New Wind Incentive Good for Landowners

A new federal wind incentive signed into law will make it more feasible for farmers and ranchers to own wind turbines instead, says Cole Gustafson, NDSU biofuels economist. The law allows allows U.S. taxpayers to deduct 30% of the cost for installing new wind energy systems through the year 2016 or obtain a 30 percent direct grant if the project is completed by 2012. Landowners who participate have to give up the production tax credit, which has been a major catalyst for wind development. Last year, the PTC provided a .021 cent per kilowatt-hour tax credit for electricity produced by a wind tower for 10 years after it was placed in service. However, many landowners didn't have sufficient income to utilize fully the PTCs that were generated. Therefore, landowners typically partnered with high-income external investors who could claim all of the credits during the 10- year project life. This source of investment capital was commonly referred to as "tax equity" financing. The new legislation provides commercial businesses (including farmers and ranchers) the opportunity to receive this incentive in the form of an immediate investment tax credit or grant. These commercial businesses no longer will have to search for external tax equity partners. Rural small businesses and agricultural producers can receive the grant through the U.S. Department of Agriculture's Rural Energy for America Program. DakotaFarmer