|Residential Wind Turbines|
|Credit Available||30% of total cost (materials & labor); no maximum
Unused credit may carry over to future tax years
|Timeline||Must be "placed in service" (ready and available for use)
Jan. 1, 2008 – Dec. 31, 2016
|Wind Turbines||Has nameplate capacity of not more than 100 kW|
|See summary chart: Stimulus at a Glance|
Soaring at least 30 feet above everything within a 500-foot radius and requiring abundant open land, residential wind turbines are too self-limiting by nature, among other factors, to become the granite countertops of renewable energy. But generous tax credits make wind an attractive option for certain remodeling clients in key markets.
A small wind energy system typically costs $3,000 to $5,000 per kilowatt for a grid-connected installation, according to the American Wind Energy Association (AWEA). The American Recovery and Reinvestment Act of 2009 (ARRA) is “a real important milestone” for residential wind power, says Mike Bergey, president of Bergey Windpower, of Oklahoma, whose small turbines are installed in all 50 states and over 100 countries.
Federal tax credits that had been capped at $4,000 can now be as much as $15,000 when applied to a 10 kW Bergey turbine that powers a 2,500-square-foot home. Even without state incentives, that credit alone can yield a payback within 10 to 30 years, depending on wind resources and electricity prices, Bergey says.
U.S. sales of “small wind” — turbines with capacities of 100 kW or less — were $77 million in 2008, 78% higher than 2007, and will grow 30-fold within as little as five years, says the AWEA. By 2010, 13 million U.S. homes will be candidates for the turbines: that is, connected to the utility grid, on at least a half-acre of land, and with a Class 2 or better wind resource.
Besides public acceptance, Ron Stimmel, the AWEA’s small-wind advocate, identifies three policy issues that can hinder residential growth: absent or restrictive permitting regulations, utilities’ net metering policies, and grid interconnection rules and policies. Another limiting factor is capitalization. John Abrams of South Mountain Company, a design/build firm on Martha’s Vineyard, is a longtime proponent of wind power; his preferred manufacturer is Abundant Renewable Energy. But he sees an uncertain future. “Along with cost and permitting issues, we feel that residential-scale turbines are currently made by small, under-capitalized companies.” He is more optimistic about community-owned wind co-ops, along with installations that give utility ratepayers ownership in wind’s energy production. Time and exposure are also in wind’s favor. —Leah Thayer, senior editor, REMODELING.
The ARRA provides a 30% uncapped investment tax credit on the purchase and installation of qualifying small wind electric systems with rated capacities of 100 kW or less. Systems must be installed between Jan. 1, 2008 and Dec. 31, 2016. Other provisions, such as a manufacturing tax credit, are expected to indirectly benefit residential wind power through increased competition and lower prices.
Local Look: States Weigh In
OHIO: The state’s Residential Wind Energy Incentive provides the lesser of $2 per kilowatt hour or 50% of the eligible cost of a qualified system, up to $25,000, on top of federal incentives. The work must be performed by licensed electricians or other approved companies.
Ohio also provides a number of incentives aimed at strengthening the supply chains involved in wind power. More than 200 manufacturers in the state make turbine components ranging from ball bearings to blades. Tax credits are expected to encourage these companies to create and retain jobs, among other things. —Leah Thayer