Property Tax Exemption for Renewable Energy Systems
Administered by Iowa Department of Natural Resources
In Iowa, the added property value from a solar or wind system is exempt from property tax for 5 full assessment years, and residential geothermal systems installed on or after July 1, 2012 are exempt for 10 years. Net-metered systems qualify as long as they primarily serve your on-site electricity use. For geothermal, file the required forms with your local assessor by February 1 of the first assessment year you want the exemption.
You can tell customers that solar, wind, and residential geothermal installations won't raise their property taxes for 5 years (solar and wind) or 10 years (residential geothermal), which lowers the long-term cost of a project. Systems must be designed primarily to serve on-site electricity needs, though occasional grid export such as net metering is acceptable. For geothermal, customers must submit the forms to their assessor by February 1 of the first assessment year, and eligible geothermal costs include equipment, installation labor, and the proportionate well field value.
This is a state property tax exemption that removes the market value added by qualifying solar, wind, and passive solar systems for 5 full assessment years, and by residential geothermal systems for 10 years, so it works through reduced assessed value rather than a direct payment. Eligible systems include active solar and wind equipment installed after January 1, 1978, passive solar designs installed after January 1, 1981, and new or retrofitted residential geothermal systems installed on or after July 1, 2012. An Iowa DOR opinion allows grid-connected systems whose primary purpose is serving on-site demand, and geothermal claimants must file forms with the assessor by February 1 of the first assessment year; the program covers residential, commercial, industrial, and agricultural sectors.
Program details
- Program ID
- 184
- Effective
- 1/1/1978
- Last updated
- 11/4/2025
Eligibility
- Sectors
- commercial industrial residential agricultural
- Technologies
- solar - passive solar water heat solar space heat solar thermal electric solar photovoltaics wind (all) geothermal heat pumps wind (small)
Program summary
In Iowa, the market value added to a property by a solar or wind energy system is exempt from the state's property tax for 5 full assessment years. Residential geothermal systems are exempt for 10 years. Eligible systems include:
- a system of equipment capable of collecting and converting incident solar radiation or wind energy into thermal, mechanical, or electrical energy and transforming these forms of energy by a separate apparatus to storage or to a point of use which is constructed or installed after January 1, 1978;
- a system that uses the basic design of the building to maximize solar heat gain during the cold season and to minimize solar heat gain in the hot season and that uses natural means to collect, store, and distribute solar energy which is constructed or installed after January 1, 1981; and
- a residential geothermal system, new or retrofitted, installed on or after July 1, 2012, including all equipment included in the installation or labor required for the construction, as well as the proportionate value of any well field associated with the system or attributed to the owner.
The Iowa Department of Revenue (DOR) issued an opinion determining that the solar and wind exemption can be applied to systems whose "primary purpose" is to store or provide electricity for use at the site where the system is located. This clarifies that solar and wind systems which periodically export electricity to the grid (e.g., net-metered systems) are eligible to claim the exemption as long as they are used primarily to serve on-site electricity demand.
For the geothermal tax exemption, the person claiming an exemption must submit the appropriate forms to the assessor and must file the forms no later than February 1st of the first assessment year that the exemption is requested.
Contact & resources
- Contact email
- energy@iowaeda.com
Please verify current program details with the administering agency before making any financial decisions.
