A strong advanced energy economy has taken hold in Iowa, and the sector is poised for growth. Iowa is already a national leader in wind power. Many businesses have set up shop to take advantage of existing wind resources, the state’s competitive business climate, and its strong manufacturing culture. Iowa-based companies contribute to the sector throughout the entire supply chain, including engineering and research, manufacturing and assembly, installation, sales, and distribution, as well as finance, legal, and other professional services. This type of cluster-based development enables logistical cost savings and efficiencies that give firms a competitive advantage in national and global clean energy technology markets.
Iowa has also started exploring solar energy options. A cluster-based approach, similar to what has occurred in the wind energy sector, could leverage the state’s substantial solar resources and create lucrative job opportunities for residents. Given Iowa’s proven success in cluster-based advanced energy development, the state could galvanize these strengths to enhance existing and emerging advanced energy industries, including solar. Facilitating growth and development would help active energy sectors innovate, retain, and attract businesses to Iowa, and create good-paying jobs in the state.
By encouraging technological innovation in the wind and solar sectors, the state will be able to satisfy the demand for advanced energy products from a strong in-state market, and become a key player in regional, national, and international markets. To facilitate growth, Iowa policymakers could enact policies that increase demand for wind and solar in the state and help Iowa businesses remain competitive. With the right policies, Iowa’s wind and solar industries can support up to 18,000 jobs annually between 2016 and 2030.
Summary of Policy Recommendations
The analysis presented in this report culminates in recommendations for Iowa’s leaders based on best practices in the United States and abroad. Each set of recommendations identifies opportunities for barrier removal and future growth in the solar and wind sectors. While the recommendations are intended to be complementary and would be powerful if adopted as a package, each can also be viewed as a stand-alone option.
Require Integrated Resource Planning and Collaboration: Foster collaboration of investor-owned utilities, municipal utilities, rural cooperatives, and community stakeholders by implementing Integrated Resource Plans (IRPs). IRPs encourage energy providers to meet forecasted annual peak and energy demand through a combination of supply-side and demand-side resources that guide future generation, energy efficiency, transmission, and distribution investments.
Attract Wind Turbine Assembly Companies: Expand Iowa’s role in the wind supply chain by drawing additional turbine manufacturers to the state through the development of various incentive programs.
Modernize Transport Pathways to Improve Wind Turbine Export: Remove key transportation barriers by optimizing roadways and waterways in Iowa for wind transportation.
Encourage Distributed Wind Turbine Deployment: Expand the production of distributed wind energy into the local market through distributed generation carve-outs, a small wind tax credit, and an anemometer loan program.
Encourage Foreign Direct Investment: Draw in foreign companies to boost wind investments within Iowa. Iowa can utilize its tremendous access to waterways to export wind products.
Enable PACE Financing: Mitigate the high upfront costs of solar for customers by allowing property owners to finance investments in solar panels with a loan that is repaid through their property tax bill.
Establish Refundable Tax Credits for Public Entities: Allow public entities such as schools, hospitals, municipalities, and rural cooperatives to directly benefit from solar investment and production tax credits.
Improve Solar Net Metering: Ensure all Iowans have equal access to solar energy development opportunities by extending the net metering requirement to municipalities and rural cooperatives, increasing the net metering cap or instituting a capacity limit, and allowing aggregate and virtual net metering.
Enact Legislation Establishing Third-party Solar Financing: Create policy certainty and market stability by codifying the Iowa Supreme Court’s holding allowing third-party solar within the state.
Enable Local Communities to Benefit from Community Shared Solar Projects: Allow customers to pool resources and invest in a single shared renewable energy system, especially in areas without adequate sunlight for individual solar systems and for customers based in multi-unit buildings.
Innovation Ecosystem and Access to Capital
Allow Capital Gains Tax Exemption for Early-stage Investors: Incentivize investment by allowing investors to fully realize all capital gains from investments in early-stage solar and wind companies.
Establish a Matching Grant Program for Awardees that Receive Federal Funding: Assist businesses moving to the commercialization stages of their businesses by matching federal incentive programs. Iowa can create efficiencies in administering the grant program by coupling its initiatives with federal programs.
Create an Equity Crowdfunding Hub: Build venture capital investment in Iowa by allowing larger numbers of investors to contribute small amounts through an online investment platform.
Create Tax Credits to Promote Employment and Training Opportunities in Advanced Energy: Establish a system that provides tax credits to employers who employ qualified workers and who offer specialized training to workers.
Encourage Apprenticeships in the Wind and Solar Industry: Establish a specific tax credit to incentivize apprenticeships that promote industry-recognized certifications.
Establish a Renewable Energy Education Strategic Fund for Targeted Curriculum Enhancement and Pre-Employment Training: Create clear pathways for young workers to pursue careers in renewable energy. A targeted curriculum can be used by educational institutions to train workers to meet the developing needs of local businesses, making the candidates much more attractive for future employment.
Upgrade Worker Skills Through Stackable Credentials: Generate a stackable credential system whereby Iowans can continually develop their technical skills to meet evolving workplace needs.