More small-scale solar projects could sprout under Iowa proposal

Companion bills that would encourage small-scale solar energy generation across Iowa by establishing a community solar program advanced last Thursday from subcommittees in the Iowa House and Senate.

The bills would allow small solar fields, built in brownfield sites on top of commercial warehouses or in underutilized crop or pastureland, to connect to the grid and to be purchased by the surrounding community.

House Study Bill 629 and Senate Study Bill 3092 would allow electric utility customers to voluntarily invest in community solar projects and receive credits on their utility bills in proportion to the energy generated by the solar projects and the size of their investment in the project.

The bill was opposed by large electric utilities as well as municipal and cooperative utilities in the state. These groups argued the bill would lead to a “cost shift” that would raise utility rates for customers who do not participate in the community solar projects.

Karl Rábago, speaking on behalf of the Coalition for Community Solar Access, said community solar allows customers to “become direct economic investors” and that projects add “more reliable” and affordable electricity generation to the grid. Plus, he said farmers can “diversify their revenue streams” by putting up some solar fields on their properties.

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“This is a bill that offers you an opportunity to make the system become more diverse, more affordable, more reliable, more competitive and more job creating than it is today,” Rábago said.

Onnalee Gettler, speaking on behalf of MidAmerican Energy Company, said the bill would create a “mandated subsidy” and utility companies would be obligated to purchase solar energy at “a price much higher than other available sources.”

Gettler said the costs would pass directly to customers. Additionally, she said the consumer protection clauses in the bill were “likely a false comfort” since the community solar organizations would not be regarded as a public utility.

Rábago said certain elements of the bill, like an initial, statewide program cap at 250 megawatts and requirements that customer credits could not be greater than the retail rate of electricity, would help to mitigate the risk of “improper cost shifts” from subscriber customers to nonsubscriber customers.

Ted Stopulos, representing Alliant Energy Corporation, echoed some of Gettler’s concerns and suggested lawmakers amend the bill to prohibit cross subsidization “to protect nonparticipating customers.”

“We do believe that the way the language is currently drafted is essentially a bridge to nowhere,” Stopulos said.

Christopher Rants, speaking on behalf of the Iowa Solar Energy Trade Association, said there would be no “cross subsidization” as the utilities alleged, because the future demand for electricity in the state is more than what the existing utilities can generate.

He said the problem is that utilities can only make a profit when they generate the electricity with one of their infrastructure projects.

“If a farmer generates solar that goes onto the grid, that means (the utilities) don’t have to generate it – that’s a benefit to everybody, because then we don’t have to pay that advanced rate of return,” Rants said. “They get to buy that electricity and then resell it — problem is they don’t get to make a profit on it.”

According to the U.S. Department of Energy, 24 states have enacted community solar-enabling legislation. A bill similar to those debated Thursday was introduced and advanced through the House in 2025, but did not see a floor debate.

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Tony Phillips, also speaking on behalf of the Coalition for Community Solar Access, said the language in the bill represents a “compromise” based on conversations on the bill in past years and on lessons learned from other states that have adopted community solar programs.

“Iowa missed the opportunity to be on the front end of this, but I think we have an opportunity to do this the best,” Phillips said.

The bill was additionally supported by environmental groups, including the Sierra Club Iowa Chapter and the Iowa Environmental Council, as well as the Center for Rural Affairs and Walmart Inc.

Labor unions that work on electric transmission projects opposed the project, as did the Iowa Association of Business and Industry.

Sen. Dawn Driscoll, R-Williamsburg and Sen. Kerry Gruenhagen, R-Walcott, who served on the subcommittee, signed off on the bill and said it needed to go before the Senate Commerce Committee for further discussion.

The House version of the bill also advanced from subcommittee Thursday.

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This article was first published by Iowa Capital Dispatch.