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Wind Power Adds Jobs and Increases Wealth in Rural Communities

The first study to use detailed econometric methods to measure the economic development impacts of wind power installations in a 12-state region between 2000 and 2008 shows a positive net annual increase on county-level personal income and jobs.

“For every megawatt of additional wind in County A, one would expect an $11,150 increase in income,” said Ryan Wiser, Staff Scientist and Deputy Group Leader in the Electricity Markets and Policy Group at LBL. Along with the increase in income, there was also an average 0.48 increase in net jobs, and Wiser added that the net job measure is meaningful only when most wind farms are bigger than 1 MW.  

“There is no doubt that local communities, especially rural communities, are impacted by these projects,” said Wiser. “We are not prepared to say whether [the numbers] are significant or insignificant, but some counties are being substantially positively impacted by wind development.”

The study, conducted by the USDA Economic Research Service, Lawrence Berkeley National Laboratory (LBL) and the National Renewable Energy Laboratory, focused on 1,009 counties in Texas, Oklahoma, New Mexico, Colorado, Wyoming, Montana, Kansas, Nebraska, Montana, North and South Dakota, Iowa and Minnesota.

The region was chosen because it has the highest concentration of the best land-based wind resources in the U.S., as well as the highest level of wind power development with the exception of California, Oregon and Washington [see maps]. It was also chosen in order to “emphasize a contiguous region of the country with relative homogenous characteristics.”

To date, Wiser said, studies of the economic impact of wind power development used “input-output analysis,” which creates a model of the local economy to forecast the impact of a change, such as a wind farm, on that economy.  “Modeling is great, but we wanted to identify whether there has been an observable impact of wind development on these counties in the past, an on-the-ground perspective,” he said.

The $11,150-per-MW increase in total county-level personal income and the 0.48-per-MW net employment increase translate to an average 0.22% increase in personal income and 0.4% employment gains from 2000 to 2008.  

Wiser explained that the actual percentage impact varies according to the level of employment and personal income in any one of the 1,009 surveyed counties. “For counties with a higher population and income, the wind impact will be only a small fraction of the total,” he said.  

Wiser said the numbers are “a bit misleadingly low, because we take into account only wind development in the past, and there has already been a lot of development since 2008.”  Furthermore, he said, the study team did not count people switching into a wind sector job as a net positive gain in employment, only as an increase in income, if it included one. The study team chose to use personal income instead of labor income to account for things like royalties paid to a landowner for wind turbine installation, Wiser said. 

Such a study was not possible until now, Wiser said.  “It requires enough wind development in the past to identify impacts that exist. If [USDA] had come to me 4 years ago, I would have said there’s not enough development to determine econometric impact.” 

The study, “The Impact of Wind Development on County-Level Income and Employment: A Review of Methods and an Empirical Analysis,” can be purchased through the website of journal Energy Economics.  The study is also summarized in a fact sheet from the U.S. Department of Energy (DOE).

Lead image: Wind turbines via Shutterstock

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