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Development of Wind Power Being Spurred by Existing Government Program

Early last decade the Environmental Law and Policy Center recognized wind power and other renewable energies as great solutions for diversifying income, improving environmental quality and rural economic development. That's when ELPC Senior Attorney John Moore says they created a report on "Re-powering the Midwest", which focused on the different types of government policies that could move renewable technologies like wind power forward.

"The Re-powering the Midwest Report was really a major spark for Senator Harkin from Iowa and Senator Luger from Indiana to think more about what the Farm Bill could do for clean energy development, and develop the Energy Title in the Farm Bill," Moore said.

Among the programs included in the Energy Title of the Farm Bill was the Rural Energy for America Program or REAP. Moore says it's one of the few federal programs that helps farmers and small businesses with grants and loan guarantees for the complete range of renewable energy and energy efficiency technologies. It provides as much as 25% of a project's cost, up to $500,000 per project, and loan guarantees for project development. According to Moore wind power has been a major part of REAP projects since 2003.

"REAP has funded more than $53 million in wind projects, or about 350 projects both large and small," Moore said. "The REAP program is very popular now with project awards in virtually every state in the country and the Administration supported more funding so for 2010, REAP funding is going to be up another 40% or so, close to $100 million."

Moore says the 2009 Recovery Act also included important financial incentives for wind development. From a farmer's perspective, he says the most important program is the Treasury Grant Program, which provides up front cash grants for 30% of a project's total capital costs.

"That's new and it's important because it doesn't require owners of these projects to have the really substantial tax appetite and expenses that are necessary to take advantage of another important program called the Production Tax Credit," Moore said. "The Recovery Act extended it through 2012 and also made it easier for rural electric cooperatives and public power companies to borrow money and build clean energy projects."

Moore calls the Treasury Grant Program a game-changer, but says it's only effective for a couple more years for most wind power projects. However, for smaller projects he says the program is effective through 2016, which covers individual turbines of 100 kilowatts or less that are nice sized for many farm operations.