years. Certificates may be transferred or sold one time to a third party, and transferred certificates may be used against a different type of tax than that noted on the original certificate.

Solar facilities taking a credit under this provision cannot claim a credit under the Solar Energy Systems Tax Credit.

Wind-Energy Facilities Tax Credit (Iowa Code § 476B)

A production tax credit of $0.01 per kWh is available for electricity generated by eligible wind energy facilities, including electricity that is sold or used for on-site consumption. In May 2011, the maximum total program eligibility was reduced from 150 MW to 50 MW.

The tax credit may be applied toward the state's personal income tax, business income tax, financial institutions tax, sales and use tax, or energy replacement generation tax.

To qualify for the credit, a wind energy facility must be approved as eligible by the IUB and placed into service on or after July 1, 2005 but before July 1, 2012. For applications filed on or after March 1, 2008, the total nameplate capacity of the facility cannot be less than 2 MW or greater than 30 MW. Applications from schools, colleges, universities, and hospitals filed on or after July 1, 2009 must have a minimum nameplate capacity of 750 kilowatts (kW). Facilities must be operational within 18 months of IUB approval to maintain eligibility status unless they file for an extension.

There are no specific ownership criteria for individual projects; however, facility owners may not own more than two eligible facilities, and must have an executed power purchase agreement or interconnection agreement (except when the electricity is used for on-site consumption).

Once the IUB determines that a facility is eligible, facility owners may apply for wind energy tax credit certificates over a 10-year period, beginning with the initial production of electricity. Credit certificates in excess of a taxpayer’s liability for a taxable year may be carried forward for a maximum of seven years. Certificates are freely transferable (i.e., they can be transferred more than once), and transferred certificates may be used against a different type of tax than that noted on the original tax credit certificate.


 
Contact:
  Brenda Biddle
Iowa Utilities Board
1375 E. Court Avenue
Des Moines, IA 50319
Phone: (515) 725-7305
E-Mail: Brenda.biddle@iub.iowa.gov
Web Site: http://www.state.ia.us/iub
 
  Public Information - Revenue
Iowa Department of Revenue
Hoover State Office Building
1305 E. Walnut
Des Moines, IA 50319
Phone: (800) 367-3388
Phone 2: (515) 281-3114
Fax: (515) 242-6487
Web Site: http://www.iowa.gov/tax/index.html
 
  Ellen Shaw
Iowa Utilities Board
1375 E. Court Avenue
Des Moines, IA 50319
Phone: (515) 725-7348
E-Mail: ellen.shaw@iub.iowa.gov
Web Site: http://www.state.ia.us/iub
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.