Iowa Environmental Council praises extension of federal solar tax breaks
The Iowa Environmental Council, in a new blog posting, details how Congress’ extension of federal clean energy tax breaks will help Iowa.
The extension means that Iowa’s program will continue because it is tied to the federal aid.
“These tax incentives have been a significant driver for wind and solar development in Iowa to date, helping the state become a renewable energy leader,” wrote Nathaniel Baer, who follows energy issues for the council, which supported the bill. “The extensions approved by Congress today will drive further growth, and better position Iowa to build on that leadership.”
The bill:
- Extends the 30 percent upfront solar credit for 2017, 2018 and 2019.
- Phases out the solar credit by reducing it to 26 percent in 2020 and 22 percent in 2021.
- Reduces the solar business credit in 2022 to 10 percent while the residential credit expires.
- Extends the full wind production tax credit in 2015 and 2016.
- Phases out the wind credit by reducing it by 20 percent in 2017, 40 percent in 2018 and 60 percent in 2019. The credit expires after 2019.
“Tax incentives are key policies for renewable energy,” wrote Baer. “Because renewable energy has no fuel cost and very little operating cost, nearly all of the costs of developing a solar or wind project are upfront. Tax incentives like the solar investment tax credit help offset upfront costs, while the wind production tax credit provides a revenue stream over time for wind projects.”
The state’s match will be 50 percent for solar projects in 2016.
The combined Iowa and federal incentives offset nearly half the upfront cost of solar, Baer noted.
Read the full blog item online.