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New Legislation Benefits Municipal Utility Solar Projects

Posted By IAMU, Wednesday, June 24, 2015


The end of the Iowa 86th General Assembly saw a flurry of activity, including the passage of HF 645 that makes municipal utilities eligible for renewable energy tax credits.  Governor Branstad will be signing the bill into law Friday in a formal signing ceremony that IAMU staff will be attending.

IAMU worked with many stakeholders throughout the session on passage of this legislation.  Municipal utilities could use these tax credits to reduce the cost of energy produced by a solar photovoltaic (PV) array owned or contracted for by the utility.  Many municipal utilities are considering building community solar arrays or utility scale solar, and this tax credit could provide benefits. 


Iowa Code chapter 476C has provided transferable tax credits for renewable energy production to eligible entities since July 1, 2005.  The tax credit is available for electricity generated from renewable sources, as well as several non-electricity renewable energy sources.  For renewable electricity production, the tax credit is 1.5 cents per kWh generator for ten years.  Until now, municipal utilities were not eligible to receive the tax credit.  Investor owned utilities and rural electric cooperatives are also eligible for the tax credit.

HF 645 also adds 10 MW of generating capacity that is eligible for the tax credit, and reserves this for solar PV systems that are owned or contracted for by utilities.  The solar arrays can each be up to 1.5 MW in nameplate capacity.  Because the tax credits are transferable, municipal utilities can utilize the tax credit to make a project more attractive.

An expected use of the tax credits is to assist in the development of utility-led community solar projects.  In a municipal utility community solar array, the utility sponsors the construction of a central solar array, and customers subscribe to receive energy from the array.  Community solar allows any customer to invest in solar, achieve economies of scale compared to multiple small arrays, and allows the system to be optimized for capacity and energy production.

Apply Soon

There is significant interest in community solar projects across the state, and it is expected that the 10 MW of capacity reserved for utility solar projects will be used up quickly.  Municipal utilities developing a solar project are urged to submit an eligibility certification application to the IUB as soon as possible.    For information about the application process, please see the IUB’s website:  For information on how the tax credit may apply to a project your utility is considering, please contact Joel Logan at IAMU at or 515.289.1999.

Tags:  Energy Efficiency  HF 645  Legislative  Solar 

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