Federal Government Incentives
Government incentives for both large- and small-scale producers
contribute to the economic feasibility of a wind-power system. Just a few of
the current economic incentive programs for renewable energy systems
include:
- Production Tax Credit: Basically, wind-power
generators, usually businesses, receive 1.8 cents (as of Dec. 2005) per
kWh of wind energy produced for wholesale distribution during the first
10 years the wind farm is up and running.
- Net metering - In this system, individuals and businesses producing
renewable energy receive credits for each kWh they produce beyond their
own needs. When someone produces more electricity than he needs, his
power meter runs backwards, sending that excess electricity to the power
grid. He receives credits for the electricity he sends to the grid,
which count as payment toward any electricity he draws from the grid
when his turbine can't provide enough power for his home or business.
(Many large energy companies don't much care for this setup since they
are essentially purchasing the individual producer's wind power at
retail price instead of the wholesale price they'd be paying a wind
farm.)
- Renewable-energy credits - Many states now have renewable-energy
quotas for power companies, whereby those companies have to buy a
certain percentage of their electricity from renewable sources. If
someone with his own turbine lives in a state that has a "green credit
program," he receives tradable credits for each megawatt-hour of
renewable energy he produces in a year. He can then sell those credits
to large, conventional-energy companies looking to meet their state or
federal renewable-energy quota.
- Installation tax credits: The federal government and some states
offer tax credits for the costs of setting up a renewable-energy system.
Maryland, for instance, offers businesses or landlords a credit for 25
percent of the cost of purchasing and installing a wind-turbine system
if the energy-supplied building meets certain overall "green criteria."