Net Metering

Note: Iowa S.F. 583, enacted on March 12, 2020, makes substantial changes to net metering rules, which will go into effect by July 1, 2027, or when statewide distributed generation penetration reaches 5%, whichever is earlier; at that point value of solar methodologies will be developed. Utilities are allowed to file "inflow-outflow" tariffs in place of net metering before that date, but the compensation rate for outflow credits is equal to the volumetric retail rate until the value of solar is established. 

In May 2017, the Iowa Utilities Board approved new net metering pilot programs for MidAmerican Energy and Alliant Energy. These new programs make substantial changes to the net metering rules offered by these utilities. The maximum system size limit has been increased to 1 MW from 500 kW; however, under both programs, customers are not allowed to net meter more than 100% of their load. The two utilities measure the 100% cap differently; MidAmerican bases it on annual energy use, while Alliant bases it on maximum annual demand. The pilot programs also make changes to excess generation compensation; whereas previously excess generation was carried over indefinitely, the new programs require an annual "cash-out" where remaining excess generation is credited at an avoided cost rate.

Iowa's statutes do not explicitly authorize the Iowa Utilities Board (IUB) to mandate net metering, but this authority is implicit through the board's enforcement of PURPA and Iowa Code § 476.41 et seq. Iowa's net-metering subrule, adopted by the IUB in July 1984, applies to customers that generate electricity using alternate energy production facilities (AEPs).

Eligibility and Availability

Net metering is available to customers of Iowa's two investor-owned utilities, MidAmerican Energy and Interstate Power and Light (IPL). MidAmerican 

There is no explicit limit on either the size of a net-metered system or on total enrollment in the IUB's subrule. However, separate rule waivers have allowed MidAmerican Energy and IPL to limit individual systems to 1 megawatt (MW). Customers that have an on-site renewable energy system through an existing third-party power purchase agreement are not eligible for net metering under the existing net metering tariffs of MidAmerican and IPL. IPL also limits net metering to customers on the Residential, Farm, or General Service rate schedules, so customers on the Large General Service rate schedule (i.e., customers using more than 20,000 kWh per month) are ineligible to net meter. 

According to the IUB, net metering is available to approximately 89% of residential customers in Iowa (see Docket No. NOI-2014-0001, “Order Soliciting Additional Comments and Scheduling Workshop,” p. 6). The IUB has so far declined to assert jurisdiction over net metering policies for non-rate-regulated utilities (i.e., electric cooperatives and municipal utilities), but strongly encourages them to adopt net metering policies voluntarily.

Net Excess Generation

Although Iowa's net-metering subrule requires utilities to purchase a customer’s net excess generation (NEG) at the utility's avoided-cost rate, subsequent rule waivers allow MidAmerican Energy and IPL customers to carry NEG forward for use in future months as a kilowatt-hour (kWh) credit. The net metering kWh offset effectively provides credit at the customer's retail electricity rate; however, MidAmerican and IPL customers cannot cash out any excess credits. 

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