Government Grants and Tax Incentives for Wind Turbines

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Installing wind turbines to capture wind energy is becoming more economically feasible for companies that produce electricity, small businesses, and individuals. Government grants, tax credits, and other subsidies can reduce the installation costs. The U.S. Department of Energy further spurred the industry by announcing over $500 million in grant awards from the American Recovery and Reinvestment Act (Recovery Act) to companies for clean energy projects including wind turbines in September 2009 (References 1).

Current program

In addition to the $500 million in grants for clean energy projects, the Recovery Act extended an up to $4,000 tax credit for homeowners who install small wind turbines on their property. The Act also created an $800 million renewable bond program for energy producers and extended the production tax credit for wind energy (References 2).

History

According to the U.S. Department of Energy, in 1978 the Public Utilities Regulatory Policies Act encouraged the development of renewable energy through requiring public utilities to buy electricity from qualifying facilities. In 1980, the Crude Oil Windfall Profits Tax Act increased tax credits to 25% for businesses using wind energy. By 1989, federal subsidies for wind energy had reached a low point. In 1992, the Energy Policy Act created a production tax credit of 1.5 cents per kilowatt hour for wind-generated electricity. By 2006, the Department’s budget for wind subsidies reached $500 million dollars, 10 times as much as the 1978 level, and wind energy production costs fell dramatically as the number of kilowatt hours increased (References 3).

Significance

With the rise of energy prices in other sectors, such as petroleum, wind energy becomes more attractive to consumers and also attracts more funding from government sources. American dependence on foreign sources of oil has also become a strategic problem for U.S. interests and has led to popular support for alternatives.

Benefits

Wind energy generated by turbines is a low polluting, renewable source of electricity. It can be a source for employment of American workers, one reason cited for its inclusion in the 2009 American Recovery and Reinvestment Act (References 4). The more the U.S. relies on wind power and other renewable energy sources, the less it is dependent on global oil markets.

Potential

The U.S. government's encouragement, along with the increase in petroleum prices, seem to have pushed wind power to greater success. According to the Department of Energy in 2009, "The U.S. now leads the world in wind energy generation and has led the globe in new wind energy capacity installations for the past four years. Last year, wind energy accounted for 42 percent of all new energy generation capacity in the United States." (References 4 - http://apps1.eere.energy.gov/news/daily.cfm/hp_news_id=163).

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