Commercial Scale

Stimulus Incentives Benefit Community Wind

A new report from Lawrence Berkeley National Laboratory reveals how the 30% investment tax credit (ITC) and cash grant equivalent have increased benefits for the development of Community Wind projects. “Revealing the Hidden Value that the Federal Investment Tax Credit and Treasury Cash Grant Provide To Community Wind Projects” analyzes the impact of new federal policies for wind farm investment incentives introduced this year as part of the U.S. economic stimulus program.

Historically, the production tax credit (PTC) has been the primary incentive for wind farm development, but the PTC requires passive income that only certain equity investors can leverage. The ITC and cash grant equivalent now available to qualified projects have reshaped the financial landscape for renewable energy development by lowering the hurdles for investors to obtain tax credits as well as providing cash grant equivalents for upfront capital. In addition, the American Recovery and Reinvestment Act of 2009 included provisions that eliminated the ITC's anti-double-dipping (or "haircut") provision for subsidized energy financing.

“Many of these ancillary benefits circumvent barriers that have plagued community wind projects in the United States for years.”

-Mark Bolinger,
Lawrence Berkeley National Laboratory

Mark Bolinger, the report's author, argues that while the stimulus changes were intended for the wind energy markets in general, they have been a blessing in disguise for community wind project development in the United States.

“It stands to reason that community wind, which has had more difficulty using the PTC than has commercial wind, may benefit disproportionately from this newfound ability to choose among these federal incentives. This report confirms this hypothesis,” says Bolinger. “Just as important are a handful of ancillary benefits that accompany the 30% ITC and/or cash grant, but not the PTC. Many of these ancillary benefits—including relief from the alternative minimum tax, passive credit limitations, and certain PTC ‘haircuts’—circumvent barriers that have plagued community wind projects in the United States for years.”

The report compares two financing structures, the Strategic Investor Partnership Flip and the Cooperative LLC, finding that the “Strategic Investor Flip structure benefits significantly more from choosing the ITC over the PTC than it does from switching to the 30% cash grant. Meanwhile, the opposite is true for the Cooperative LLC structure, which does not benefit much from selecting the ITC over the PTC, but realizes a tremendous amount of value by choosing the 30% cash grant over the ITC.”

This report, “Revealing the Hidden Value that the Federal Investment Tax Credit and Treasury Cash Grant Provide To Community Wind Projects,” and others are available at the Electricity Markets and Policy Renewable Energy Publications section of the Lawrence Berkeley National Laboratory web site.

Lisa Daniels, Executive Director of Windustry, served as a draft reviewer for this report.

Study Finds No Impact of Wind Projects on Property Values

A new study answers a long-nagging question of whether property values will decline due to nearby wind energy development. The answer is no, according to a report released by the Lawrence Berkeley National Laboratory, funded by the U.S. Department of Energy: "The Impact of Wind Power Projects on Residential Property Values in the United States: A Multi-Site Hedonic Analysis."

"Neither the view of wind energy facilities nor the distance of the home to those facilities was found to have any consistent, measurable, and significant effect on the selling prices of nearby homes,"

—Ben Hoen, report author
A overwhelming majority of Americans support wind farm projects over other types of new power sources that might be built in their community [U.S. Saint Index© survey]. However, concerns over property values can arise when residents learn of plans for nearby wind farm projects. While such concerns are not unreasonable, given property value effects that have been found near high voltage transmission lines, landfills, and other electric generation facilities; the impacts of wind energy facilities on nearby home sales had not previously been investigated thoroughly.

"Neither the view of wind energy facilities nor the distance of the home to those facilities was found to have any consistent, measurable, and significant effect on the selling prices of nearby homes," says report author Ben Hoen, a consultant to Berkeley Lab. "No matter how we looked at the data, the same result kept coming back - no evidence of widespread impacts." 

The report concludes that there are no measurable impacts on residential property values due to the three characterizations studied:

  • Area Stigma: A concern that the general area surrounding a wind energy facility will appear more developed, which may adversely affect home values in the local community regardless of whether any individual home has a view of the wind turbines.
  • Scenic Vista Stigma: A concern that a home may be devalued because of the view of a wind energy facility, and the potential impact of that view on an otherwise scenic vista.
  • Nuisance Stigma: A concern that factors that may occur in close proximity to wind turbines, such as sound and shadow flicker, will have a unique adverse influence on home values.

The team of researchers for the project collected data on almost 7,500 sales of single-family homes situated within 10 miles of 24 existing wind facilities in nine different U.S. states, and that occurred between 1996 and 2007; the closest home was 800 feet from a wind facility. The conclusions of the study are drawn from eight different hedonic pricing models, as well as both repeat sales and sales volume models.  The hedonic pricing model is one of the most prominent and reliable methods for identifying the marginal impacts of different housing and community characteristics on residential property values.

The final report can be downloaded:
http://eetd.lbl.gov/ea/ems/re-pubs.html
    
A presentation summarizing key findings is available:
http://eetd.lbl.gov/ea/ems/emp-ppt.html

New Community Wind Financing Handbook

The Environmental Law & Policy Center has published an updated version of the Community Wind Financing Handbook. This guide reflects new financing opportunities available from federal energy and economic stimulus legislation, the new Farm Bill, and state incentives.

Community Wind Financing Handbook

Since ELPC published the first edition of the Community Wind Financing Guide in 2004, wind power has become the United States' fastest-growing source of electricity. Community wind projects, which represent a small but growing share of the wind market, are largely owned by farmers and other local investors with a significant economic stake in the project. Such local ownership generates powerful economic and social benefits for rural areas.

The updated Handbook provides the latest information on financing community wind projects, including ownership structures, roles of financial intermediaries, sources of federal and state financial support and consultant/developer directories. Although building these projects has become somewhat easier over time, understanding and accessing financing opportunities remains perhaps the most important requirement for a successful project.

The Handbook can be downloaded at no cost on the ELPC web site from the link below.

Windustry Webinar - PTC, ITC or Cash Grant?

Webinar Series: Financing for Community Wind and Community Energy Projects

This is a recording of the first in a four-part webinar series at no charge that will provide attendees with vital information regarding Community Wind and Community Energy project financing in the new policy environment of the American Recovery and Reinvestment Act of 2009.

Windustry Webinar

PTC, ITC or Cash Grant:
Where should a community wind developer begin?

Thursday, August 27, 2009

This webinar presented information about:

  • The opportunities relating to each incentive as outlined in the ARRA
  • What it takes to get a U.S. Treasury Cash Grant in lieu of tax credits, including:
    • How to access the funds
    • How and when to get project costs certified
    • What to expect in the application process
    • What the requirements are for submission

Moderator:
Lisa Daniels, Windustry

Panelists:
Jim Duffy, Nixon Peabody LLP
Forrest David Milder, Nixon Peabody LLP
Matt Ferguson, Reznick Group
Julie Newland, Reznick Group
Kevin Schulte, Sustainable Energy Developments

 

A transcript in Adobe Reader (PDF) format is also available in the link below:
Windustry Webinar Transcript

This webinar was presented by Windustry.
Windustry

In-kind sponsorship of this webinar was provided by National Renewable Energy Lab (NREL), Nixon Peabody LLP, Reznick Group, and Sustainable Energy Developments (SED).

National Renewable Energy Laboratory Reznick Group
Nixon Peabody LLP Sustainable Energy Developments

IREC Releases 2009 Interconnection and Net Metering Guides

The Interstate Renewable Energy Council (IREC) has just released the 2009 updates for its highly respected and influential rules and procedures for interconnecting and net metering distributed generation.

Many of the model procedures that regulators and utilities look to in developing local standards have not been updated in the past three years. Since that time, there has been significant market growth for renewable distributed generation. To facilitate that growth, many states have adopted net metering and interconnection policies and many others have revisited and expanded their existing policies to incorporate lessons learned from facilitating increased penetrations of distributed generation.

IREC has been a participant in more than thirty state utility commission rulemakings regarding interconnection and net metering of distributed generation. IREC's model rule updates capture these evolved best practices and compile them into a template regulators and utilities can use as a starting point when drafting local rules.

Important advances in interconnection procedures include:

  • clarifying that third party ownership of facilities is permissible;
  • raising the size eligibility for the simplest installations from 10 kilowatts to 25 kilowatts;
  • allowing online applications;
  • addressing state-jurisdictional facilities over ten megawatts; and
  • updating provisions related to network interconnections.

Important advances in net metering rules include:

  • increase in the size of systems eligible for net metering;
  • expansion of program capacity caps;
  • meter aggregation; and
  • accommodation of third-party ownership of net metered systems.

Both guides may be downloaded from IREC in the links below.
Model Interconnection Procedures 2009
Net Metering Model Rules 2009

Landowner Associations Can Help Market South Dakota Wind

"You'll find that a lot of wind-energy developers are reluctant to come to South Dakota because they don't know anyone and they don't know about our resources," says Steve Wegman of the South Dakota Wind Energy Association

in the article "Landowners advised: Consider wind-energy development" in the Madison Daily Leader.

"Landowner associations help undeveloped areas get noticed. It's an opportunity for them to get their flag up in the air," says Wegman, who explains that landowners can invite utilities and developers to consider their wind resources by organizing together.

Get more information about the South Dakota Wind Energy Association.

Get more information about landowner associations.

Second Round of Clean Energy Awards Announced by Treasury

Washington, D.C. - The U.S. Treasury Department has announced the second round of awards for cash assistance to energy producers in place of tax credits. This provides provides an additional $550 million, bringing the total to more than $1 billion awarded to dateto companies committed to investing in domestic renewable energyproduction.

“This Recovery Act program is an example of a true federal partnership with the private sector,” said Treasury Secretary Tim Geithner. “Not only are our Recovery dollars meeting an immediate funding need among innovative companies, they are also jumpstarting private sector investment in communities across the country, with benefits for the renewable energy industry and our economy alike.” 

Created under Section 1603 of the Recovery Act, the program provides cash assistance to energy producers in place of tax credits. The payments improve project viability, enabling companies to create and retain jobs, and establish sufficient financing bases for projects that may otherwise not be possible, dramatically expanding and accelerating the development of renewable energy projects throughout the country. Under this program, the federal government provides a cash payment in lieu of a tax credit totaling 30 percent of the qualifying cost of the project; for each federal dollar spent in payments, more than two dollars are spent in private sector investments. 

The following 25 projects were funded in this announcement.

STATE

PROJECT

LOCATION

AMOUNT

CA

Bob's Big Boy LLC

Burbank, CA

$53,648

CA

Ameresco Half Moon Bay LLC

Half Moon Bay, CA

$6,641,747

CA

Ameresco Keller Canyon LLC

Pittsburgh, CA

$2,796,377

CA

BioFuel Oasis Cooperative, Inc

Berkely, CA

$16,858

CO

5135 Company

Denver, CO

$23,130

FL

Conditioned Air Corporation of Naples

Naples, FL

$50,250

HI

Two Daughters

Kihei, HI

$15,150

IA

Barton Wind Farm

Kinsett, IA

$93,419,883

MN

BI

Minneapolis, MN

$25,649

MN

Spruce Tree Centre

St. Paul, MN

$107,764

MO

Farmers City Wind Farm

Tarkio, MO

$84,959,857

MO

Ameresco Jefferson City LLC

Jefferson City, MO

$2,300,244

NC

Solar Billboard Property

Bolivia, NC

$5,850

NJ

Meadowlands Exposition Center

Secaucus, NJ

$767,937

NJ

EHT Leasing LLC

Egg Harbor Township

$118,560

NJ

OC Kearny

Kearny, NJ

$992,006

NV

Enel Salt Wells, LLC

Fallon, NV

$21,196,478

NV

Enel Stillwater, LLC

Fallon, NV

$40,324,394

NY

OP 110 E. 59th St. CHP

New York, NY

$415,774

SD

Impervious Energy Systems, LLC

Whitewood, SD

$31,511

TX

Barton Chapel Wind Farm

Jacksboro, TX

$72,573,627

TX

Rio Grande Valley Sugar Growers, Inc.

Santa Rosa, TX

$10,232,261

TX

Bull Creek Wind LLC

O'Donnell, TX

$91,390,497

TX

Pyron Wind Farm, LLC

Roscoe, TX

$121,903,306

VT

Wheeler Brook Apartments

Warren, VT

$19,155

 

 

 

$550,381,913

Minnesota Transmisson Study Suggests Grid Upgrades for Renewable Energy

A new study released by the Minnesota Office of Energy Security shows that the state's power grid could accomodate 600 megawatts of new renewable energy capacity by making upgrades to electric transmission systems. A previous study had shown that another 600 MW could be added to the existing tranmission grid without impacting it's performance.

"Dispersed Renewable Generation Transmission Study Phase II" completes a two-part study chartered by the Minnesota legislature as part of the Minnesota NextGen Energy Act passed in 2007. The act calls for 25 percent of the total energy used in the state to be derived from renewable energy resources by the year 2025. In order to meet that goal, dispersed generation of the grid would allow many distributed power generators, such as wind farms, to add significant energy capacity to the system. Together, the combined studies created complex computer models designed to add 1200 MW of dispersed capacity by the year 2013.

Phase I, completed in June 2008, identified locations in the state transmission grid where a total of 600 MW of renewable energy projects could be developed with little or no changes required to the existing grid infrastructure. Although the study noted that dispersed generation can have impacts on the electric grid, it concluded that the majority of the 600 MW could be sited without disruptions at locations in southern Minnesota. In fact, in 2008 the state added 454 MW of commercial wind power with the vast majority sited in southwestern Minnesota.

Proposed DRG Phase II Sites

Phase II of the study sought an additional 600 MW and found that there were limited locations in the state that could accommodate 10-40 MW generation projects without incurring some amount of transmission investment. So, the study team focused on sites that could potentially accommodate generation with only minor transmission investments, not the construction of new high-voltage transmission routes. The total cost of the transmission upgrades were estimated to be $121 million. In comparsion, the CapX 2020 project for constructing three new high-voltage transmission lines across the state is estimated to cost $1.7 billion.

As a result of the studies, the Minnesota Office of Energy Security concluded that achieving the renewable energy goal calls for a dual strategy of:

  • Using our existing transmission infrastructure more efficiently, through increased energy conservation and efficiency, demand response, emerging efficiency technologies and dispersed renewable generation where it can be interconnected reliably, and
  • Significantly increasing high-voltage transmission capacity in the state.

The studies and explanatory recorded webinars are available from the Minnesota Office of Energy Security on the link below.

Tom Wind (Wind Utility Consulting) acting as a consultant to Windustry served as a member of the Technical Review Committee for both studies.

Seed Grants Available for Community Wind Projects in Minnesota

The Minnesota Clean Energy Resource Teams (CERTs) is providing financial assistance for energy efficiency and/or renewable energy projects requiring technical assistance. Project funding can support technical assistance services (labor costs only, such as for a consultant, design professional, installer or student labor), for projects in all seven Minnesota CERT regions (Central, Metro, Northeast, Northwest, Southeast, Southwest and West Central).

All applications are due no later than 4:30pm, November 2nd, 2009.

The primary objectives of this funding project are to:

  1. Encourage the implementation of community‐based energy efficiency and renewable energy projects in CERT regions; and
  2. Provide a forum for community education about energy efficiency and renewable energy technologies and their economic, ecological and community benefits.

Funding for these projects is provided through the MN Department of Commerce, Office of Energy Security (OES).

Visit the CERTs website to learn more about this opportunity and to download the application materials. You can also read more about previous projects that were successful in receiving these funds.

Treasury, Energy Announce $500 Million in Awards for Clean Energy Projects

Washington, D.C. - Marking a major milestone in the effort to spur private sector investments in clean energy and create new jobs for America's workers, Treasury Secretary Tim Geithner and Energy Secretary Steven Chu announced $502 million in the first round of awards from an American Recovery and Reinvestment Act (Recovery Act) program that provides cash assistance to energy production companies in place of earned tax credits.

The new funding creates additional upfront capital, enabling companies to create jobs and begin construction that may have been stalled until now.

Created under Section 1603 of the Recovery Act, the program is expected to provide more than $3 billion in financial support for clean energy projects by providing direct payments in lieu of tax credits. These payments will support an estimated 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities in all regions of the country over the life of the program. As a result of this first round of funding, more than 2,000 Americans will have access to jobs in the renewable energy industry - both in construction and in manufacturing - while moving the nation closer to meeting the Administration's goal of doubling renewable energy generation in the next few years. 

The Treasury Department opened the application process for the 1603 program on July 31, 2009 and is today making the first awards in half the statutorily mandated turnaround time of 60 days. The following is a chart of projects funded as part of today's announcement. Additional awards under the program will be announced in the coming weeks. 

STATE PROJECT LOCATION AMOUNT
CO Movement Gym PV System (Solar) Boulder, CO $157,809
CT Solaire Development, LLC Danbury, CT $2,578,717.00
ME Evergreen Wind Power V, LLC Danforth, ME $40,441,471
MN Moraine II Wind Farm Woodstock, MN $28,019,520
NY Canadaigua Power Partners, LLC (Wind) Cohocton, NY $52,352,334
NY Canadaigua Power Partners II, LLC (Wind) Cohocton, NY $22,296,494
OR Wheat Field Wind Farm Arlington, OR $47,717,155.00
OR Hay Canyon Wind Farm Moro, OR $47,092,555
OR Pebble Springs Wind Farm Arlington, OR $46,543,219
PA Highland Wind Farm Salix, PA $42,204,562
PA Locust Ridge II, LLC (Wind) Shenandoah, PA $59,162,064
TX Penascal Wind Farm Sarita, TX $114,071,646
      $502,637,546

 

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