The state of solar development in Iowa can be evaluated by key factors such as federal and local regulations, incentives, grid interconnection and integration. The current state of development activity in Iowa is growing and can be seen in this analysis summarizing all facets of solar energy project development.
We will break down the various federal and state incentives available to solar energy developers in Iowa and how to access them.
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Iowa Solar Energy Activity
Iowa has a promising pipeline for future utility-scale solar development with 105 MW capacity for 1 planned project, 2,996 MW capacity for 21 queued projects, and 172 MW capacity for 8 site control projects. Overall, if all planned, queued, and site control farms go into operating status, Iowa will expand its capacity by 3,273 MW. In Iowa, the average solar farm size is 34 acres, producing 4.6 MW of electricity under ideal conditions. So a solar farm in Iowa needs an average of 7.4 acres per MW of capacity.
In recent years, the decreasing costs of solar technology have led to a notable increase in solar initiatives and setups throughout Iowa, and the recent emergence of state and federal policies have played a significant role in promoting solar development since 2019. The aforementioned utility-scale solar projects added to the queue from 2019 onwards is attributable to implementation of the federal Investment Tax Credit (ITC) and the Inflation Reduction Act (IRA) in 2022. The commercial ITC amounts to 30% of the invested basis in eligible property that initiated construction before the end of 2019. The IRA outlined an ITC extension to 30% for solar system installation.
The adoption of solar energy is particularly prominent in rural regions like Washington County, where farms and rural businesses have taken the lead, while cities such as Cedar Falls and Ames have successfully implemented community solar projects. Furthermore, solar energy has gained traction on a statewide level, evident in the fact that by the end of 2020, every one of Iowa's 99 counties had solar projects that benefited from the state's initial solar tax credit.
The potential for solar energy to assume a more substantial role in Iowa's energy mix has grown significantly in recent years, as indicated by the expanding number of solar projects across the state. By October 2021, Iowa boasted a greater amount of small-scale distributed solar capacity than many neighboring Midwestern and Plains states. As of March 2022, Iowa had approximately 200 MW of installed solar capacity.
In the context of the U.S. Energy Information Administration (EIA), "net generation" refers to the total electricity produced by an energy source, excluding the power used in the generation process. The EIA gathers and publishes net generation data for various energy sources, such as solar (shown above) providing valuable insights into the U.S. energy production landscape and aiding energy-related decision-making and policy planning. In Iowa specifically, net generation for utility-scale solar projects has dramatically increased as of late, and is projected to continue rising as the aforementioned planned, queued, and site control farms go into operating status.
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