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April 11, 2008

Broadening Wind Energy Ownership by Changing Federal Incentives

Minnesota, United States [RenewableEnergyWorld.com]

A typical 2-megawatt (MW) wind turbine can provide enough electricity to power approximately 600 average American homes. So why is it nearly impossible for those same 600 households to pool their resources and own a wind turbine?

Broadening Wind Energy Ownership by Changing Federal Incentives, a new policy brief from the New Rule Project and the Institute for Local Self-Reliance (ILSR) takes a look at how removing or amending two barriers to owning and investing in renewable energy projects, tax credit eligibility limitations and SEC filing restrictions, can pave the way for energy independence through community owned renewables.

“Current federal law discriminates against people owning their own power plants,” said John Farrell, author of the policy brief. “The federal tax incentive is unavailable for the average person, and security regulations make local ownership difficult.”

According to the brief, amending the language about who is eligible to receive production and investment tax credits for an energy project combined with creating a simplified way for a community-owned renewable energy projects to file with the SEC would do much to help promote the use of renewables and community ownership of renewable energy projects.

For more information about the ILSR and New Rules Project or for a copy of Broadening Wind Energy Ownership by Changing Federal Incentives, click here.

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Reader Comments (7)
 
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April 12, 2008
Come on everyone WAKE UP ALREADY. The reason is there would be no way for the politicians,(big brother,uncle sam), to profit (taxes) from individuals who have electricity thru off grid systems. And we all know that if our grovernment doesn' t get a piece of something: IT AINT GOOD FOR ALL THE POCKETS THAT NEED REPLENISHING.
Comment 1 of 7
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April 16, 2008
Remember, most utility companies are mega-corporations. It is an inherent trait of such entities to vehemently protect their territory, even at the expense of the global community.

By the way, the technology of heavy wind systems is such that power produced is rectified to be completely compatible with the power grid. There has never been an issue with the quality of power produced by wind generators, except those invented by persons threatened by the technology. Do your homework.
Comment 2 of 7
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April 16, 2008
Is there a law that prevents you from disconnecting from the electric lines? I doubt it.

Perhaps those 600 people can buy the lines to their homes from the utility and connect it to their power source.

Oh, you want the convenience of the utility and the flexibility to produce your own power - regardless of the effect this may have on the electrical grid. And you want someone else to pay for it. Hmmm, good luck with that.
Comment 3 of 7
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April 16, 2008
The National Rural Electric Cooperative Association (NRECA) headquartered in Arlington, VA, would be another likely source to get solidly behind wind power development, but they appear to remain a tad biassed to traditional sources. See their 74-page 'White Paper on Windpower' at: http://www.nreca.org/Documents/PublicPolicy/Windwhitepaper.pdf
I think over time, more utilities (and the infrastructures like NRECA that support them) will finally 'get it' that wind should not be considered as a 'replacement', but rather as a good, solid 'complement' to other power sources. If wind can reliably and economically displace as much as 40% of power otherwise produced by petroleum, gas, or coal-fired thermal generating stations....and do so for 'free' -- because the feedstock is 'free' -- then we'd be just plain stupid not to employ this technology. Lots of public utilities in 'wind-rich' areas of the country already have figured this out and are developing wind farms aggressively. Many of these projects are located in rural areas that can really benefit from them.
Comment 4 of 7
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April 16, 2008
It would seem that municipal light and power departments would be the ideal embodiment of what you propose. Not only are they tax-free, but also enjoy the ability to be interconnected with their area grid for standby power when their wind resource is lacking. In Massachusetts, which has 40 of these local taxpayer-owned utilities, they also have a state-wide organization that gives them purchasing power for that alternative supply. The Princeton Municipal Light Department, by way of example, has 4 turbines that are owned by the town. Local ownership is a reality. You'll find that most municipal utilities are quite flexible and amenable to wind projects and will entertain project proposals more readily than their investor-owned counterparts. For the most part, they are also exempt from onerous regulatory paperwork exercises that serve only to inflate construction costs. If you are interested, check out www.mmwec.org.
Comment 5 of 7
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April 16, 2008
Wind energy varies with the weather so the average output of a wind turbine is only about 30% of rated power. Windless weather can reduce output almost to zero for weeks at a time. Wind must be combined with other sources of power to give the constant power we need for our homes. If 600 people set up their own wind power system they would be in the dark much of the time unless they could suppliment the windpower. Nevertheless I agree that laws should encourage distributed generation as much as possible.
Comment 6 of 7
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April 16, 2008
Quite neat. If you buy something you pay GST (VAT). If you sell something, you pay income tax at your marginal rate. If you are generating power which turns your meter backwards more or less by an amount equal to the power you use, you are tax neutral. Nothing sold, nothing bought. We must object strenuously to any hint of bringing in double metering or the government will tax us in both directions. By the time the high feed in tariffs in Germany are at an end in 2006 all the small generators will be double metered and the Germans will be at the mercy of their government.
Comment 7 of 7
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