What do this farmer and banker have in common, besides a love for our rural Iowa community and county?
Locally owned solar power.
It brings jobs, wealth, light and a healthier home place everywhere it goes. Solar is happening right here in our home county of Winneshiek: farms, businesses, households and institutions are literally owning the future, one panel at a time (we’re probably over 25,000).
How can Iowa’s legislators give a major solar stimulus boost to every county and community in Iowa, in a very cost-effective manner?
Strengthen and continue Iowa’s solar tax credits. Decouple from the federal credit, pay off the two-year waitlist and raise the cap (more details below). There is room in the budget, and this is an investment that will reach into every corner of our state where people still have a can-do attitude and spirit of self-reliance, which is just about everywhere.
What’s at stake?
Prosperity, plain and simple. Non-metro counties and communities across Iowa are in desperate need of tools to promote economic activity and wealth creation and retention. Locally owned solar is a powerful mechanism to create and retain wealth over generations, and Iowa’s tax credits are a powerful tool to drive that solar investment.
Do they really work?
You bet. In Winneshiek County, we have seen at least $18 million invested in over 350 privately owned solar systems in recent years. These systems will keep far more than $35 million in energy savings on local balance sheets, and create more than 200 jobs (many of which already are visible on the half-dozen growing solar contractor crews).
This is the tip of the iceberg of what’s possible in Winneshiek County. More importantly, this level of impact is possible in every Iowa county. With supportive policy, solar energy is like a prosperity bunny — it keeps going and going and growing.
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So what exactly needs to be done? First, decouple the Iowa solar tax credit from the federal solar tax credit, which has already begun to phase out (even though the recent federal budget deal pauses that phaseout by two years). Decoupling would ensure Iowa continues to incentivize locally owned solar prosperity regardless of what happens in Washington.
Second, pay down the waiting list, and raise the cap. The annual $5 million cap on the Iowa solar credit has a waiting list of roughly two years, which (as the contractors, bankers, and farmers will tell you) largely defeats the incentive purpose of the credit. The Legislature should allocate funds to both pay down the waitlist, and to at least double the annual cap so we don’t end up in the same position again.
Finally, the Legislature should strongly consider making the credit transferable and/or refundable, to benefit non-taxable entities and those with little tax liability. Local governments and school district investments in solar benefit all citizens, and create stronger budgets and more resilient communities. Nonprofit companies and churches are also critical in rural communities, and will be strengthened with access to solar energy and solar tax credits.
Together, we have seen the tremendous impact of locally owned solar prosperity in our community and county. Iowa policymakers know they can’t solve every problem, and some might be wary of tax credits. But in the universe of policies under consideration, the solar tax credit gets high marks for its universal creation of opportunity throughout Iowa, and for its bang for the buck returns in stimulating local investment, job creation, and long-term wealth retention.
Take it from this farmer and banker: Solar tax credits work for all Iowans. We encourage our legislators to act quickly and decisively to strengthen and improve Iowa’s solar tax credit.
Andy Johnson raises grass-fed livestock and Christmas trees in rural Winneshiek County. He is also executive director of the Clean Energy Districts of Iowa, and Winneshiek Energy District, and has worked to promote locally owned clean energy for a decade. Larry Grimstad is retired president of Decorah Bank and Trust, a part-time farmer in retirement and founding board member of Winneshiek Energy District. DBT has actively engaged in solar finance for many years, including dozens of projects and millions in loans, and recently launched a new online branch called greenpenny, which invests depositor funds entirely in clean energy projects.