Why Spring 2026 Is the Right Time for Iowa Businesses to Choose Solar
5 Reasons to Begin Your Commercial Solar Installation Project Now
Solar power has always been a smart money move for Iowa businesses. But making the decision to start a solar project during the spring of this year has become more critical than ever.
That’s because time is running out to combine key federal solar incentives that could cut your project costs by tens of thousands of dollars. Projects that begin after July 4, 2026, will face tighter restrictions and deadlines to qualify for the benefit.
Meanwhile, a new opportunity to claim 100% bonus depreciation on the cost of your system also makes it a prime time to start the process. From tax credits to greater energy independence, here is a look at five advantages to starting your solar panel system project in the first half of 2026.
1. Qualify for the Expiring Federal Solar Tax Credit
The main reason to start the process of adding solar panels is the expiring federal Solar Investment Tax Credit. This dollar-for-dollar tax credit may cover 30% of the cost of new solar panels, installation, and battery storage. For example, if your business’s solar panel system costs $100,000 to purchase and install, you could receive $30,000 back in tax credits.
However, last year’s passage of the “One Big Beautiful Bill” drastically moved up the deadlines to qualify for this tax credit. Businesses that begin work on their projects before July 4, 2026, will have until Dec. 31, 2030, to bring their services online. Businesses that begin work after July 4 will need to place theirs in service three years sooner, by Dec. 31, 2027.
After that, the tax credit will be gone. That’s why it’s best to start working with a solar installer now. This will help ensure that your project starts in time to qualify for the tax credit and that your utility interconnection is complete before the final deadline.
2. Comply With New FEOC Rules on Solar Equipment
New guidelines are already in place that prevent projects from earning tax credits if they source a certain percentage of their materials from businesses controlled by certain countries seen as threats to the U.S.
Known as the Foreign Entities of Concern (FEOC) rule, this includes countries like China, Russia, Iran, and North Korea. Solar projects cannot use over 40% of their materials from these countries. Solar storage projects (like battery installation) have a higher threshold of 55%.
The disqualification of these materials means businesses must be careful where they source their solar products from. It also means costs may rise on the products that meet these guidelines. Supply chain shortages could occur as a result. Beginning your project sooner will help avoid higher costs and reduce the lead time to get the equipment you need.
Working with a full-service engineering, procurement, and construction (EPC) company like 1 Source Solar will ensure you have a qualified guide to the sourcing process. We handle the sourcing for you, ensuring you only receive high-quality equipment that falls within the guidelines for the tax credit.
3. Claim 100% Bonus Depreciation
While the “One Big Beautiful Bill” reduced the tax credit, it did expand another massive benefit for solar users: bonus depreciation.
Bonus depreciation allows businesses to deduct a portion of the solar project’s cost from their tax liability every year. Businesses are now able to claim up to 100% of the “depreciable basis” of their solar system over its lifespan. This can start in the first year the system goes online.
For example, a $100,000 commercial project for a company that falls in the 32% tax bracket would be eligible for $32,000 depreciation the first year the project is placed in service. In past years, it would have only been eligible for around $26,880.
Beginning your project now means you will have the best opportunity to take advantage of this benefit before it changes or goes away.
4. Get Ahead of Climbing Energy Costs
It almost goes without saying in 2026: Energy costs are rising. As the renewable energy tax credits expire, energy rates are expected to climb even more nationwide. In Iowa, residents are expected to see rising costs this winter, and experts project a continued rise in costs over the next several years.
Installing solar panels will replace some or all of this energy consumption, giving you access to renewable energy that costs you nothing to produce once your system is paid off. Learn more about how we’ve helped businesses save on solar by viewing our project portfolio.
5. Lock in Iowa’s State Solar Incentives
While Iowa’s statewide solar tax incentives are not expiring this year, going solar in 2026 will make sure you fully receive the benefits the state does offer.
Currently, Iowa offers a 100% sales tax exemption on all purchases of solar energy equipment. This will save you 6% to 7% on the purchase of your materials.
The state also exempts new solar installations from causing your property tax valuation to rise for the first five years. This will reduce increased taxes as you’re paying off your solar system.
In addition, Iowa has rules in place that allow for net metering with many utility companies. Net metering is a process that allows you to sell excess energy that you produce during peak times back to energy companies. In exchange, you receive credits that help you pay for electricity when you need it during off-peak times.
Talk With Our Solar Installation Experts Today
Are you ready to lower your electric bills, gain more energy independence, and tap into a clean, renewable energy source? Reach out to the team at 1 Source Solar today.
We’re happy to talk about your unique needs and put together a free solar project quote to show you how much you can save.