Iron plating is the most basic armor upgrade for the powersuit. It is essentially a cheaper and heavier alternative to Advanced Plating to boosting the armor rating of the powersuit. The amount of armor granted depends on the slider settings chosen at the Power Armor Tinker Table. The more armor points added, the heavier the suit gets.
When one is upgrading to something better, you can remove it and use "salvage", and then get the iron back in a regular crafting grid.