The Inflation Reduction Act and what it means for Iowa

posted on Wednesday, August 10, 2022 in Energy News

IEC joins those in Iowa and around the nation in celebrating this week’s passage of the Inflation Reduction Act (IRA). Though the name wouldn’t seem to align with environmental efforts, this historic legislation includes the largest-ever package addressing climate issues through clean energy investment, renewable energy tax credits, and much more. 

The bill is complex and far-reaching, and many – including our staff – are digging into the specifics. But here’s what we know at the outset:  

  • The Inflation Reduction Act of 2022 will address record inflation by paying down our national debt, lowering energy costs, and lowering healthcare costs.  
  • The Act makes progress on climate goals, including reducing emissions by 40% by the year 2030 and will go a long way to help the U.S. in international climate negotiations.  
  • The Act centers decreasing dependence on foreign energy and supply chains as a matter of national security and increasing U.S. energy production and jobs. 

So what does it do for Iowa? 

Iowans will benefit from many of the Act’s energy security and climate change programs in the next decade. First up are tax credits. The Inflation Reduction Act will return the wind and solar tax credits for both utilities and consumers for 10 years; projects that invest in low-income or tribal communities could receive an enhanced credit.

Consumers will now be able to get credits for 30% of expenses for rooftop solar, heat pumps, and small wind energy systems through 2032. “These tax credits can be more easily used by nonprofits like cities, counties, and rural electric cooperatives which will be game-changing for rural ratepayers,” says Kerri Johannsen, IEC’s Energy Program Director.  

The IRA also provides a stand-alone storage tax credit for the first time ever. Combined with the other tax credits, this provides a major incentive for U.S. manufacturing of these technologies and benefits accruing to coal plant and disadvantaged communities. 

Iowans can also expect to access some incredible EV tax credits: $7,500 for a new car, and $4,000 for a used car with income-based caps to claim these. It also provides incentives to U.S. manufacturers, with billons allocated to build new clean-vehicle manufacturing facilities.  

Energy efficiency and building decarbonization programs will also help to drive down energy costs for the average Iowan, helping to ease the pressure on pocketbooks around the state. The IRA will provide $9 billion in consumer home energy rebate programs to pay for electric appliances such as heat pumps, or energy efficiency retrofits.  

"The jobs and economic development that will come from this bill are substantial, exciting, and game-changing. They will bolster Iowa's manufacturing economy AND our farm economy, creating the good jobs that will see us through the next decade," says Johannsen.  

What's next?

The bill still must pass through the House and be signed by President Biden, which is anticipated to happen in the coming weeks. Next, state officials, leadership, and others will begin the work of operationalizing the many facets of the bill for local communities and individuals. Groups like IEC and others will help move the benefits of this legislation forward to improve the livelihoods of all Iowans. 

Some have spoken out against the more negative elements of the legislation, such as allowing oil and natural gas leasing on federal lands. Like many other public policy initiatives both federally and locally, IEC understands that compromise is a key part of legislative work. Not everything we want is included, and some things we don't like remain in effect. However, we believe it is a solid start.

Says Johannsen, "Environmental organizations like ours will make every effort to advance the good parts of this bill and address what still needs work. We're excited to add these tools to our toolkit to accelerate the reduction of greenhouse gases, improve our climate, create good local jobs, and make Iowa a better place to live, work, and explore."  


If you are interested in speaking to an IEC staff member about the Inflation Reduction Act for a story, please contact Angelisa Belden, IEC Communications Director, at

  1. clean energy
  2. electric vehicles
  3. energy efficiency
  4. environmental justice
  5. renewable energy
  6. solar power
  7. solar tax credits
  8. wind power
  9. wind tax credits