Are solar panels worth it in Iowa?

7 factors to consider before getting solar panels in Iowa

ConsumerAffairs has heard from thousands of solar customers who have already gone through the installation process, including several from Iowa. Here’s what to consider before making the switch.

1. Solar panel installation costs
2. Your energy consumption
3. Iowa solar incentives
4. Net metering buyback rates
5. How long you stay in your house
6. How you pay
7. The solar company you hire

1. Solar panel installation costs: $10,000 to $30,000

Average solar panel costs in Iowa are comparable to the national average. Before the federal solar investment tax credit (ITC), a typical residential system ranges from $15,600 to $31,200. That price drops to $10,920 to $21,840 after the full 30% tax credit.

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In Iowa, the average cost per watt is $3.12.

Average solar installation cost by system size in Iowa

2. Your current energy consumption

This may seem obvious, but solar panels generate electricity. So, you get the most out of solar if most of your appliances are electric. If you also have an electric vehicle, solar panels will save you even more. However, they won’t help you save on gas bills.

Getting your electrical loads as low as possible first is smart. That way, you can get a smaller, cheaper system overall. If you have older electrical appliances, upgrade those before investing in solar panels.

Homeowners with solar panels typically save $20,000 to $90,000 over 25 years.

A typical Iowa household needs a 10.19 kW system to offset its electrical needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption. Once you know your current energy consumption, you can calculate your potential savings and the time it should take for your solar installation to pay for itself.

3. Iowa solar incentives: federal and state

Residential solar systems are no longer eligible for state tax credits, but you can still take advantage of the federal solar investment tax credit (ITC). The ITC provides a 30% tax credit on your total system costs, including equipment, labor and permits.

For example, let’s say you spend $10,000 going solar. The ITC would be worth $3,000. If you owe $15,000 in federal taxes the year your system becomes operational, the ITC will cut that down to $12,000. You can also combine the iTC with additional Iowa solar incentives, like local rebates and net metering credits.

4. Net metering in Iowa: retail buyback rate

Sometimes, your solar panels might generate more electricity than your household can use. Net metering lets you sell that extra to the local power grid. It also lets you sell extra energy generated by solar panels back to the local power grid.

Most utilities in Iowa offer a 1:1 credit, meaning you receive one credit for every kWh you send back to the grid. At the end of the year, any remaining credits are typically rolled over to the next year or, in some cases, may be compensated at a predetermined rate (often the utility's avoided cost rate).

Overall, net metering in Iowa provides a valuable incentive for homeowners to invest in solar energy by allowing them to offset their electricity costs and maximize the benefits of their solar system.

» GREENEST STATES: Iowa ranked 13th in 2024

5. How long you plan to stay in your house

It takes years for electric bill savings to make up for the initial cost — about 10 years on average in Iowa. If you sell your house and move before then, you might not fully realize the financial benefits of your solar investment.

Solar panels last 25 to 30 years.

A Zillow study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years, according to Zillow. But, you miss out on some of that $46,588 in total avoided utility costs over 25 years.

In other words, don't get solar panels just because you want to sell your house soon. Consider a home improvement project with a better return on investment, like remodeling the bathroom or kitchen, instead.

6. How you pay

Given rising energy costs in Iowa and elsewhere, financing solar panels makes sense as long as your monthly loan payment is less than what you would be paying the utility company anyway.

A solar loan works like most other types of loans — there is an application process, and you pay it back over time with interest. Using a home equity line of credit or loan to finance a solar installation can be another option. Leasing solar equipment or entering a power purchase agreement can minimize the initial cost, but you won’t be eligible for the federal solar tax credit.

» SOLAR PANELS: Lease vs. buy

7. The solar company you hire

We’ve heard from several solar customers in Iowa. In the best-case scenario, it’s easy to make the switch and you’re happy with your system’s performance. In the worst-case scenario, you end up paying thousands for mid-tier solar equipment from a company with poor customer service and no follow-up or support.

Some Iowa homeowners told us about issues with poor installation and a lack of ongoing support. That's why it’s so important to consider all the aspects before making such a significant investment. Otherwise, you won’t might not get as good of a deal you’re expecting.

Monthly costs: solar payments vs. savings

Going solar isn’t just a green move; it's often a smart money move. With electricity costs continuing to rise, more and more Iowa homeowners are finding that solar power is financially worth it in the long run.

» BEST STATES FOR SOLAR: Iowa ranked 35th in 2024

Is my house a good candidate for solar panels?

Going solar ends up being worth it for many homeowners as long as their house is a good candidate to support the panel installation. We suggest using NREL’s PVWatts Calculator to estimate how much electricity solar panels can produce over a year on your house. Project Sunroof is another free solar savings estimator powered by Google Earth imagery. Here’s what else to think about before you commit:

• How much sunlight do I get? Solar panels need regular exposure to sunlight to produce the most energy possible. Iowa averages 3.5 to 4.5 peak sun hours each day. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient.
• What is the size and angle of my roof? Iowa (and the rest of the United States) is in the Northern Hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.
• What is the condition of my roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels.

Pros and cons of solar panels in Iowa

According to Jared in Fairmount, seasonality affects how much your solar energy system saves you each month. “We did not have to pay for electricity our first three months, and then we've had a greatly reduced last two months,” he said. “Living here in the Midwest, you catch as much sun as you can in the summer and whatever you can in the winter is kind of gravy.”

Benefits of solar panels in Iowa

• Cheaper energy bills: The average homeowner in Iowa uses a lot of power, which adds up to a lot of savings when you switch to solar. Going solar now means that your monthly energy expenses will be more predictable (and very often significantly lower).
• More energy independence: Solar panels also protect you from future energy cost increases. With battery storage for backup, you won’t have to worry so much about losing power during winter storms.
• Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Solar panels generate electricity from sunlight, a clean and renewable energy source. Installing solar panels on your roof helps the environment primarily by reducing greenhouse gas emissions and dependence on fossil fuels.
• Higher home resale value: Installing solar panels can significantly increase a home's value. According to the study mentioned above, houses with solar panels sell for 4.1% more on average. The exact increase in value varies by location, with homes in active solar markets sometimes seeing even higher boosts.

Drawbacks of solar panels in Iowa

• Solar equipment is expensive: Even with rebates and other financial incentives, the price typically starts between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage. Solar battery costs are generally between $7,000 and $18,000. Getting a solar battery might be strategic if net billing rates continue to decline in Iowa. That way, you can store energy at home instead of tapping into the local grid when needed.
• Potential roof leaks: The installation process involves drilling holes into the roof to anchor the panel mounting systems. If not done correctly, this can lead to leaks or structural damage.
• Energy production varies: Solar panels are dependent on weather conditions and seasonality. Solar panels still work on cloudy days, but less available sunlight does affect how efficiently they produce energy. Snow cover may also temporarily reduce efficiency until it's removed or melts off.

» MORE: Solar energy pros and cons

Find solar companies in Iowa

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Iowa’s top solar companies to learn more.

Bottom line: Is going solar in Iowa worth it for you?

For a lot of homeowners, solar panels end up being worth it as long as their cost savings over time outweigh the initial investment. Others are happy to go solar for the environmental benefits alone.

Solar costs vs. savings: Iowa and nearby states