Best Practices - Wind Energy Siting Guidelines
Tom Hewson, Energy Ventures Analysis Inc|November 5, 2003
This letter, written by Tom Hewson, responds to a New York State resident who had inquired about the impact of industrial wind turbines on property values. The letter specifically critiques the REPP study. It provides as well an overview of other studies that existed as of Fall 2003.
"The issue simply comes down to nuisance and aesthetics. If the project creates a nuisance (noise, shadow flicker, TV/cell phone interference, radar interference), it can cause lower property values to adversely affected areas. People can simply apply their own personal evaluation criteria to determine the extent of the property change. What would it be worth to you? Generally, the bigger the nuisance, the larger the devaluation. Localities can minimize nuisances from wind projects by setting minimum setbacks, proper location siting and noise limits. My concern with the REPP study is that it doesn't try to examine the nuisance effect by selecting a large 5 mile area."
This letter, written by Tom Hewson, responds to a New York State resident who had inquired about the impact of industrial wind turbines on property values. The letter specifically critiques the REPP study. It provides as well an overview of other studies that existed as of Fall 2003.
"The issue simply comes down to nuisance and aesthetics. If the project creates a nuisance (noise, shadow flicker, TV/cell phone interference, radar interference), it can cause lower property values to adversely affected areas. People can simply apply their own personal evaluation criteria to determine the extent of the property change. What would it be worth to you? Generally, the bigger the nuisance, the larger the devaluation. Localities can minimize nuisances from wind projects by setting minimum setbacks, proper location siting and noise limits. My concern with the REPP study is that it doesn't try to examine the nuisance effect by selecting a large 5 mile area."
I'm an energy consultant that has done some work on reviewing proposed wind projects for citizen groups and utilities.
I did review of the AWEA report on property values that was done by REPP. The report was written under a "small" DOE grant that significantly limited REPP on what they could do. The author mentioned that they collected sufficient data in only 9-10 locations (each >10 MW) of the 26-30 sites in the survey. They focused their efforts on properties within 5 mile area. Given that some prior studies found more significant impacts much closer than 5 miles, I asked why such a large area was selected. He mentioned that given the buffering areas that there would be much fewer data points if they used an alternate criteria such as 1 mile.
REPP also mentioned:
•All assessors were very positive about wind power
•Some areas disposed of their sales records within 2 years or were not in electronic form to they were unavailable for the study.
•Some people wanted property near wind farms as a speculation play to offer additional wind sites to developers.
•Many areas were so remote that the few maintenance jobs offered were attractive
•In one Minnesota area, he mentioned people moved into areas with WTG's because they offered a larger tax base to fund schools.
The REPP study was brought up by the wind developers during public meetings in Michigan to support their contention that wind projects do not devalue local property values. However, you are correct that it is but one of a few studies that cover this issue. There are other studies that have come to different conclusions. All studies have flaws and it will remain difficult to isolate the property value changes to just one factor. A quick summary of the studies I have seen:
Studies Concluding Wind Turbines Devalue Local Property Values
•2001-02 Lincoln Township WI study comparing property sales prices to assessed values before and after wind farm construction. Assessor reported that property sales (vs. 2001 assessed values) declined by 26% within 1 mile and by 18 % > 1 mile of its wind farm project. However, study includes related party transactions. Moratorium Committee survey of County residents reported 74% of respondents would not build/buy within ¼ mile, 61% within ½ mile and 59% within 2 miles of wind farm.
•May 2000 County Guardian article Case Against Windfarms. Observations of English surveyors concluding wind turbines significantly decrease property values by as much as 30%.
•1996 Danish report Social Assessment of Wind Power-Visual Effect and Noise from Windmills- Quantifying and Valuation contained survey of 342 people living close to wind mills. Survey found 13% of people surveyed considered wind mills a nuisance and would be willing to pay 982 DKK per year to have them leave. Survey of house sale prices showed 16,200 DKK lower price near single windmills and 94,000 DKK lower price near wind farms versus similar houses located in other areas.
•Assessed values did decline significantly for properties adjoining Mackinaw City WTG after it started operation.
Studies Concluding Wind Turbines Do Not Devalue Local Property Values
•2002 Kittitas Valley Washington study by ECONorthwest Telephone survey of tax assessors views only. Conclude no adverse property impacts. No data provided to support position.
•May 2003 Renewable Energy Policy Report examines property values in areas within 5 miles of surrounding 9 large wind farms. Concludes presence of commercial scale wind turbines does not appear to harm property values.Uncertain about methodology used.
The issue simply comes down to nuisance and aesthetics. If the project creates a nuisance (noise, shadow flicker, TV/cell phone interference, radar interference), it can cause lower property values to adversely affected areas. People can simply apply their own personal evaluation criteria to determine the extent of the property change. What would it be worth to you? Generally, the bigger the nuisance, the larger the devaluation. Localities can minimize nuisances from wind projects by setting minimum setbacks, proper location siting and noise limits. My concern with the REPP study is that it doesn't try to examine the nuisance effect by selecting a large 5 mile area.
Aesthetics are much harder to assess and to regulate since people have very different tastes. One needs only look at the new housing construction market. It is very difficult for a community to stop a new house construction project just because another person thinks it is ugly.
There are some sample local zoning ordinances that you can get from Cathy Lawton that may help you in your quest.
Hope this helps. As mentioned below, your effort is timely.
Tom Hewson
Energy Ventures Analysis Inc
PS- Are you aware of the ongoing renewable portfolio standard proceedings in NY are going to push the rapid development of wind projects in NY. According to the State of NY Public Service Commission, the 25% RPS will require development of 3,279 MW of additional wind capacity (2,070 MW in Western NY, 579 MW offshore Long Island, 500 MW in PA, ...). They estimate wind costs ($30-55/MWh) by making assumptions on declining capital costs ($1,010/MW in 2006, $852/MW in 2013) and improved capacity factors (37%-Class 5, 33%-Class 4, 29% Class 3, 34%- offshore).