Iowa raises solar tax credits


As the U.S. state of Louisiana awaits the results of a study into the costs and benefits of solar before setting its solar energy tariff, Iowa has increased the amount of solar tax credits available and Minnesota has drawn up the country’s first methodology for calculating a solar tariff.

The Iowa Senate voted on Thursday to raise the level of tax credits available to homeowners and businesses in a move which would boost the solar industry if the vote, by the Senate’s ways and means committee, passes into state law.

The proposal would see the annual solar tax credits available rise from $1.5 million to $4.5 million, according to a report carried on the Des Moines-based news website on Friday.

As part of the proposal, homeowners would qualify for up to $5,000 in solar tax credits – up from the current $3,000 cap – with the cap for businesses rising from $15,000 to $20,000 and all limits backdated to January 1.

The Twin Cities newspaper reported the Minnesota Public Utilities Commission (PUC) voted on Wednesday to approve the adoption of a methodology for calculating the price of solar.

The methodology, which would be the first in the U.S., was drawn up by the Minnesota Department of Commerce after a widespread consultation with stakeholders.

Solar tariff cannot undershoot retail price for three years

With the PUC decision expected to be adopted on April 1, utilities would have the option of using the new calculation method although, with a stipulation the rate cannot be lower than the retail price of electricity for its first three years and an expectation it would exceed the retail price utilities have to pay, the extent of its adoption by energy companies remains to be seen.

Under the terms of the methodology, the rate would have to be recalculated annually.

In an eventful week for U.S. solar, Baton Rouge newspaper The Advocate reported the Louisiana Public Services Commission is preparing a report into the costs and benefits of solar with the results, which will be used to work out the state’s solar tariff, expected on November 30.

The move came after commissioner Clyde Holloway withdrew a motion to remove a contentious 0.5% cap on the proportion of customers Louisiana utilities are obliged to pay for net metered solar generation.

Commissioner Holloway offered to remove the cap – which solar supporters say is based on a misinterpretation of the rules anyway – in return for shifting the burden of paying for solar infrastructure onto homes and businesses with panels rather than all power consumers.

Commissioner Holloway withdrew his motion after commissioner Scott Angelle asked for more information on the solar issue, prompting the body to commission the solar report.