Is Solar Worth It in Iowa in 2026?
Iowa's sun is better than most people assume — Des Moines panels produce around 1,354 kWh per installed kilowatt per year, a respectable number for a northern state at 41.9 degrees latitude. The problem in 2026 isn't the sun. It's that two supports Iowa solar buyers used to lean on are both gone at once: the 30 percent federal tax credit expired for installs completed after December 31, 2025, and Iowa's own state solar credit was already closed to residential installations back in 2022. No federal credit, no state credit, and electricity here is cheap by national standards at 13.7¢ per kWh. That's a tough combination for payback math.
None of that means solar is a bad idea everywhere in Iowa — it means the decision needs real numbers, not a pitch built around incentives that no longer apply. A high-usage home with an unshaded south-facing roof on MidAmerican's or Alliant's system can still pencil out over 15-20 years. A smaller system on a low-usage home in a weaker export program may never fully pay for itself. This page gives you Iowa's actual numbers so you can tell which one you are.
Iowa Electricity Prices Are Rising, Just Slower
Solar is a bet that your utility bill keeps climbing. Here's the honest version of that bet in Iowa, using federal EIA data going back decades.
Full Iowa electricity price data (1990–2025)
| Year | Iowa (¢/kWh) | US avg (¢/kWh) |
|---|---|---|
| 1990 | 7.8 | 7.8 |
| 1991 | 7.8 | 8.0 |
| 1992 | 8.0 | 8.2 |
| 1993 | 8.0 | 8.3 |
| 1994 | 8.1 | 8.4 |
| 1995 | 8.2 | 8.4 |
| 1996 | 8.2 | 8.4 |
| 1997 | 8.2 | 8.4 |
| 1998 | 8.4 | 8.3 |
| 1999 | 8.4 | 8.2 |
| 2000 | 8.4 | 8.2 |
| 2001 | 8.4 | 8.6 |
| 2002 | 8.4 | 8.4 |
| 2003 | 8.6 | 8.7 |
| 2004 | 9.0 | 9.0 |
| 2005 | 9.3 | 9.5 |
| 2006 | 9.6 | 10.4 |
| 2007 | 9.5 | 10.7 |
| 2008 | 9.5 | 11.3 |
| 2009 | 10.0 | 11.5 |
| 2010 | 10.4 | 11.5 |
| 2011 | 10.5 | 11.7 |
| 2012 | 10.8 | 11.9 |
| 2013 | 11.0 | 12.1 |
| 2014 | 11.2 | 12.5 |
| 2015 | 11.6 | 12.7 |
| 2016 | 11.9 | 12.6 |
| 2017 | 12.3 | 12.9 |
| 2018 | 12.2 | 12.9 |
| 2019 | 12.5 | 13.0 |
| 2020 | 12.5 | 13.2 |
| 2021 | 12.7 | 13.7 |
| 2022 | 13.2 | 15.0 |
| 2023 | 13.3 | 16.0 |
| 2024 | 13.4 | 16.5 |
| 2025 * | 13.7 | 17.3 |
Source: US EIA, average residential retail electricity price. Values in cents per kWh. * 2025 is preliminary.
Iowa residential electricity averaged about 13.7¢ per kWh in 2025 (EIA preliminary), up roughly 48 percent since 2005. That's real growth, but slower than the national trend — over the last decade the pace has been about 1.7 percent a year. That matters for payback: every cent your rate sits below the national average is a cent less that solar saves per kWh produced. Cheap power is good for your monthly budget and mildly bad news for how fast a rooftop system pays for itself.
The Iowa Sun, Month by Month
At 41.9°N, Iowa sits well north of the Sun Belt, so winter sun angle and shorter days cut production hard for a few months. But long summer days largely make up for it over a full year, which is how Des Moines still lands around 1,354 kWh per kW annually — a solid number for a state that gets real winters.
Iowa monthly solar production data
| Month | kWh per installed kW |
|---|---|
| Jan | 91 |
| Feb | 102 |
| Mar | 119 |
| Apr | 121 |
| May | 128 |
| Jun | 124 |
| Jul | 135 |
| Aug | 131 |
| Sep | 120 |
| Oct | 112 |
| Nov | 96 |
| Dec | 76 |
| Year | 1354 |
Source: NREL PVWatts typical-year estimate (Des Moines), per installed kW at latitude tilt.
The practical read: May through August carry your production, with June the peak thanks to long daylight hours, even though summer haze trims peak intensity a bit. December and January are the weak months — a fraction of summer output. If your bills spike with winter heating rather than summer AC, that's exactly when panels produce least, which is one more reason to size a system around annual usage, not your worst monthly bill.
What Solar Costs in Iowa in 2026
Most Iowa installs run about $3.00 to $3.20 per watt in 2026, a reasonable midpoint across aggregator data (SolarReviews around $2.90/W, EnergySage around $3.21/W, ConsumerAffairs around $3.29/W, with some outlier quotes as high as $3.67-$3.87/W). With no federal or state credit available to a residential buyer, that quoted price is essentially your out-of-pocket cost, minus whatever discount you negotiate directly with the installer.
| System Size | Typical 2026 Cost | Roughly Offsets | Fits |
|---|---|---|---|
| 5 kW | $15,000 to $16,000 | ~6,770 kWh/yr (~$77/mo at 13.7¢) | Smaller home, lower usage |
| 8 kW | $24,000 to $25,600 | ~10,830 kWh/yr (~$124/mo) | Average Iowa home |
| 12 kW | $36,000 to $38,400 | ~16,250 kWh/yr (~$186/mo) | Large home, electric heat or heavy usage |
Iowa's sales tax exemption knocks the state's 6 percent sales tax off your equipment — panels, inverters, mounting hardware, and monitoring gear qualify, though labor and standalone battery storage are generally treated separately. That's the only price offset built in before any installer discount, since neither the federal nor the state income-tax credit applies to a residential system in 2026.
Estimate Your Iowa Payback
The calculator below is set to Iowa's average rate and Des Moines-area sun production. Enter your own monthly bill to see an estimated system size, payback period, and 25-year outlook. Iowa rates have risen about 1.7 percent a year over the last decade — a reasonable starting point for the inflation field, though you can drag it higher or lower to see how sensitive your payback is to future rate hikes.
Iowa Solar Incentives That Still Exist in 2026
Here's what actually survived into 2026, and what didn't.
- Gone — the 30 percent federal credit: The federal Residential Clean Energy Credit ended for installations completed after December 31, 2025, with no phase-out period. If a quote still nets out a 30 percent credit, the installer is using outdated numbers.
- Gone — Iowa's state solar tax credit: Iowa's Solar Energy System Tax Credit dropped to a 0 percent rate for installations placed in service after December 31, 2021, and the Iowa Department of Revenue is explicit that residential installations are no longer eligible. A narrow legacy path remains only for businesses that began construction before January 1, 2022, capped at $20,000 — irrelevant to a 2026 homeowner.
- Still here — Iowa sales tax exemption: Qualifying solar equipment is exempt from the state's 6 percent sales/use tax, with no announced sunset.
- Still here — Iowa property tax exclusion (441.21(8)): The detail most generic guides miss. Iowa excludes the system's own added value from your assessment for 5 full assessment years, no application required. Separately, for buildings specifically, any increase in the building's market value from housing solar is permanently excluded — most of your solar-driven home value increase escapes property tax indefinitely, not just for five years.
- Partially — leases and PPAs: Third-party-owned systems can still capture the separate federal 48E business credit through 2027, but it belongs to the leasing company, not you. It may lower your monthly lease payment; it may just pad their margin. Compare a lease quote against a cash or loan purchase before assuming it's the better deal.
How Solar Export Credits Work in Iowa: Net Billing vs. Inflow-Outflow
Iowa does not have a single statewide "net metering" law the way many states do. Instead, the Iowa Utilities Commission requires rate-regulated utilities to offer a choice between two tariffs: Net Billing, where you pay full retail for everything you use and get kWh credits (not dollars) for what you export, banked against future usage; or Inflow-Outflow, where you pay full retail for consumption and separately get a dollar credit at the utility's outflow purchase rate — a rate that runs well below retail.
Which one you get depends on your utility. MidAmerican Energy runs Rate IO, an Inflow-Outflow-only program approved in November 2020, and its dollar credits carry forward but can expire if unused. Interstate Power & Light / Alliant Energy offers a choice between Rate IO or a Net Metering Pilot (Rate NM), both approved December 2020 — installers commonly describe Alliant's pilot as close to a 1-for-1 kWh swap, with banked credits cashed out annually. Municipal utilities and rural co-ops sit largely outside IUC jurisdiction and set their own terms — call and ask before assuming either program applies to you.
One more thing worth knowing before you sign a 20-year payback estimate: Iowa Code 476.49(4) requires the IUC to build a formal "value of solar" methodology once statewide distributed-generation penetration hits 5 percent, or when a utility petitions after July 1, 2027 — whichever happens first. Penetration was already around 3.3 percent as of April 2025. Industry sources are already flagging a possible 2027 shift to a less generous export structure, so today's credit rate is not guaranteed to hold for the life of your system.
How to Go Solar in Iowa
Work through these steps before you sign anything.
- Pull your last 12 months of bills and find your true average monthly usage — Iowa's winter heating and summer cooling loads both spike, so a single month will mislead you.
- Confirm your roof faces south, east, or west with minimal shading. At this latitude, orientation and shading matter more than in sunnier states.
- Call your utility and ask whether you'll be on Net Billing or Inflow-Outflow, and get the current export rate in writing — this one variable swings your payback more than anything else here.
- Get at least three quotes and compare price per watt, not just the total — make sure none still assumes a federal or state tax credit that no longer applies.
- Check your roof has at least 10-15 years of life left before committing; re-installing panels on a new roof later costs thousands.
- Run your numbers through the calculator above under both a Net Billing and an Inflow-Outflow assumption, and weigh the payback against how long you plan to stay in the home.
For how solar panels work, system sizing, and buying versus leasing in general, see our main solar panels guide. For questions about your roof's condition before mounting anything on it, see our roofing guide. If your panels change your service panel or you're adding battery storage, see our electrical guide.
Sources
Figures on this page reflect 2026-current research. Electricity rates: US EIA, Electric Sales, Revenue, and Average Price (2025 values preliminary). Production estimates: NREL PVWatts. Net Billing / Inflow-Outflow rules: Iowa Utilities Commission — On-site (Distributed) Generation and the DSIRE Net Metering (Iowa) listing. State tax credit closure: Iowa Department of Revenue — Solar Energy System Tax Credits. Property tax exclusion: Iowa Code 441.21(8) and the DSIRE property tax exemption listing. Installed cost estimates: EnergySage and SolarReviews Iowa local data pages. We review these figures every six months.