The term “multiplier effect” as it pertains to the local economy and wind project development describes how increased spending in one part of a economy starts a chain reaction that results in an overall increase in economic activity. When a consumer spends money to buy goods or services at a local business, the local business will, in turn, spend some of this money locally on additional goods and services, and the local providers of these goods and services will likewise spend some of this money locally. In this way, money recirculates within local economies, creating wealth broadly through ongoing cycles of buying and selling. In contrast, when a consumer spends money outside of his or her local economy, it does not benefit local businesses or the employees of these businesses but instead benefits individuals outside of the community. For example, when the income from a wind energy project is spent for goods and services provided primarily by non-local entities, the local community benefits less than if these goods and services are provided locally. This concept explains why outside ownership of a natural resource often results in local poverty despite the great wealth that results from extraction of the resource – most of the wealth from the resource flows permanently outside the local community leaving little available to recirculate within and thereby enrich the local community.
Benefits of Community Wind
This presentation from the Wind Powering America program was given in 2006 at the AWEA annual conference. According to the Wind Powering America web site, the presentation "covers wind turbine sizes and applications, the evolution of U.S. commercial wind technology, capacity and cost trends, world growth market, installed wind capacities, drivers for wind power, wind cost of energy, historic natural gas prices, Renewables Portfolio Standards (RPS) — people want renewable energy, wind energy investors, wind energy doesn't consume water, windy rural areas need economic development, economic development impacts, case studies, local ownership models, Farm Bill activities, Job and Economic Development Impact (JEDI) Model, state economic impacts, comparative economic development impacts, key issues for wind power, and more."
This report by Teresa Welsh of The Iowa Policy Project was published April 2005. This report highlights three analyses that compare the economic development benefits of small-scale, locally owned generation to other larger capacity ownership structures and discusses the barriers and changes necessary to aid the development of small scale, locally owned wind generation, specifically in Iowa.
Published by the United States Government Accountability Office (GAO) in September 2004, this report examines the amount of electricity generated by U.S. wind power and prospects for its growth, the contribution of wind power to farmers' income and rural communities, the advantages and disadvantages for farmers of owning a wind power project versus leasing land for a project, and USDA's efforts to promote wind power in rural communities.
“Wind Power's Contribution to Electric Power Generation and Impact on Farms and Rural Communities Wind power provides electricity without polluting the air or depleting nonrenewable resources. Wind power relies on steady winds to turn the blades of power-generating turbines. Because these turbines generally are located on rural lands, wind power could also provide economic benefits to farmers and rural communities.”