By Jian Chen, Hongli Feng, Elizabeth Hoffman, and Luke Seaberg
In 2022, Iowa ranked first in the United States for percentage of state electricity produced by wind energy, which contributed 62% of its net electricity generation (USEIA 2023a). In contrast, in 2023, Iowa ranks 34th in solar generation, which represents only 1% of its total electricity generation (Glover 2023).
Over the past two decades, solar energy systems have improved in efficiency and declined in cost of installation. At present, solar energy represents the most economical option for electricity generation based on the metrics of the average levelized cost of energy (USEIA 2023b). Given the availability and consistency of high-quality solar natural resources across Iowa, coupled with its cost-effectiveness, solar energy can play a crucial role in attaining Iowa’s established goal of reaching 100% clean power by 2035 (IEC 2021) and further driving down electricity rates.
This article briefly explores the development of solar energy systems in Iowa, describes a range of policies concerning solar energy development at the federal and local levels, and summarizes a sample of Iowans’ preferences for and interest in solar energy systems.
An overview of solar energy systems in Iowa
Iowa’s first operable utility-scale solar photovoltaic (PV) power plant, the Cedar Falls Solar Farm in Black Hawk County, went online in April 2016 with an electricity generation capacity of 1.5 megawatts (MW). Prior to 2016, distributed facilities aimed at satisfying individual power needs produced the only solar PV power in Iowa. However, as shown in figure 1, between 2016 and 2022, Iowa experienced rapid growth in utility-scale solar energy, with the commissioning of 16 utility-scale solar PV power plants and total nameplate capacity growing from 3.3 MW to 261.1 MW. Throughout the same period, Iowa averaged a 33% annual increase in distributed solar energy systems, which expanded from 44.5 MW to 224.2 MW.
Source: Inventory of Operating Generators (2023), and Electric Power Monthly (2016–2022), US Energy Information Administration.
Based on ownership structures, we can categorize utility companies into three main types: investor-owned, municipal, and cooperative. Investor-owned utilities are typically driven by profit motives, municipal utilities are community owned and prioritize local interests, and cooperatives are democratically governed by their members. In 2022, 16 utility-scale solar PV power plants were in operation: 8 by investor-owned utilities, 5 by municipal utilities, and 3 by cooperatives. These operable utility-scale solar PV power plants had a combined capacity of 147.6 MW for investor-owned utilities, 108.5 MW for municipal utilities, and 5 MW for cooperatives. The Energy Information Administration categorizes distributed solar facilities by sectors based on where and how customers utilize the energy. By 2022, Iowa had distributed solar installations with capacities of 116.8 MW in the residential sector, 126.5 MW in the commercial sector, and 9.9 MW in the industrial sector, which indicates that solar growth has happened under all ownership structures.
Figure 2 depicts the distribution of utility-scale and distributed solar PV capacities in Iowa as of 2020. Aggregated at the county level, a total of 13 counties had distributed solar PV capacity greater than 1 MW, the threshold level often used to define a utility-scale power plant. The geographical distribution of distributed solar PV capacity has high spatial alignment with the allocation of Iowa cities (i.e., the state’s population centers). To be specific, among Iowa counties, Black Hawk, Polk, and Linn were the top three in distributed solar installation in 2020 with capacities of 9.8 MW, 6.4 MW, and 5.3 MW, respectively. At that time, the average capacity per county in Iowa was 0.6 MW.
Note: Lawrence Berkeley National Laboratory did not report the installed capacity of distributed solar energy at the county level for the years following 2020.
Source: Utility-scale solar PV capacity data is from the US Energy Information Administration Inventory of Operating Generators (2023); Distributed solar PV capacity is from the Open Energy Data Initiative, Lawrence Berkeley National Laboratory.
Utility-scale solar energy in Iowa continues growing at an accelerating pace. According to the Midcontinent Independent System Operator public interconnection queue, as of August 2023, there are 34 utility-scale solar PV projects in the pipeline. Of these, 7 are under construction, and 27 are at the planning and investigation stage. These proposed utility-scale solar projects vary significantly in generation capacity, ranging from 1.4 MW to 400 MW, with a combined nameplate capacity of 4,634 MW. This represents a 17.7-fold increase compared with the 2022 level. Figure 3 shows the location and capacity of the proposed utility-scale solar PV projects. Notably, these proposed projects are mostly located in the regions that are close to or within proximity of Iowa’s population centers, where the demand for electricity is higher than in more rural areas. Locating solar projects near these population centers can reduce transmission costs and make it easier to deliver clean energy to customers. While data on future rooftop solar installations in Iowa is unavailable, Wood Mackenzie forecasts an average annual growth rate of 8% for rooftop solar installations across the nation between 2025 and 2028 (SEIA 2023b).
Source: Midcontinent Independent System Operator public interconnection queue dataset, accessed August 2023.
Federal and state policies and incentives
Solar energy, both utility-scale and distributed, has received and will continue to receive substantial support at the federal and local levels. According to the Database of State Incentives for Renewables Efficiency, as of August 2023, Iowa has seven active state-level programs, including financial incentives and regulatory policies, that are applied to solar PV energy. Most of these programs (i.e., five out of the seven) primarily target distributed solar energy with support and incentives related to sales taxes, access policies, property taxes, net metering, and interconnection. Additionally, there are two active programs supporting utility-scale solar energy development: the renewable portfolio standards and the mandatory utility green power option. In 1983, Iowa became the first US state to establish Renewable Portfolio Standards, and met its target of 105 MW renewable energy generation capacity in 1997 (NREL 2013). At the federal level, there are 16 active programs, including four geared towards utility-scale solar energy systems in the form of grants and green power purchasing options. Eleven of these initiatives are applicable to distributed solar energy systems related to corporate tax exemptions/credits, personal tax exemptions, corporate depreciation, interconnection, loan programs, and grant programs. Furthermore, there is one program, the corporate tax credit, that applies to both types of solar energy systems.
The most notable federal policy is the 2022 Inflation Reduction Act (IRA). This act extends and enhances several tax incentives and credits for both types of solar installations. Specifically, the IRA extends the existing production tax credit (PTC) and investment tax credit (ITC) for eligible renewable energy sources, and introduces a new tech-neutral clean electricity PTC and ITC set to take effect in 2025. The new clean electricity PTC provides a credit of 1.5 cents per kWh for electricity produced, sold, or stored at facilities placed into service after 2024, provided they have zero or negative GHG emissions. Meanwhile, the clean electricity ITC offers a 30% credit of the investment in the year the facility is commissioned, allowing small projects under 5 MW to include interconnection costs. Moreover, until 2034, the IRA also will provide a 30% tax credit for residential and commercial solar projects. As projected by SEIA (2023a), the IRA is expected to result in 48% more solar development over the next 10 years than would have occurred without it. As to the impacts in Iowa specifically, Miller (2023) suggests that the IRA has fueled a growing interest in distributed solar energy in the state, with the number of interested customers increasing between 10% and 100%, depending on the power company.
Public perspectives on solar energy in Iowa
Public opinions on solar energy vary considerably. Advocates argue that solar power holds great potential for a clean energy future due to its ability to harness abundant sunlight, reduce emissions, create local jobs, and contribute to energy independence and stability. However, there is also opposition to solar energy mostly due to concerns over land use, aesthetics, and potential negative environmental impacts. Some argue that large solar farms alter rural landscapes and agricultural practices, while others raise questions about the disposal of PV panels at the end of the life of a solar project and their overall environmental footprint.
These contrasting views are evident in Iowa. While utility-scale solar energy has rapidly developed in Iowa, residents’ opposition to it has garnered headlines in some regions. For instance, concerns about aesthetics and potential impacts on agriculture have led residents in the cities of Coggon and Palo to resist large-scale solar projects coming to Linn County (Payne 2021). In another instance in 2021, the Palo City Council voted to oppose NextEra Energy Resources' plans for a 1,780-acre solar farm located between Palo and Pleasant Creek. However, the project gained approval from Linn County supervisors in 2022, leaving city officials and residents frustrated with the decision (DMR 2023).
General public practices and preferences on solar energy systems in Iowa
To further investigate the general public’s preferences regarding various types of solar energy systems, including rooftop and utility-scale solar, we conducted an online survey related to solar and land uses in Iowa. We distributed a total of 1,552 survey invitations to Iowa’s general public and received 716 completed responses, a 46.1% response rate. Figure 4 shows the regional distribution of the survey responses, closely reflecting the population distribution across regions in Iowa.
Note: The division of regions follows the classification used by the Iowa League of Cities.
Our survey findings reveal a relatively consistent pattern of rooftop solar participation across various regions within Iowa. As shown in figure 5, a small percentage of respondents reported that they have installed solar panels at their place of residence. Among these regions, the Northeast, North Central, and Southeast regions exhibit the highest rates of rooftop solar adoption, with participation rates of 7%–8%. For those respondents who have not yet adopted rooftop solar systems but are open to the idea in the near future, we found the percentage of respondents who are willing to adopt rooftop solar (18%–27%) is much higher than the actual participation rates (figure 5). In other words, there seems to be great unrealized potential in rooftop solar adoption across Iowa regions, likely driven by increasing awareness of the economic and environmental benefits of solar energy, as well as local incentives to promote rooftop solar adoption.
On the one hand, utility-scale solar projects hold great potential in meeting electricity demand and reducing dependency on fossil fuels. On the other hand, utility-scale solar projects also have significant impacts on surrounding landscapes and communities and there can be very different attitudes towards utility-scale solar. Such attitudes will be critical in determining whether a community will host a solar project. When asked “How strongly do you support your jurisdiction hosting utility-scale solar projects?” there are some regional differences in the degree of support; however, the majority of the respondents answered “Moderately,” “Very,” or “Extremely” in all regions (figure 6). Our survey is consistent with the survey conducted by the Tarrance Group in 2022, which shows that the majority (68%) of respondents of Iowa voters support new solar projects (BFI 2022). Respondents that indicate they do not support hosting utility-scale solar projects account for less than 10% of all respondents in five of the seven regions. In the two remaining regions, non-supporters account for 11% and 14% of respondents. Despite the regionally similar trends, there are some differences. For example, the Southeast region has the most respondents (45%) very strongly or extremely strongly supporting hosting solar versus 24% of respondents in the South-Central region.
As to the drivers and challenges of utility-scale solar, our survey results suggest that respondents rate-reduced electricity bills as the most significant driver associated with the adoption of utility-scale solar projects within local communities (35%), closely followed by reduced carbon and other air pollutant emissions (32%). Meanwhile, about 32% of the respondents identified land use concerns, specifically the potential loss of farmland, as the primary challenge associated with the adoption of utility-scale solar energy systems, with an additional 31% expressing concerns about high initial investment costs, including construction costs. These regional differences are likely to determine the spatial adoption patterns of solar energy in Iowa in the near future.
To summarize, Iowa has experienced significant growth in solar energy development in recent years, and this trend is expected to accelerate further. Policy support, especially the Inflation Reduction Act of 2022, and technological advancement have made solar energy more cost competitive. This expansion has the potential to not only diversify the state's electricity landscape but also to keep the state’s electricity rates among the lowest in the nation. Nevertheless, diverse perspectives on the benefits and costs of solar energy exist among residents, communities, and the state, implying tough decisions regarding its development and prioritization. Our survey-based findings reveal that while residents show significant interest and support for solar energy development, particularly in utility-scale projects, the current participation rate in rooftop solar is actually much lower than the expressed interest of Iowa residents. This discrepancy underscores the opportunities and potential for further solar energy expansion in Iowa.
References
Bright Future Iowa (BFI). 2022. “The Tarrance Group Survey Memo.” Available at https://brightfutureiowa.com/wp-content/uploads/2022/02/Iowa-Summary-Memo_final-Copy.pdf.
Des Moines Register (DMR). 2023. “Iowa Residents Contend Solar, Wind Projects Get in the Way of Their Communities’ Growth.” Des Moines Register March 7, 2023. Available at https://www.desmoinesregister.com/story/money/agriculture/2023/03/07/iowa-wind-solar-farms-opposition-prompt-statewide-restrictions-legislature/69924871007/.
Glover, E. 2023. “The Best and Worst States for Solar Energy 2023.” Forbes February 24, 2023. Available at https://www.forbes.com/home-improvement/solar/best-worst-states-solar/.
Iowa Environmental Council (IEC). 2021. “Council Sets Goal to Reach 100% Clean Power in Iowa by 2035.” Available at https://www.iaenvironment.org/newsroom/energy-news/council-sets-goal-to-reach-100-clean-power-in-iowa-by-2035#.
Miller, J.B. 2023. “Inflation Reduction Act Creating ‘Uptick’ in Interest for Iowa Solar.” The Gazette April 9, 2023. Available at https://www.thegazette.com/energy/inflation-reduction-act-creating-uptick-in-interest-for-iowa-solar/.
National Renewable Energy Laboratory (NREL). 2013. “Iowa State Summary: EERE Investment in Iowa.” Available at https://www.nrel.gov/docs/fy13osti/57712.pdf.
Payne, K. 2021. “Utility-scale Solar Project Draws Opposition from Some Linn County Residents.” Iowa Public Radio November 30, 2021. Available at https://www.iowapublicradio.org/ipr-news/2021-11-30/utility-scale-solar-project-draws-opposition-from-some-linn-county-residents.
Solar Energy Industries Association (SEIA). 2023a. “Impact of the Inflation Reduction Act.” Available at https://www.seia.org/research-resources/impact-inflation-reduction-act.
Solar Energy Industries Association (SEIA). 2023b. “Solar Market Insights Report 2023 Q3.” Available at https://www.seia.org/research-resources/solar-market-insight-report-2023-q3.
US Energy Information Administration (USEIA). 2023a. “Iowa State Energy Profile.” Available at https://www.eia.gov/state/print.php?sid=IA.
US Energy Information Administration (USEIA). 2023b. “Levelized Cost of New Generation Resources in the Annual Energy Outlook 2023.” Available at https://www.eia.gov/outlooks/aeo/electricity_generation/pdf/AEO2023_LCOE_report.pdf.
Suggested citation
Chen, J., H. Feng E. Hoffman, and L. Seaberg. 2023. "Solar Energy Surge in Iowa: Policies, Public Opinion, and Future Opportunities." Agricultural Policy Review Fall 2023. Center for Agricultural and Rural Development, Iowa State University. Available at: https://agpolicyreview.card.iastate.edu/fall-2023/solar-energy-surge-iowa-policies-public-opinions-and-future-opportunities.