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Existing Government Policies Spur Wind Power Development

Existing Government Policies Spur Wind Power Development

Date: 1/14/2010

Source: Stacia Cudd, National Association of Farm Broadcasting News Service

Audio with John Moore, Environmental Law & Policy Center Senior Attorney (MP3 2.8 MB) Download Windows Media Player. Time: 00:02:57.

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 "Repowering the Midwest," which focused on the different types of government policies that could move renewable technologies — like wind power — forward.

"The Repowering Midwest report was really a major spark for Senator Harkin from Iowa and Senator Lugar 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."

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-percent of a project's cost — up to $500,000 per project — and loan guarantees for project development. Wind power, according to Moore, has been a major part of REAP projects since 2003.

"REAP has funded more than $53,000,000 in wind projects, or about 350 projects both large and small. The REAP program is very popular now, with project rewards 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 $100,000,000 dollars."

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-percent 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, which the Recovery Act extended through 2012. It also expanded something called the Investment Tax Credit, also through 2012. And it also made it easier for rural electric cooperatives and public power companies and towns and cities and states to also 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. For smaller projects, however, he says the program is effective through 2016. This covers individual turbines of 100 kilowatts or less, which Moore says are nicely sized for many farm operations. He encourages producers to give that serious consideration.

More Information

  • Rural Energy for America Program

    The 2008 Farm Bill, enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program (formerly Section 9006 of the 2002 Farm Bill) into the Rural Energy for America Program. The program allows farmers to apply for grants and loan agreements to help fund renewable energy projects and energy efficiency on the farm, including wind projects. The program also provides grants for energy audits and renewable energy development assistance.

This information was last updated on January 14, 2010