Project Financing

Wind Project Financing Structures: A Review & Comparative Analysis

This report from Lawrence Berkley National Laboratory was released in September, 2007. The report, titled "Wind Project Financing Structures: A Review & Comparative Analysis," was authored by John Harper (Birch Tree Capital, LLC), Matt Karcher (Deacon Harbor Financial, L.P.), and Mark Bolinger (Lawrence Berkeley National Laboratory), and was funded by the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy, Wind & Hydropower Technologies Program.

The rapid expansion in the U.S. wind power industry over the past few years has required the mobilization of a tremendous amount of capital. In 2007 alone, for example, an estimated $6 billion will be invested in new wind projects in the U.S. To attract this kind of capital, the wind power sector has, in recent years, developed multiple financing structures to manage project risk and allocate Federal tax incentives to those entities that can use them most efficiently. These structures are the underlying focus of this report.

Specifically, the purpose of this report is three-fold: (1) to survey recent trends in the financing of utility-scale wind projects in the United States, (2) to describe in some detail the seven principal financing structures through which most utility-scale wind projects (excluding utility-owned projects) have been financed from 1999 to the present, and (3) to help understand the impact of these seven structures on the levelized cost of energy from wind power.

The seven structures -- which range from simple balance-sheet finance to several varieties of all-equity partnership "flip" structures to leveraged structures -- feature varying combinations of equity capital from project developers and third-party tax-oriented investors, and in some cases commercial debt. Their origins stem from variations in the financial capacity and business objectives of wind project developers, coupled with the investment risk tolerance and objectives of the tax-oriented investors and debt providers.

The full report (including an executive summary) can be downloaded from:

In addition, a high-level PowerPoint summary of the document is available at:

[Text of this item is adapted with minor changes from from a 09/2007 LBNL press release.]

Webinar: The New Federal Tax Exempt Bonding Bill for Community Energy

The New Federal Tax Exempt Bonding Bill for Community Energy webinar was recorded on June 1, 2007.

The proposed Rural Community Renewable Energy Bonds Act (S. 672), introduced by Sen. Ken Salazar (D-CO) and Sen. Gordon Smith (R-OR), would provide tax exempt private purpose bonds to fund locally owned community energy projects, e.g. those under 40 MW with at least 49% local ownership. If enacted, this bill would give local community energy project developers a better alternative to federal renewable energy production tax credit funding.

To view just the slides from the presentations, click on the links in the list of speakers, below.

Speakers include:

John Covert
Executive Director, Colorado Working Landscapes (Introduction)
Presentation: Introduction

Lisa Daniels
Executive Director, Windustry (Moderator)
Presentation: Financing Locally Owned Wind Projects

Steve Black
Energy Advisor to Senator Salazar

Gregory Johnson
Partner, Patton Boggs, LLP
Presentation: New Financing Opportunities for Renewable Energy

Lee White
Executive Vice-President, George K. Baum & Company
Presentation: Financing Renewable Energy Projects

Andy Olsen
Environmental Law and Policy Center
Presentation: Next Steps

For more information about the Rural Community Renewable Energy Bond Act contact:

Lee White
Renewable Energy Finance Coalition (
[email protected]

Webinar Sponsored by:
Renewable Energy Finance Coalition
Environmental Law and Policy Center

AWEA Wind Power Finance and Investment Workshop


October 10-11, 2007, New York, NY. This workshop will focus on the latest financing trends, defining the market in debt terms and tax equity deals, new uses of swaps and other derivatives, and how developers are responding to the challenge of having to post availability and output guarantees to utilities buying electricity from their projects. This is AWEA's 4th finance workshop in New York City, and it will provide a detailed look at wind project financing and investment.

Event type: 
Geographic Area: 

Chapter 13: Power Purchase Agreement

A power purchase agreement (PPA) is a contract to buy the electricity generated by a power plant. These agreements are a critical part of planning a successful wind project because they secure a long-term stream of revenue for the project through the sale of the electricity generated by the project. Securing a good PPA is often one of the most challenging elements of wind project development.

This section covers the basics of a power purchase agreement and things to consider as you negotiate with a power purchaser. The main topics covered in this section are:


Chapter 10: Tax Incentives

In order to be financially competitive, most wind projects need to take advantage of federal and, where available, state tax incentives. It is critical to understand the role and mechanics of tax incentives while developing a commercial-scale community wind project because these incentives can represent one-half to two thirds of the total revenue stream over the first 10 years of operation due to the Federal Production Tax Credit (PTC) and Modified Accelerated Cost-Recovery System (MACRS) or other type of depreciation that can be applied to wind energy assets. You will need to consult a tax professional in the early stages of project planning to ensure that your financial projections are valid and accurately take into account the project’s tax burden and benefits.


Case Studies on Iowa Wind

These case studies are from the Iowa Energy Center. Click here to view the case studies.

Wind Projects

Staples Residence, New Providence, IA (PDF 1.48 MB)
Wind Turbine

Akron-Westfield Schools, Akron, IA (PDF 174 KB)
Wind Turbine

Ashler Residence, Hamburg, IA (PDF 645 KB)
Wind Turbine

Clarion-Goldfield Schools, Clarion, IA (PDF 185 KB)
Wind Turbine

Eldora-New Providence Schools, Eldora, IA (PDF 170 KB)
Wind Turbine

Forest City Schools, Forest City, IA (PDF 171KB)
Wind Turbine

Hawkeye Dental, Ely, IA (PDF 1.23 MB)
Wind Turbine

Montgomery Residence, Bryan, IA (PDF 567 KB)
Wind Turbine

Neppel Energy, LCC, Armstrong, IA (PDF 236 KB)
Wind Turbine

Spirit Lake Schools, Spirit Lake, Iowa (PDF 151 KB)
Wind Turbine

Tjaden Farms, Charles City, IA (648 KB)
Wind Turbine

Tran Lam Residence, Vinton, IA (PDF 712 KB)
Wind Turbine

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