Wind power is the fastest growing source of electricity generation in the United States. In 2003,
the installed U.S. wind power capacity increased by 1,700 megawatts (MW) to a total of 6,374
MW.1 Most of this additional capacity came in large projects of 50 MW or more, typically
owned by strategic investors who have developed or acquired a portfolio of projects. As wind
power generation continues to grow, these large projects and experienced developers will likely
continue to dominate wind power development. Because of their scale and access to capital,
these large projects are the fastest way to move towards increasing renewable energy’s share of
the generation mix—and they provide significant economic benefits to the communities where
they are located, from payments to farmers for wind rights and turbine easements to
construction-related spending to permanent operations and the maintenance staff at each project.
At the same time, there has been a growing interest in community wind power development.
While the notion of community wind varies, these projects are generally smaller scale (less than
20 MW), and are locally initiated and owned. Projects range from single turbines erected by
municipal utilities, school districts and tribal reservations to larger multi-turbine installations
owned by one or more local investors and landowners. These projects may capture and retain
more of the economic benefits locally (both construction-related and ongoing returns) and drive
continued reinvestment in the communities. As a result, community wind projects often enjoy
more favorable community support than large-scale commercial projects.
There have been numerous publications and conferences on community wind development, but
less specific attention on options for project structuring and financing. The goal of this handbook
is to identify critical financing issues and present several possible financing models that reflect
the differing financial positions and investment goals of various project owners/developers.
The handbook includes six sections:
• Section I describes various models for community wind power ownership.
• Section II examines sources of equity and debt financing and the steps necessary to secure
• Section III identifies federal grant and loan programs and state incentives for wind power
• Section IV reviews the federal tax incentives supporting wind power projects, the impact of
these incentives on project economics, and limitations on utilizing these incentives.
• Section V examines power purchase agreements and the value of green tags to community
wind power projects.
• The Appendix contains a list of operating community wind projects in the United States and
a list of project consultants and financing resources.