Property Tax Exemption for Renewable Energy Systems
Last DSIRE Review: 04/18/2013
Program Overview:
| State: | Iowa |
| Incentive Type: | Property Tax Incentive |
| Eligible Renewable/Other Technologies: | Passive Solar Space Heat, Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Photovoltaics, Wind, Geothermal Heat Pumps |
| Applicable Sectors: | Commercial, Industrial, Residential, Agricultural |
| Amount: | Solar and wind: 100% exemption for 5 years Geothermal: 100% exemption for 10 years |
| Maximum Incentive: | Not specified |
| Start Date: | 01/01/1978 |
| Authority 1: Date Effective: | Iowa Code § 441.21(8) 01/01/1978 |
| Authority 2: Date Enacted: Date Effective: | S.F. 2342 05/25/2012 07/01/2012 |
| Authority 3: | Iowa Code § 427.1 |
Summary:
In Iowa, the market value added to a property by a solar or wind energy system is exempt from the state's property tax for five full assessment years. Residential geothermal systems are exempt for 10 years. Eligible systems include (1) a system of equipment capable of collecting and converting incident solar radiation or wind energy into thermal, mechanical, or electrical energy and transforming these forms of energy by a separate apparatus to storage or to a point of use which is constructed or installed after January 1, 1978; (2) a system that uses the basic design of the building to maximize solar heat gain during the cold season and to minimize solar heat gain in the hot season and that uses natural means to collect, store and distribute solar energy which is constructed or installed after January 1, 1981; (3) a residential geothermal system, new or retrofitted, installed on or after July 1, 2012, including all equipment included in the installation or labor required for the construction, as well as the proportionate value of any well field associated with the system or attributed to the owner.
The Iowa Department of Revenue (DOR) has issued an opinion determining that the solar and wind exemption can be applied to systems whose "primary purpose" is to store or provide electricity for use at the site where the system is located. This clarifies that solar and wind systems which periodically export electricity to the grid (e.g., net metered systems) are eligible to claim the exemption as long as they are used primarily to serve on-site electricity demand.
For the geothermal tax exemption, the person claiming an exemption must submit the appropriate forms to the assessor and must file the forms no later than February 1st of the first assessment year that the exemption is requested. The exemption may be taken for tax years beginning on or after January 1, 2013.
The Iowa Department of Revenue (DOR) has issued an opinion determining that the solar and wind exemption can be applied to systems whose "primary purpose" is to store or provide electricity for use at the site where the system is located. This clarifies that solar and wind systems which periodically export electricity to the grid (e.g., net metered systems) are eligible to claim the exemption as long as they are used primarily to serve on-site electricity demand.
For the geothermal tax exemption, the person claiming an exemption must submit the appropriate forms to the assessor and must file the forms no later than February 1st of the first assessment year that the exemption is requested. The exemption may be taken for tax years beginning on or after January 1, 2013.
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