A Comparative Analysis of Business Structures Suitable for Farmer-Owned Wind Power Projects in the United States (November 2004) was prepared for the Wind & Hydropower Technologies Program, U.S. Department of Energy, by Mark Bolinger and Ryan Wise.
For years, farmers in the United States have looked with envy on their European counterparts' ability to profitably farm the wind through ownership of distributed, utility-scale wind projects. Only within the past few years, however, has farmer- or community-owned wind power development become a reality in the United States. The primary hurdle to this type of development in the United States has been devising and implementing suitable business and legal structures that enable such projects to take advantage of tax-based federal incentives for wind power. This article discusses the limitations of such incentives in supporting farmer- or community-owned wind projects, describes four ownership structures that potentially overcome such limitations, and finally conducts comparative financial analysis on those four structures, using as an example a hypothetical 1.5 MW farmer-owned project located in the state of Oregon.