How to Buy a Wind Turbine and Get a Tax Credit

An important featured of the 2009 Economic Recovery Act was a 30 percent tax credit for a qualifying wind turbine purchase for a residence or small business. This credit (sometimes delivered in the form of a grant for non-profits) can shorten the length of pay back time period required to justify the purchase of a quality wind turbine. These simple steps will help you perform an initial analysis to see if your property is suitable for a wind turbine.

Difficulty: Moderately Challenging

Instructions

1. The first issue to considered is average wind speed at your location. Advancements in designs have lessened the requirements for wind speed needed to spin blades and produce power. For full power, however, most turbine systems require wind speeds ranging from 9 to 11 miles per hour. National wind maps with average wind speeds for the nation are available from the Department of Energy. Most areas of the nation, except for the southeastern United States will have average wind speeds that will allow a certain amount of wind energy to be created by a wind turbine. Your selected manufacturer's representative will be able to tell you how well his or her product will do at your location.

2. Most states have "net metering" requirements for their electric utility companies. The term "net metering" simply means that the utility is required to accept any excess energy created by your wind turbine. To qualify, however, your turbine has to be certified "grid ready" - it is capable of providing electricity to the utility according to standard utility measures. Turbines that are not "grid ready" are cheaper, but you will not have the benefit of selling power back to the utility. Check with your local utility to confirm that a net metering requirement is in place in your state.

3. 
   Do not place a wind turbine too close to your house

   Zoning requirements typically force wind turbines (often called "small wind" turbines) into rural settings. You may have several acres of land in which to choose to locate your wind turbine. Typically, a manufacturer's rep will come to your site and do a site survey and recommend placement. Perfect placement is in an area with few trees or structures surrounding the wind turbine. Placement next to your house is not optimal since ground structures cause wind turbulence which interferes with energy production.

4. If at all possible, select the professional installation option. Many times warranties are made invalid by an incorrect installation. It adds to the cost, but it can save you thousands in repair bills. Remember, you are installing a turbine that should be able to withstand high winds and extreme weather.

5. Also, most turbine companies offer a sales and service agreement for five years or more. Although the technology in wind turbines is very reliable, it's nice to be able to call a repair service. When you discuss this feature, ask where the repair crew will be coming from. Some turbine companies have crews in each state - a great plus when you want a fast response. Also, ask if the repair crew is comprised of full time employees or contract crews. Full-time employees know the product and will not have learn the turbine specs while repairing the system on your site.

6. 
   In home monitors spare you a trip outside to check your wind turbine performance

   Another feature to consider is an in-home monitor of turbine performance which will give you real-time performance indicators. Other turbines have a performance monitor located at the base of the turbine which, of course, requires you to go outside to check your turbine's read-outs.

Tips & Warnings

• If you manage a non-profit organization, such as a school, you will be eligible to apply for a federal grant rather than a tax credit.
• The tax credit will compensate you for 30 percent of the purchase cost of a wind turbine. It can be applied over a two-year period. Consult your tax professional for advice regarding your tax situation.
• There is no "cap" regarding the amount of the credit. It is 30 percent of your final cost.
• If your area has an abundance of winter wind, net metering allows you to apply credit from excess winter production to your summer energy bills.
• Check with the manufacturer to confirm that the turbine equipment that you are buying is eligible for the tax credit. Make sure that language to that effect is in the contract that you sign.

Resources

• American Wind Energy Association

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