Windustry Publication

Small Wind Turbine Program Aimed at Furthering Small Wind Development in MN

In 2011, with a grant from the USDA, Windustry and the Region Nine Renewable Energy Task Force launched a Small Wind Bulk Buy Program to help rural enterprises take advantage of the state's wind resources and net-metering laws.

The program was supported by a USDA Rural Business Enterprise Grant, and other funders to support small wind energy, and the consequent economic development in the region. It provided Small Wind 101 training sessions, as well as technical and logistical support, including wind resource evaluation, site selection, economic evaluation, turbine selection, and support with permitting. The program focused on machines ranging in size from 2.4 kW to just under 40kW.

As of May, 2012, the funds from the USDA ran out and the application for renewal was declined. However, the Region Nine Renewable Energy Task Force still supports the program in a limited fashion; and the resources that were developed, in particular the Small Wind Guide and the Small Wind Financial Calculator, continue to be available below.

 

 

This is a wonderful opportunity for those who have considered wind power to find out if it really makes sense for them. People will get an honest evaluation, and for those who want to move forward, the path will be made as smooth as possible.

—Rich Huelskamp, Renewable Energy consultant, The Sun's Warmth

Windustry Program Analyst Dan Turner: "Region Nine has learned a great deal about making this program work efficiently. Those in the region who can take advantage of it will be well served.

It makes small wind turbines more attractive as investments both to offset electric bills and, in some cases, to generate revenue. Industry growth in the area engages a local workforce trained to install and maintain small wind turbines, stimulates supply chain business development, and keeps energy dollars local to maintain and build the rural economy."

 

Download Small Wind Guide

Download the Small Wind Guide for a basic overview about small wind electric systems to help you decide if wind energy is right for you.

Download the Small Wind Financial Calculator for Minnesota Net Metering Situations, requires Microsoft Excel or compatible software.

 

Chapter 13: Power Purchase Agreement

PPA
A power purchase agreement (PPA) is a contract to buy the electricity generated by a power plant. These agreements are a critical part of planning a successful wind project because they secure a long-term stream of revenue for the project through the sale of the electricity generated by the project. Securing a good PPA is often one of the most challenging elements of wind project development.

This section covers the basics of a power purchase agreement and things to consider as you negotiate with a power purchaser. The main topics covered in this section are:

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Chapter 12: The Minnesota Flip


The Minnesota Flip business model was developed in response to a unique combination of federal incentives for wind development and state policies that encouraged development of community-owned wind projects. The structure has proven a successful model for landowners and equity investors interested in partnering in the development of wind projects. This partnership allows the equity investor to take advantage of federal tax credits, while providing local owners the economic benefits of ownership.

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Chapter 11: Choosing a Business Model


There are several options for structuring a community wind energy project. Business structure options should be evaluated based on their ability to deliver low-cost wind energy and local benefits, as well as on their profitability. In general terms, business arrangements are best when they:

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Chapter 10: Tax Incentives


In order to be financially competitive, most wind projects need to take advantage of federal and, where available, state tax incentives. It is critical to understand the role and mechanics of tax incentives while developing a commercial-scale community wind project because these incentives can represent one-half to two thirds of the total revenue stream over the first 10 years of operation due to the Federal Production Tax Credit (PTC) and Modified Accelerated Cost-Recovery System (MACRS) or other type of depreciation that can be applied to wind energy assets. You will need to consult a tax professional in the early stages of project planning to ensure that your financial projections are valid and accurately take into account the project’s tax burden and benefits.

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Chapter 9: Financing


Most commercial-scale community wind projects are multi-million dollar investment endeavors that require outside financing assistance. This section will give you some background on how to approach a bank or other financing entity. Loan terms will affect the bottom line of your wind energy project revenue, so understanding the requirements and options for financing your wind development are critical. Getting organized in the beginning will put your project in a much better negotiating position for acquiring favorable financing. With enough due diligence documentation, your project will be less risky and more attractive to a financing entity.

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Chapter 8: Costs

The cost of wind energy fell dramatically from the 1980s through 2003, then increased for most of the remainder of the decade. Then, as the recession hit, turbine orders declined and prices with them. Meanwhile turbine technology has significantly improved, so that they are  producing energy more efficiently than ever, which is the real bottom line.

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