Iowa allow a sales tax exemption for solar, wind, and hydroelectricity equipment. As of March 2021, the Iowa sales tax rate is 6%.
For wind energy the exemption includes the total cost of wind energy equipment and all materials used to manufacture, install, or construct wind energy systems. The exemption does not apply to equipment used to construct a plant to manufacture wind energy systems.
Effective July 1, 2006, solar energy equipment is also exempt from the state sales tax. Solar equipment means any equipment that is used to convert incident solar radiation to energy, or equipment used to transform the converted energy to storage or to some point of use.
In May 2013 a sales tax exemption was also added for hydroelectricity conversion equipment. This includes, but is not limited to, generators, turbines, powerhouses, intakes, coffer dams, walls, water conduits, tailraces, other concrete components, electric equipment substations, poles, wires, transformers, breakers, and switches used to convert water, water power, or hydroelectricity to a form of usable energy.