Community Wind Policy
The Community Wind Act was introduced in October 2011 by Senators Al Franken (D-MN) and Jon Tester (D-MT). The bill provides long-term certainty to community wind projects over the next 5 years by expanding the existing small wind investment tax credit to projects with capacity up to 20 megawatts (MW). A 30 percent investment tax credit is currently available for wind turbines with nameplate capacity of no more than 100 kilowatts. The Community Wind Act amends this credit by expanding it to projects with total capacity of no more than 20MW. There is no restriction on turbine size. In October 2011, a support letter was sent to Senators Franken and Tester, signed by nearly 250 industry companies and supporting organizations.
The full text of the bill is available online here.
Since its inception in the 2002 Farm Bill, REAP has opened new markets for wind power in agricultural and rural communities. Through its network of state Rural Development offices, the USDA manages REAP, providing grants and loan guarantees to agricultural producers and rural small businesses to install qualifying renewable energy systems. REAP is the only Farm Bill program focused solely on energy development for rural small businesses, farmers and other agricultural producers. The grants are limited to $500,000 or 25 percent of project costs, whichever is less. REAP also provides seed money funding for feasibility studies to help launch locally owned projects and grant and loan guarantees to entities that will assist agricultural producers and small rural businesses by providing information on renewable energy development assistance.
In 2011, REAP approved 55 awards for wind power development projects in 23 states. Additionally, REAP's new feasibility study program granted awards for 15 wind projects in six states, thereby continuing to sow the seeds for new community wind projects.
With the increasing pressure to reduce federal spending, however, financial support for REAP has been reduced in annual appropriations. From 2010 to 2012, REAP funding was reduced by 75 percent. The small wind industry strongly supports REAP as a means for rural businesses and facilities to take advantage of their local wind resource for energy security and environmental sustainability. Unfortunately, in July 2012 the U.S. House of Representatives Committee on Agriculture eliminated mandatory funding for Farm Bill energy programs.
Passed in 1978 by Congress, PURPA was designed to help the United States reduce dependence on foreign oil and to promote alternative energy sources and energy efficiency and to diversity the electric power industry. PURPA requires electric utilities to purchase electricity produced from qualifying power producers (frequently using renewable or natural gas resources).
Under current law in most states, qualifying facilities under PURPA and other state-defined renewable generators may use electricity they generate to offset simultaneous electricity consumption at their facility. Any excess generation is purchased at a lower wholesale or avoided cost rate, and any excess consumption is purchased at a higher retail rate. This difference can be significant. Net metering allows these customer-generators to "spin the meter backward," using their excess generation to offset retail purchases during other parts of the billing period rather than selling it back at a lower wholesale rate. The customer is billed only for the net electricity consumed over the entire billing period. The effect is to increase the effective value of the excess generation, often by a factor of three to four. In most states with net metering, excess generation beyond what the customer uses to offset consumption during the billing period is sold to the utility at avoided cost or granted back to the utility without payment to the customer.
The U.S. Fish & Wildlife Service (FWS), as part of the U.S. Department of Interior, has oversight of regulations governing the development of renewable energy projects on public lands, but its policies and regulations can also have direct impacts on development of private lands. While the mission of the FWS is to protect wildlife and habitats, the Department of Interior has multiple missions, one of which is to promote renewable energy development on public lands.
In February 2011, FWS released a draft document related to wind turbine siting: Draft Voluntary, Land-Based Wind Energy Guidelines. This guidance document significantly deviated from the consensus recommendations developed by the Federal Advisory Committee (FAC), which included representatives of the wind industry, states, wildlife conservation organizations, scientists, tribes and federal officials. AWEA submitted comments on the Land-Based Wind Energy Guidelines and comments in May 2011 stating that the guidelines should not apply to distributed and community-scale wind energy projects. In July 2011, FWS released a revised version of the guidelines in response to the public comments received and held a meeting to receive feedback from the FAC and the public. AWEA again submitted comments on this revised version in August, reiterating that the guidelines should not apply to distributed and community-scale wind projects and that the costs associated with adhering to the guidelines are prohibitive for smaller scale projects and would stall or prevent the development of small-scale wind energy.
In September 2011, AWEA again submitted comments on a new revised draft of the guidelines, recommending a temporary exclusion for this class of wind turbines and projects for a two-year period while the limited existing studies and additional data are collected and scientifically reviewed. During this period, guidelines appropriate to this class of installations would be cooperatively developed, using a similar multi-stakeholder process that has been applied to the commercial wind farm applications. This recommendation was not adopted in the final guidelines document.
FWS released the final version of the guidelines in March 2012. Final wording as it relates to small wind turbines and community wind projects includes:
“The Guidelines are designed for ‘utility-scale’ wind energy projects…A developer of a small or community-scale wind project may find it useful to consider the general principles of the tiered approach to assess and reduce potential impacts to species of concern, including answering Tier 1 questions using publicly available information. In the vast majority of situations, appropriately sited small wind projects are not likely to pose significant risks to species of concern. Answering Tier 1 questions will assist a developer of small or community wind projects, as well as landowners, in assessing the need to further communicate with the Service, and precluding, in many cases, the need for full detailed pre-construction assessments or monitoring surveys typically called for in Tiers 2 and 3. If landowners or community/small wind developers encounter problems locating information about specific sites they can contact the Service and/or state wildlife agencies to determine potential risks to species of concern for their particular project.” (p. 6)
“Developers of distributed or community-scale wind projects are typically considering limited geographic areas to install turbines. Therefore, they would not likely consider broad geographic areas. Nevertheless, they should consider the presence of habitats or species of concern before siting projects.” (p. 12)
The Database of State Incentives for Renewables and Efficiency (DSIRE) is a comprehensive source of information on state, local, utility and federal incentives and policies that promote renewable energy and energy efficiency. Click on a state to view current information and contacts.
The Distributed Wind Energy Association’s (DWEA’s) State Policy Committee deals with policy and market matters that are affected or funded by state governments. Visit DWEA’s website to learn about current state policy campaigns.
The Clean Energy States Alliance (CESA) works with state and municipal agencies to advance clean energy markets and promote clean technologies and policies. CESA provides a number of publications on their website, including the following on distributed and community wind:
Permitting and zoning for distributed and community wind projects can impede or help the development process. Well-crafted ordinances play a vital role in community wind projects, including:
- Ordinances provide wind project siting requirements that the developer/installer can rely on
- Local officials can utilize ordinances to evaluate the project application
- Neighbors and the community can provide input to ordinances to ensure safety and minimize nuisance issues
AWEA has taken a snapshot of and characterized the various elements of local wind ordinances in several important distributed wind/community wind states. These elements include height restrictions, setbacks, sound, lot location and size, environmental requirements and others.
Ordinances by State: