The U.S.

Small Wind Turbine Industry

ROADMAP
A 20-year industry plan for small wind turbine technology
 AWEA SMALL WIND TURBINE COMMITTEE

ROADMAP
A 20-year industry plan
for small wind turbine
technology

American Wind Energy Association (AWEA)

Small Wind Turbine Committee

Contributing Committee Members:

Chair, Mike Bergey, Bergey Windpower

Tod Bartholf, Consultant

Kathy Belyeu, AWEA
Dave Blittersdorf, NRG Systems
Alan Caldwell, Prime Energy
David Calley, Southwest Windpower
Craig Hansen, Windward Engineering
Bob Markee, Energy Unlimited
Vaughn Nelson, Alternative Energy Institute
Gary Norton, Northern Power Systems
Robert Sherwin, Atlantic Orient Corporation

Facilitated by Merwin Brown, National Renewable Energy Laboratory (NREL)

Coordinated by Trudy Forsyth, NREL

June 2002

Prepared by AWEA and published by the National Wind Technology Center,

National Renewable Energy Laboratory, Golden, Colorado, for the
U.S. Department of Energy, Office of Wind and Hydropower Technologies,
Energy Efficiency and Renewable Energy.

NOTICE

Neither the United States government nor any agency thereof, nor any of their employees, makes
any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy,
completeness, or usefulness of any information, apparatus, product, or process disclosed, or
represents that its use would not infringe privately owned rights. Reference herein to any specific
commercial product, process, or service by trade name, trademark, manufacturer, or otherwise
does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United
States government or any agency thereof. The views and opinions of authors expressed herein do
not necessarily state or reflect those of the United States government or any agency thereof. 1
 CONTENTS

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

The Technology Opportunities . . . . . . . . . . . . . . . . . . . . 11

The Market Potential . . . . . . . . . . . . . . . . . . . . . . . . . . 14

U.S. Market
Export Market

The Barriers Identified . . . . . . . . . . . . . . . . . . . . . . . . . 21

Near-Term Technology Barriers
Near-Term Market Barriers
Near-Term Policy Barriers

Mid-Term Technology Barriers

Mid-Term Market Barriers
Mid-Term Policy Barriers
Action Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Near-Term Technology Goals and Actions
Mid-Term Technology Goals and Actions
Long-Term Technology Goals and Actions
Near-Term Market Goals and Actions
Mid-Term Market Goals and Actions
Long-Term Market Goals and Actions
Near-Term Policy Goals and Actions
Mid-Term Policy Goals and Actions
Long-Term Policy Goals and Actions
The Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Public Policy
Research, Development and Demonstration
Small Wind Turbine Industry
Cooperative Strategy
Summary Schedule of Actions
Research Priorities Identified
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Appendix: Detailed List of State Incentives

2
 FOREWORD

Millions of homeowners, farmers, and U.S. small wind turbine industry, its part-
small business owners all across ners, and its supporters is to deliver the
America dream of the day they can gen- products Americans want at a price they
erate their own electricity from clean, can afford. This task requires progress
sustainable renewable resources. They on several fronts—from public policy ini-
want the freedom of choosing how their tiatives, to technology development, to
electricity is produced, who produces it, market development.
and what environmental impacts their
consumption generates. A full 91% of In addition to meeting the dreams of
Americans support "investments in new Americans for clean energy, the U.S.
sources of energy, such as solar, wind, small wind turbine industry is also posi-
and fuel cells," according to a Gallup tioned to help the 2 billion people
poll conducted November 27, 2001. around the world who do not have
access to electric power.
For many of these Americans, small
wind turbine technology offers the best
near-term hope of supplying products to
fulfill that dream. The task before the

3
 EXECUTIVE SUMMARY

VISION STATEMENT:
Small wind turbine technology can be a But a great deal of work must be done to
meaningful contributor to our energy securi- realize the potential for small wind technol-
Our vision is to make ty, strategic technology, and long-term eco- ogy. The current products are too few in
small wind turbine technol- nomic growth. Small wind turbines are a number, too expensive, and not reliable
ogy1 a significant contribu- "distributed" generation source with a very enough to ignite the market. Customers face
tor to America’s clean attractive near-term potential for low-cost, too many obstacles in financing, permitting,
energy supply portfolio by rapid growth. Small wind turbines can miti- and installing small wind energy systems,
gate our dependence on foreign energy and most receive few, if any, financial
providing consumers with
supplies while providing distinct benefits to incentives to investment from state and
an affordable renewable our domestic economy. Electricity generated federal governments.
energy option for their by small wind turbines uses a clean, non-
homes and businesses polluting energy source—the wind. The long-term industry vision is of a major
and to make wind energy new category of home energy appliance. In
a significant contributor to The AWEA Small Wind Turbine Committee order to achieve 50,000 MW the small
recognizes the importance of collaborative wind turbine industry will have to grow to
improving the quality of
planning and R&D partnering to the future over $1 billion per year and employ over
life and economic opportu- vitality of the technology—especially 10,000 people in manufacturing, sales,
nities of people in devel- because no segment of the industry is cur- installation, and support. This is possible
oping nations worldwide rently large enough to guide the entire infra- due to the sheer number of homes (15
through electrification. structure and competitive investments on its million) and small businesses (1 million) that
own. By developing this "roadmap," the could effectively use small wind systems if
U.S. small turbine industry is addressing the the economics were favorable.
critical needs of small wind turbine technol-
ogy and is ensuring U.S. industry leader- In this roadmap, the industry has identified
ship over foreign competitors. Our docu- barriers and appropriate near-term, mid-
ment is a framework that can serve to term, and long-term actions to address these
1
Small wind turbines (SWT) are
develop strategic plans for and investments barriers. The industry has also tried to prior-
defined as having a generating
capacity up to 100 kilowatts (kW) in this technology and business—specifical- itize these actions and identify priorities for
(~60 ft rotor diameter). ly as a U.S. strategic and national resource. R&D efforts. The roadmap is intended to
help guide government and corporate
It is time for a combined effort on the part policy towards the overall goal of making
of government and industry to increase the small wind a significant contributor to
contribution of small wind turbines to our America’s domestic energy supply.
electric generation mix. In 2001, annual
sales of the U.S. small wind turbine industry
amounted to about 13,400 turbines. We
estimate that turbine sales will increase, and
by 2020, small wind turbines could con-
tribute 3%, or 50,000 MW, to America’s
electric supply. Increasing the energy contri-
bution from this home-grown industry could
increase our energy security and our gross
national product as well as our energy
supply. In the process, this technology will
also give the public more energy choices
and make electricity markets more competi-
tive.

4
 EXECUTIVE SUMMARY

Table 1: Summary of the Barriers Identified

Technology Barriers Market Barriers Policy Barriers
Near-term Near-term Near-term
-High cost of wind turbines -Lack of effective standards -Lack of federal incentives
-Insufficient product reliability -Low visibility of the industry and technology -Restrictive zoning
-Misconceptions about the wind resource -NIMBY and environmental concerns
-Excessive interconnection requirements
and unequal billing policies
-Undervaluation of green energy
-Disincentives in the tax code

Mid-term Mid-term Mid-term

-Turbine productivity hampered -Insufficient capitalization -Lack of more state-based incentives
by power electronics issues -Complicated financial impact -Lack of sustained national incentives
-Domestic market requirement—quiet -Lack of multilateral bank funding for export -Lack of interconnection standards
operation markets -Lack of national models for net metering and
-Reliability zoning rules
-Need for better technology tools

"This is an exciting time for the small wind turbine industry. We are very close to the ‘tipping point’ where production
volumes would skyrocket, causing production costs to plummet. With the right federal leadership and support in a few more
states, I think we will get there." - Mike Bergey, Chair, AWEA Small Wind Turbine Committee

5
 EXECUTIVE SUMMARY

Table 2: Summary Schedule of Actions

Technology Actions Market Actions Policy Actions
Near-Term - Reduce costs by new turbine - Develop nationally recognized - Develop a strategy to work with
(0-3 years) development activity for low wind standards for participation in stimu- state policies for inclusion of small
speed sites and new component lus programs wind
development for SWT - Publish SWT articles in corner- - Develop a national policy for an
- Research reliability concerns such stone magazines such as Scientific SWT tax credit
as lightning, corrosion, bearing American, to create more "SWT - Work to eliminate zoning
lubrication, alternator winding insu- buzz" restrictions
lation, electronics - Revise new U.S. wind maps for - Develop model zoning ordinances
- Continue focused long-term SWT, 30 m hub height and .25 and blueprint templates of zoning
research unique to SWT - furling, shear, new legends regulations, interconnection agree-
durability, blade aerodynamics, - Explain turbine micrositing ments, and other policies
noise, and power electronics - Provide information to remove mis- - Work to reduce excessive
- Develop packages with other dis- conceptions about the wind interconnection requirements
tributed generation and storage resource
technologies - Incorporate the value of environ-
mental attributes of small wind into
electricity prices

Mid-Term - Work to improve the reliability and - Update national market study - Influence/develop new state and
(4-10 years) reduce the cost of power - Characterize the export potential for national incentives
electronics U.S. manufacturers and work with - Disseminate and expand informa-
multilateral development tion on zoning regulations, intercon-
- Work to eliminate noise from small programs
turbine designs nection agreements, and net meter-
- Establish consumer-friendly cus-
- Develop consumer-friendly tomer financing programs, including ing rules
performance predictions lease options - Develop a more consumer-friendly
- Improve analytical design tools - Increase the number of products national interconnection standard
- Continue the development of pack- available (models and size range)
ages with other distributed genera- for different market segments
tion and storage - Increase outreach and education
technologies

Long-Term - Develop hydrogen-based systems - Stimulate the emerging micro-power - Develop policies to help deliver
(11+ Years) - Develop blackout protection revolution, of which SWTs are part higher service levels to rural
strategies customers
- Establish links with storage and
other power technologies

Crosscutting - Continually work to reduce cost - Continue to develop standards for - Continue to develop standards for
(Ongoing) and improve reliability reliability, durability, and longevity reliability, durability, and longevity
- Continue to develop standards for
reliability, durability, and longevity

6
 INTRODUCTION

The U.S. Small Wind Turbine Industry In 2001, annual sales of the U.S. Small
Roadmap is the result of collaboration over Wind Turbine Industry are estimated to be
an 18-month period among the members of 13,400 turbines valued at about $20
the Small Wind Turbine Committee of the million.[1] While this is about the same level
American Wind Energy Association as sales in the early 1980s, it is only about
(AWEA). Many industry leaders contributed 2% of the value of sales of large wind tur-
to this roadmap that will guide activities to bines in the United States.[2] The success of
achieve the vision of the small wind turbine the large wind turbine industry shows the
industry of the United States. impact of sustained, substantial support from
government programs and policies (both at
State of the Small Wind Turbine home and abroad). Support such as federal
Industry and state tax credits was discontinued in the
The modern industry for small wind turbines mid-1980’s for small wind systems. This led
was born in the energy crisis of the 1970s. to a significant shrinking of the industry and
Responding to the crisis, consumers turned a loss of momentum in technology and
to restored vintage designs from the 1930s, market development.
to newly manufactured machines based on
the old designs, and to new wind turbine There are several good reasons why it is
technologies developed to meet modern time for a combined effort from government
needs. Most of these turbines were connect- and industry to increase the contribution of
ed to the utility grid. This surge in the U.S. small wind turbines to our generation mix.
small wind turbine industry, fueled by First, there is the potential for real contribu-
federal energy tax credits, state incentives, tion to our energy supply. We project that
and high electricity prices, peaked in 1983. small wind turbines could contribute 3% of
Then energy prices fell, federal energy tax U.S. electrical consumption by 2020.
credits expired, and state incentives gradual- Second, small wind technology is a home-
ly fell by the wayside. By 1986, the people grown industry. While the market for other
who still wanted small wind turbines were renewable energy technologies is dominated
interested in stand-alone or off-grid applica- by foreign companies, the U.S. small wind
tions for remote homes. While serving this turbine industry is the leader in markets at
smaller domestic market, U.S. manufacturers home and abroad.
expanded their efforts in markets overseas.
Third, the market for small wind turbines
Since 1999, electricity prices have been also fuels companion industries, including
rising again. People are once again con- those that market composite products, steel,
cerned about the security of our energy sup- towers, power electronic equipment, and
plies and the centralized generating facilities construction projects. Fourth, while produc-
that rely on those sources of energy. And ing energy, small wind turbines produce no
some people want independence from elec- environmental emissions. Fifth, small wind
tric utilities. There is also a steadily increas- turbines help meet the national need for
ing concern about global warming. State energy diversification and national security.
governments, under utility restructuring, have And finally, the American public overwhelm-
enacted significant incentive programs that ingly supports the expansion of renewable
buy down the initial cost of small wind energy, and they stand to benefit from more
turbine systems, thereby tunneling through choices about where their energy comes
the cost barrier. These incentives are funded from. Small wind turbines
through system benefit charge programs
could contribute 3% of
which are significant—totaling $3.5 billion Recently, the market for small wind turbines
in 2001 for programs that include incentives has been growing 40% per year. As we U.S. electrical con-
for small wind turbines. All these factors discuss later, the potential market for resi- sumption by 2020.
have increased interest in small wind tur- dential and business applications of small
bines connected to the utility grid. wind turbines is tremendous because it is
Meanwhile, the U.S. industry continues to clear that the turbines work and that people
dominate the overseas market for small wind want them. However to realize our vision,
turbines. significant challenges lie ahead in the
market, policy, and technology areas. We
7
 INTRODUCTION

must overcome these challenges as barriers State of Small Wind Turbine

to widespread use of small wind technology. Technology
Then, we devise actions needed to over- The U.S. small wind turbine industry offers
come these barriers. And finally, we devise a wide assortment of products for various
a strategy of public/private cooperation to applications and environments. Machines
complete these actions and reach our goals. range in size from those that generate 400
In the end, we expect to deliver small wind watts (W) of electricity for specific small
turbine products that people desire and that loads such as battery charging for sailboats
they can afford, allowing individuals to con- and small cabins, to 3–15 kilowatt (kW)
tribute to our energy security. systems for a home, to those that generate

Figure 1: Small wind

turbines are being sold
for use in many differ-
ent environments.

8
 INTRODUCTION

up to 100 kW of electricity for large loads fore have relatively low maintenance
such as a small commercial operation. requirements.

Small wind turbines can operate effectively Thanks to continuous development within
in most of the rural areas of the United the industry and in collaboration with the
States. In fact, about 60% of the United U.S. Department of Energy (DOE) small
States has enough wind for small turbines to wind turbine projects, several new features
generate electricity. Today’s small turbines are in development for incorporation into
have been designed for high reliability with commercial turbines. Advanced airfoils,
only two or three moving parts and there- super-magnet generators, smart power elec-

9
 INTRODUCTION

tronics, very tall towers, and low-noise fea- ty, eliminate noise concerns, and lower
tures will help reduce the cost of electricity manufacturing and installation costs.
and increase the acceptability of this tech- There is much to be done both to incor-
nology. porate the technologies currently under
development and to enhance manufactur-
VISION STATEMENT: Small wind technology has been improv- ing. As an example of the cost reduc-
ing since the 1970s. However, it is still tions that are possible, the industry esti-
Our vision is to make generally acknowledged that more work mates that high-volume manufacturing
is needed to improve operating reliabili- alone could reduce costs 15–30%.
small wind turbine tech-
nology a significant con-
tributor to America’s
clean energy supply
portfolio by providing
consumers with an
affordable renewable
energy option for their
homes and businesses
and to make wind
energy a significant con-
tributor to improving the
Key elements of our vision
quality of life and eco-
nomic opportunities of
1. Enhance America’s energy diversity
people in developing
and security
nations worldwide
2. Increase competition in electric
through electrification.
markets by giving consumers the
choice of a clean power source
3. Develop small wind turbines as a
household energy appliance and
business tool (by lowering competi-
tive energy costs)
4. Build an industry to meet the explo-
sive growth potential
5. Contribute to rural infrastructure
development worldwide

10
 THE TECHNOLOGY OPPORTUNITIES

Modern small wind turbines are not like to a solar electric system operating in the
our grandparents’ wind generators from same environment. Both technologies
the 1920s and 1930s. Today’s small tur- have the potential for significant cost
bines borrow from aerospace technolo- reduction and for substantial roles in dis-
gies with sophisticated, yet simple, tributed generation markets. In our expe-
designs that allow them to operate reli- rience, the public is most concerned with
ably for up to a decade or longer finding a clean technology they can
without maintenance. Current products afford, whether that be wind or solar or
are designed for operational lives of 20 a combination of both.
to 30 years, and they have withstood
everything, short of a direct hit from a Responding to more active markets in the
tornado, that Mother Nature can throw last few years, the small wind turbine
at them. As small wind turbine technolo- industry has increasingly adopted
gy has matured, the products have advanced component technologies and
become mechanically simpler and more state-of-the-art design tools such as three-
robust. dimensional solid modeling and compu-
tational fluid dynamics. Technologies
As shown in Table 3, small wind turbines such as unique high-efficiency airfoils,
are very competitive with other renew- neodymium-iron-boron "super-magnet"
able energy technologies that are suit- generators, pultruded FRP blades,
able for homes, farms, and small busi- graphite-filled injection molded plastic
nesses. Small wind systems, for example, blades, special purpose power electron-
cost less than half the price of compara- ics, and tilt-up tower designs have both
ble photovoltaic systems. We do not lowered costs and increased efficiency.
foresee a time when solar electric The long-term vision of the industry is to
systems will be less expensive than small produce small wind turbines that are
wind systems. Solar electric systems do accepted as common household appli-
have the advantage of wider geographic ances in the same way that heating and
applicability, and they can be used in air-conditioning systems are today. By
denser suburban or even urban environ- virtue of their compelling economics,
ments. However, the wind resource in a these new turbines will achieve high
good area can lead to much higher market penetration in areas with lower
capacity factors for small wind compared

Table 3: Comparison of
Home-Based Renewables

Status of the Solar Thermal

Small Wind Photovoltaics
Technologies Electric

Status Commercial Demo Commercial

Installed cost $4/Watt $10/Watt $8/Watt

Payback Period 15 Years 30+ Years 25 Years

Cost Potential $1.50/W in 2010 ? $3/W in 2010

Typical Site Rural Southwest Suburban

Available Resources Poor–Great Poor–Good Poor–Good

11
 THE TECHNOLOGY OPPORTUNITIES

housing densities and sufficient wind relationship between DOE/NREL and the
resources. small turbine industry is important today,
and it will become increasingly important
People, however, do not tend to live as international competition heats up
where the wind howls, so achieving high over the next five to ten years. All parties
market penetration rates will require need to realize that large wind turbines
small wind turbines that are specially are now in their seventh or eighth gener-
designed to work effectively in low wind ation of technology development, while
resource areas. These turbines of the small wind turbines are only in their
future will need to have relatively larger second or third.
rotors to capture more energy. But they
cannot sacrifice robustness because even For its part, the industry is striving to
areas with low average wind speeds reduce the cost of electricity generated
experience severe weather. The new tur- by small wind turbines. In 2002, typical
bines must be extremely quiet, so that 5- to 15-kW residential wind turbines
they are seldom heard above the local cost about $3,500 per installed kilowatt.
background noise. They must be able to These turbines produce about 1,200
operate for 10 to 15 years between kWh per year of electricity per kilowatt
inspections and/or preventive mainte- of capacity in an area with a DOE class
nance, and they must offer a reasonable 2 wind resource. 2 By 2020, the industry
expectation of a 30- to 60-year operat- hopes to have lowered the installed cost
ing life. Most important of all, the small to between $1,200 and $1,800 per kilo-
wind turbines of the future must be watt (smaller systems being relatively
affordable without significant subsidies. more expensive) and to have raised the
productivity level to 1,800 kWh per
Achieving these goals will require further installed kilowatt. If these goals are met,
advances in small wind turbine technolo- the 30-year life cycle cost of energy will
gy, major improvements in small turbine be in the range of $0.04 to
manufacturing, and more efficient instal- $0.05/kWh, lower than virtually all resi-
lation techniques. The U.S. Department dential electric rates in the country
of Energy (DOE) and the National today.
Renewable Energy Laboratory (NREL)
have critical roles to play in accelerating To further enhance the attractiveness of
the development and adoption of new small wind turbines to consumers, there
small wind turbine technology and manu- is also a need for meaningful, appropri-
facturing techniques. A close working ate, and cost-effective standards and a
certification program for them. Some
new entrants to the industry have signifi-

Costs and electricity production for

typical 5- to 15- kW residential
wind turbines

2002 2020

Cost/kW $3,500 $1200–1800

Annual Electricity 1,200 1800

Production (kWh)

2
Numbers provided by Mike Bergey, chairman AWEA Small Wind Turbine Committee, Jan. 15, 2002.
12
 THE TECHNOLOGY OPPORTUNITIES

cantly underestimated the engineering To assist industry in addressing tech-

rigor and expense required to deliver a nology barriers, four models of govern-
reliable small wind turbine product. And, ment/industry collaboration are
in light of recurring instances of exagger- employed.
ated claims, consumers have had trouble
sorting out reasonable from unreason- 1. Research conducted at national
able claims of performance. The stan- laboratories and universities with
dards and certification programs that input from members of the industry.
exist for large wind turbines are not 2. Applied research projects conduct-
appropriate for small wind turbines. ed at the facilities of small wind
Appropriate standards for small wind tur- turbine companies with support
bines are under development by the from the government through com-
international industry and by research petitive procurement.
institutions. However, the U.S. industry 3. Applied research projects involving
and DOE must also work to ensure that companies, universities, and
related standards, such as electrical grid national laboratories.
interconnection standards, are justified 4. Privately funded research and
and do not unduly raise the costs of development.
owning a small wind turbine.
The opportunities offered by improved
The industry believes that research coop- technology can be achieved through the
eration between the private and public cooperative activities discussed in this
sectors is strategically important if the roadmap for the small wind turbine
U.S. industry is to maintain its leadership industry. Work by industry members,
position. The engineering challenges pre- research institutes, state and local gov-
sented by the interlocking disciplines of ernments, and DOE can help increase
aerodynamics, structures, controls, elec- the contribution of small wind turbines to
trical conversion, electronics, and corro- the electricity generation mix.
sion prevention are formidable. There
are also a number of generic technology
opportunities that are not likely to be
fully explored by the private sector
alone. Government and industry must
work together to build a better small
wind turbine.

13
 THE MARKET POTENTIAL THE MARKET POTENTIAL

In 2001, we estimate that 13,400 small U.S. Market The most recent public market study for The 1981 ADL study was quite conserva-
wind turbines were manufactured in the We estimate that small wind turbines small wind generators was the A. D. Little tive. Although it considered wind
United States. More than 50% of these have the potential to contribute up to 8% study sponsored by DOE in 1981. [2] resources, electricity costs, and available
were exported. We believe that both the of U.S. electrical demand in 2020. Our That report (the ADL study) projected a incentives, it excluded more than 100
domestic and foreign market for small industry goal is to install turbines that market potential of 3.8 million small wind counties with high population densities.
wind turbines will continue to grow. This will generate at least 3% of U.S. electri- systems installed in grid-connected appli- Today, we know that many of these coun-
roadmap is designed to accelerate this cal demand in 2020 or 6-8% of residen- cations. If the average generating capaci- ties have small wind systems and that
growth to its maximum potential. tial electricity demand. This will require ty of these systems were 10 kW, then the thousands of properties in these counties
small wind turbines installed with a total potential contribution to the nation’s gen-
generating capacity of 50,000 MW. eration mix would be 38,000 MW.

The goal for the small

wind turbine industry
is a generating capaci-
ty of 50,000 MW or
the ability to satisfy
3% of U.S. electrical
demand in 2020.

Figure 2: Energy pro-

duction for small wind
turbines in the United
States.

14 15
 THE MARKET POTENTIAL

Table 4: Residential Market Potential

for Small Wind Turbines
Millions of U.S. Homes Connected to the Utility Grid

2000 2010* 2020

Homes with 1/2 to 1 acre of land N.A.** 12.0 13.9

Homes with more than 1 acre of land 21.6 25.2 29.3

Gross potential number of homes for wind turbines 21.6 37.2 43.2

Net potential number of homes for wind turbines 7.6 13.0 15.1

*The number of homes has been growing 1.54% per year (U.S. Census Bureau, American Housing
Survey, Census Bureau: Washington, D.C., 1998).
**Appropriate small wind technology not yet available for lots under one acre.

are suitable for small turbines. We also In 2020, there will be approximately 43
know more about the wind resource and million homes with 1/2 acre or more of
can better estimate the number of homes land. Of these homes, we estimate 65%
in suitable wind regimes. will be prevented from using small wind
technology because the wind resource is
In this roadmap, we estimate the poten- not sufficient, 4 because of restrictive
tial contribution of small wind turbines by zoning and covenants, or because of
dividing the market into sectors. proximity to airports or other sensitive
areas. This will leave 15.1 million homes
Rural Residential Market Sector— with the potential to install a small wind
Distributed Generation turbine. If each of these homes installed
a 7.5-kW machine, the total contribution
The largest potential market for small wind tur- to generating capacity would be
bines is for homeowners in rural areas where 113,000 MW. (see Table 4)
wind-generated electricity can reduce utility
bills. In 1998, American homes used 1.1 tril- Other Domestic Markets
lion kWh or 35% of total electricity sales.
Electricity consumption in the residential When combined, other markets for small
sector exceeds the consumption in either com- wind turbines in the United States offer
mercial or industrial sectors. Homeowners significant opportunities to expand elec-
buy wind turbines to reduce their electricity tric generation capacity. For example,
bills, and federal laws (such as PURPA 210) about two million medium-sized commer-
guarantee their right to use them.3 While cial buildings 5 are candidates for small
some wind turbines may be installed when a wind turbines of 10 to 100 kW. In addi-
new home is built, most market opportunities tion, public facilities such as schools and
will be for installations at existing homes. A government buildings could also use
small wind turbine produces energy that is small wind turbines at suitable sites.
either consumed immediately in the home or
transferred to the power grid and consumed Another distributed generation market
by a neighbor. sector includes industrial and commercial
customers who are connected to the

3
To meet the electrical needs of a typical home, a small wind turbine in a moderate wind regime must have
a rotor diameter of 16 to 25 feet and sit on a tower from 60 to 150 feet tall. These dimensions are not suit-
able for homes on small lots.
4
The homes will be located in areas with DOE wind class 1. DOE wind class 2 or 3 is considered necessary
with today’s technology for effective production of electricity with small wind turbine generators.
5
Fewer than 25,000 square feet under one roof.
16
 THE MARKET POTENTIAL

utility grid and may have back-up gener- farms, and livestock. Today, there are
ation requirements, which could easily also new wind-electric water pumping
be integrated with a larger small turbine. systems for which the turbine can be
Since the utility rate structure is typically located where there is good exposure to
different from the residential market (e.g. the wind, and it does not have to be
demand charges), further study is located near the well and pump.
needed to specifically define this market. However, for low wind speed sites, the
mechanical water pumper still offers
Where the utility grid is not available, more economic water pumping.
stand-alone or hybrid6 systems could
provide electricity for homes, communi- Deregulation of the telecommunications
ties, water pumping, and telecommunica- industry and the rapid growth in wireless
tions services. The Energy Information systems has spawned growth in the
Administration (EIA) estimates that there development of remote broadcast facili-
are 200,000 off-grid homes in the U.S. ties. The preferential method of powering
This is already a very active market for these facilities is hybrid systems that
small wind systems. combine generation from solar, wind,
and diesel systems.
There are also a number of off-grid com-
munities that are remote, isolated, and These other markets could contribute up
produce their electricity with diesel or to 25,000 MW of generating capacity
gasoline generators. Alaska, for by 2020. From this discussion, we con-
example, has 91 villages powered by clude that the total installed capacity for
diesel generators, serving a population small wind turbines in 2020 could be
of about 42,000 people. In addition, 140,000 MW across all markets.
several hundred miscellaneous remote However, the goal of the AWEA Small
facilities are powered by diesel genera- Wind Turbine Committee is to install
tors ranging in size from 2 to 250 kW. 50,000 MW of small wind turbines by
2020. (See Tables 4 and 5)
In addition, water pumping for livestock
and off-grid facilities is still a sizable According to figures taken from the most
market. In the early part of the 20th recent EIA documents, the total generat-
century, the United States had about ing capacity in the U.S. in 1999 was
three million mechanical windmills in approximately 745,000 MW. According
operation, supplying water for homes, to the EIA Annual Energy Outlook 2001,

Table 5: Other Potential Markets for Small Wind

Turbines in the United States in 2020 [3]
Units Avg size in kW Total MW

Commercial buildings 675,000 25 16,875

Public facilities 160,000 50 8,000

Off-grid homes 150,000 3 450

Off-grid communities 200 250 50

Water pumping 350,000 1 350

Telecommunications 2,000 2 4

Total 25,729

6
Hybrid systems combine other generation such as solar cells or gas generators along with storage batteries
to provide reliable power off-grid.
17
 THE MARKET POTENTIAL THE MARKET POTENTIAL

Figure 3: Incentives for

small wind turbines in
residential applica-
tions.
Notes:
1. Incentives change
often.
2. Net metering has not
been determined for
all municipal utilities
and rural electric
cooperatives.

the projection for 2020 is 1,060,000 small wind turbine markets, even with produce an estimated 132 billion kWh to 50,000 MW in 2020 would require a
MW of generating capacity and 4,804 attractive incentives and favorable poli- of clean electricity per year, or approxi- doubling of the market each year for
billion kWh in demand. cies, will not match the pace of market mately 3% of projected total U.S. several years and then require sustained
penetration of other common household demand. At this level of capacity, small sales growth in the range of 50–55% per
Although the domestic potential for small electrical devices with lower price tags wind systems would be providing 6-8% year. In this scenario, the domestic small
wind generating capacity is estimated at and easier implementations. of residential sector electrical demand. wind turbine industry would reach
140,000 MW in 2020, we do not Our goal of 50,000 MW of small wind The EIA Annual Energy Outlook docu- annual sales of $1 billion and employ
believe that this is a realistic goal. The capacity by 2020 is aggressive but ment forecasts that the residential electric approximately 10,000 people in 2020.
limitation we see is market growth, not achievable given the right public policy sector demand will be 1,701 billion
manufacturing capacity or sales and environment, particularly over the next kWh in 2020. Export Market
support infrastructure. The growth of ten years. Fifty gigawatts (50,000 MW) U.S. manufacturers of small wind tur-
of small wind turbines in 2020 would Growing the domestic market from its bines currently export more than 50% of
current installed capacity of 15–18 MW their production and have a leading
18 19
 THE MARKET POTENTIAL

share of the world market for this tech- carbon dioxide per kilowatt hour than
nology. The foreign market for grid-con- diesel generators do. Small wind systems
nected wind turbines is fueled by electric- can be used to electrify single homes
ity prices more than double those faced (<500 W) or villages (<50 kW). There
by U.S. consumers. In addition, it has are also a myriad of special uses of
been estimated that about 2 billion wind electricity, such as making ice for
people in the world do not have access coastal fishing villages, charging batter-
to electricity for domestic, agricultural, or ies for distribution to single homes, and
commercial uses. 7 The traditional method purifying water for drinking.
of providing electricity by extending the
distribution grid has proved to be expen- Developing countries have a high poten-
sive and poorly suited to the low con- tial demand for small wind systems
sumption levels of communities in devel- because they normally do not have
oping nations. And the number of homes major electrical power plants serving
without electricity is increasing because rural areas. However, the people are
the birthrate is outpacing the electrifica- usually too poor to buy small wind
tion rate. systems and need financial assistance
from their government in order to afford
Small-scale renewable energy systems them. This assistance is, today, almost
(wind, micro-hydro, and solar) are often exclusively directed to subsidizing exten-
less expensive to install than line exten- sion of the grid and installing diesel gen-
sions. Small turbines are less expensive erators. A breakdown of the estimated
to operate and produce much less export market potential for 2000, 2010,
and 2020 time frames is shown in
Table 6.

Table 6: Potential Markets for Small Wind Turbines in

Foreign Countries
2000 2010 2020

Number Avg size Number Avg size Number Avg size

Total MW Total MW Total MW
(millions) (kW) (millions) (kW) (millions) (kW)

Single home systems 150.0 0.2 30,000 195.0 0.3 58,500 260.0 0.4 104,000

Village systems 3.8 10.0 38,000 4.9 10.0 49,000 6.6 10.0 66,000

Facilities 7.0 1.0 7,000 9.1 1.5 13,650 12.2 2.0 24,400

Miscellaneous 5.0 1.0 5,000 6.5 1.5 9,800 8.7 2.0 17,400

Totals 80,000 130,950 211,800

Source: AWEA Small Wind Turbine Committee, 2001.

7
World Bank, 2000.
20
 THE BARRIERS IDENTIFIED

Identifying and prioritizing barriers is an Near-Term Market Barriers

important prerequisite to industry planning.
Different companies and other stakeholders Lack of effective standards
often have differing views on the most
important barriers, and there is a natural As the domestic market continues to
tendency to focus on short-term challenges. expand, consumers need protection from
Reaching consensus on the barriers unscrupulous suppliers chasing the latest
required a number of meetings and size- trend in search of wealth. Further, responsi-
able investment in time, but this consensus ble small turbine manufacturers need a
provides the foundation for plotting the path baseline for establishing turbine perform-
to a billion-dollar industry. ance and credibility. There are existing
international safety and draft national per-
Outlined below are technology, market, formance standards for small turbines that
and policy barriers for the near-term, mid- could be used by state or national incentive
term, and long-term time frames. programs. The issue is the cost to meet the
testing and documentation requirements of
these standards.
Near-Term (0–3 Years)
Technology Barriers The existing design standards are primarily
related to structural safety and do not direct-
High costs of wind turbines ly address issues of reliability, durability,
and longevity. There is no equivalent to
Although people want small wind turbines, Consumer Reports in the small wind indus-
most find the price is too high. System costs try.
can be reduced by increasing production
rates and advancing the technology. Low visibility of the industry and tech-
Regarding production rates, small wind tur- nology
bines are produced in limited quantities, so
there are only limited economies of mass There are relatively few small wind turbine
production. Advances in technology, such installations, so people just do not see small
as new airfoils for blades, super-magnet wind turbines very often. In addition, the
generators, and power electronics can companies of the small wind turbine indus-
make small wind turbines cheaper to build, try have limited resources and capabilities
more productive, and more reliable. The to promote the technology. Unlike the solar
cost to consumers can be reduced with industry, there are no Fortune 500 compa-
incentives. nies involved at this time in the small wind
industry. Adding to the issue, DOE has
Insufficient product reliability focused the majority of its resources and
publicity on solar technologies.
It is a substantial challenge to design, man-
ufacture, and install small wind turbines that Misconceptions about the
are low in cost and yet rugged enough to wind resource
withstand 20 to 30 years of operation in
weather that is often severe. Small wind The attention given to wind farm develop-
turbine technology development is both art ments in high-wind areas has convinced
and science. The true measure of a new some people that they must have an excep-
design is often not known until several years tional wind resource in order to benefit from
of operation at dozens of sites. At present, wind technology. However, small wind tur-
there is no way to effectively duplicate the bines are designed to operate effectively in
wear and tear of the real world during the the lower wind speed areas where most
product development stage. As a result, reli- people live and work. DOE wind maps
ability has historically been the Achilles heel have inadvert-ently exacerbated the
for small wind turbine technology. problem by classifying wind regimes
according to their potential for wind farm
development.

21
 THE BARRIERS IDENTIFIED

Near-Term Policy Barriers planning to install a small wind turbine

system and the local zoning boards that
Lack of federal incentives must approve permits typically do not have
a fair basis for understanding the noise,
For small wind turbines, there has been no visual, and other impact of the turbines.
federal tax incentive or deployment They fear the worst and act accordingly.
program since 1985. The resulting lower Consumers who need approval from
level of business activity has affected zoning boards often run into objections
industry expenditures on research and presented by concerned neighbors.
development and has slowed the pace of Dealing with these objections can demand
innovation. DOE has supported sporadic considerable time and expense.
initiatives for research and development
on small wind turbines since 1985. Excessive interconnection require-
However, this level of investment by the ments and unequal billing policies
federal government has not been sufficient
to realize the potential for cost reductions Even though the federal Public Utility
or leveraged deployment. Regulatory Policies Act (PURPA section
210), gives all Americans the right to inter-
Restrictive zoning connect small wind turbines and to receive
payment for excess electricity production,
Most local jurisdictions limit the height of the policies of many utilities discourage
structures in residential and sometimes the use of these systems. Many utilities
other zones to 35 feet. This restriction was have limited experience with customer-
developed nearly 100 years ago to ensure owned generation. They may use the same
that the height of structures would not process for approving 500-MW gas
exceed the capability of fire fighting turbine co-generation facilities and 10-kW
equipment to pump water. Today, this residential wind installations.
height limit is a significant obstacle to
siting small wind turbines. It sometimes takes more hours of labor by
the customer and the wind turbine vendor
To make effective use of the wind, small to gain the approval for interconnection
turbine towers must be at least 60 feet than it took to build and install the wind
high and well above obstacles (such as turbine itself. Weak or uninterested public
trees) in their vicinity. Wind speed increas- utility commissions can allow utilities to
es with height above the ground. effectively thwart the federal rights provid-
Turbulence, the disruption of the wind flow ed under PURPA. Interconnection standards
around obstacles, increases near the that have emerged in the last five years
ground and reduces energy output of small have required small wind turbines to
wind turbines. deliver to the utility grid power that is of
higher quality than the power delivered by
Putting a small wind turbine on a short the utility to its customers. Meeting these
tower is like putting a solar panel in the excessive standards increases the cost of
shade. For many residential applications, the wind generating systems.
systems of 5 to 15 kW, turbines need to
be on towers from 80 to 120 feet tall. The In more than 35 states, there is a policy
35-foot height restriction causes unneces- called net metering, in which consumers
sary expense and delay when getting a receive the retail rate for electricity they
building permit and opens up opportuni- generate in excess of their consumption.
ties for neighbors to oppose the permit But even under net metering, there is a
because of either legitimate concerns or great variation from state to state and
underlying historical animosities. utility to utility concerning the accounting
periods, capacity limits, limits to participa-
NIMBY and environmental concerns tion, and cost/benefit of net excess gener-
ation. This creates uncertainty in the mar-
Because there are few installations of small ketplace.
wind turbines, the neighbors of people
22
 THE BARRIERS IDENTIFIED

Undervaluation of green energy because the wind is such a variable envi-

ronment for a piece of machinery. How a
No economic credit is given for having a turbine withstands the long-term effects of
nonpolluting energy source. For every the wind is often known only after
kWh produced by a small wind turbine, several years of operation at dozens of
102 pounds of carbon dioxide, 0.57 sites. There needs to be a way to effec-
pounds of sulfur dioxide, and 0.34 pounds tively duplicate the wear and tear of the
of nitrogen oxide emissions are avoided. real world during the product develop-
ment stage. This will require the develop-
Disincentives in tax code ment and verification of accelerated
testing protocols for reliability, durability,
Companies that buy fuel or electricity can and longevity.
deduct these costs as business expenses,
reducing their reported profits and their Need for better technology tools
tax liability. Companies investing in
energy-producing equipment, on the other Many small turbines use a passive over-
hand, must capitalize the investment, speed control such as furling. In furling, the
increasing reported profits and tax liabili- force of the wind turns the rotor sideways,
ties. The accelerated depreciation sched- just as farm water-pumping windmills have
ule for wind energy investments helps, but done for 100 years. So far, no computer
does not level the playing field. codes have ben able to predict the perform-
ance or assist in the design of furling mecha-
Mid-Term (4–10 Years) nisms. This means such designs need to be
Technology Barriers performed empirically, raising development
costs. Better computer codes are needed to
Turbine productivity hampered by help reduce design costs.
power electronics issues
Mid-Term Market Barriers
Because small turbines operating at vari-
able speed produce variable frequency Insufficient capitalization
and variable voltage output, power elec-
tronic converters are used to modify the U.S. small turbine manufacturers are entre-
wild AC into standard 60-cycle AC. The preneurs who have a deep dedication to
old inverter technology was too unreli- renewables, but who also have limited
able. The new inverter technology is too resources. Their businesses lack the capital-
expensive. The industry needs lower ization to effectively promote mass markets,
cost, reliable power electronics. exploit design-to-cost technology options, or
provide forward pricing to accelerate
Domestic market requirement—quiet market adoption. They struggle in a capital
operation intensive business that requires substantial
investments in technology and overcoming
High-growth domestic markets demand institutional barriers. While the solar industry
quieter wind turbines, especially when has consumed billions in investment over the
turbines are sited in residential neighbor- last two decades, the small wind turbine
hoods. Turbine noise can be caused by industry has attracted far less capital.
gearboxes, blade shape, tower shadow,
etc. Small turbines operate at high RPM Complicated financial impact
and tend to spin even if they are furled
(pointed out of the wind); there needs to For consumers, purchases like small wind
be a way to make them extremely quiet turbines that have longer lifetimes are more
under all conditions. difficult to understand financially. Consumers
generally look at monthly cash flow or direct
Long-term reliability out-of-pocket expenses and rarely consider
life-cycle costs. They also do not tend to con-
As mentioned above, reliability is a long- sider tax consequences fully. This makes it
term issue that is difficult to predict
23
 THE BARRIERS IDENTIFIED

difficult for them to compare small wind tur- Need for sustained national incentives
bines with other potential investments.
As mentioned above, the lack of federal
Lack of multilateral bank funding for incentives slows the pace of industry growth
export markets to meet the market demand. Other tradition-
al energy source technologies are being
The World Bank and Global Environmental subsidized, and as noted above, federal tax
Facility have been funding substantially policies actually encourage the use of fossil
more solar projects than small wind projects, fuel and utility power.
even though the cost of electricity from small
wind turbines is lower than from solar elec- Need for national models for net
tric products. [2] There is a need for the metering and zoning rules
small wind industry and its partners to
provide in-house technology expertise to the There are too many state, county, and city
World Bank, which has proven to be suc- jurisdictions for the wind industry to address
cessful for the solar industry. the policy needs of each. For example, in
California there are 538 counties and incor-
Mid-Term Policy Barriers porated cities. A 2001 industry study esti-
mated that addressing the zoning barriers
Need for more state-based incentives with new ordinances in each jurisdiction
would cost more than $20 million and
Currently, four states (California, Illinois, would require more than 200 person-years
New Jersey, and Rhode Island) offer sub- of effort. This finding led to a state zoning
stantial rebate or buy-down programs to bill, AB1207. National regulations, like
promote the installation of renewable energy those passed for satellite TV, would be very
equipment. Rebates typically range from 50 helpful to the industry.
to 60% of the installed small wind system
cost, resulting in significant savings. Other Lack of interconnection standards
states, such as Wisconsin, offer production-
based incentives. (See the appendix for a Few states have standardized interconnec-
full listing of state incentives in 2002.) If tion requirements, and many public utility
more states offered incentives, the sales and commissions give utilities broad discretion
production volume for small wind turbines on policies towards customer-owned genera-
would increase. tion. Some utilities have used this freedom to
discourage competition through excessive
requirements for equipment, special tests,
and additional insurance.There is a need for
a national interconnection standard devel-
oped by a technically recognized body.

24
 ACTION PLAN

This roadmap of the U.S. small wind • Develop advanced airfoils suitable for
turbine industry identifies the background, small wind turbines.
status, and potential of the market for small • Develop advanced permanent magnet
wind turbines. The roadmap points to tech- alternator and other generator technolo-
nology, market, and policy goals and the gy suitable for small wind turbines.
specific actions necessary to meet these
goals. Many groups will need to partici- Reduced tower and installation costs
pate in the activities described here in
order to realize our vision of U.S. small Actions
wind turbines as a significant contributor to • Develop advanced, lower-cost foundation
America’s energy supply portfolio. or anchoring systems for towers.
• Develop automated processes for tower
These high-priority goals have been identi- fabrication.
fied by the AWEA Small Wind Turbine • Develop alternate, lower-cost tower
Committee to overcome the barriers identi- designs.
fied in the previous section. Under each
goal are listed specific actions that can be Improved turbine reliability
taken by the industry working in concert
with federal, state, and local governments Actions
to meet these goals. Progress on these • Develop test methods for reliability issues
items in the near-term, mid-term, and long- like "extreme events."
term timeframes will help make the vision • Gather multi-year data on turbine per-
of this roadmap a reality. formance, reliability, operation, and
maintenance.
• Develop structural safety standards for
Near-Term (0–3 Years)
the small turbine industry.
Technology Goals and
Actions Increased participation of small wind
turbines as a technology option in
Reduced cost of energy resulting from domestic government programs
turbines that operate in low-wind
regimes Actions
• Work with the Federal Energy
Actions Management Program to develop small
• Develop U.S. technology for low-cost, wind projects at federal facilities.
robust rotors optimized for low wind • Promote small wind turbines for home-
speed regimes. land security and other military opera-
• Develop low-cost, very tall towers. tions.

Turbine cost reduction through Reduced manufacturing costs by

improvement of the performance and increasing the volume of production
efficiency of small wind
turbines Actions
• Engage manufacturing consultants to
Actions advise individual manufacturers on
• Support cost-shared component develop- improved manufacturing techniques,
ment projects.8 improved throughput time, and develop-
• Conduct applied research projects aimed ment of a manufacturing plan.
at improving the efficiency of small wind • Encourage small turbine manufacturers to
turbines through better integration of sub- explore state incentives for building man-
systems.9 ufacturing businesses.

8
In-house research projects are supported by the government through competitive, cost-shared procurement
that may include cost sharing by the companies involved.
9
Universities, research institutes, and companies work together on applied research projects.
25
 ACTION PLAN

Development of equipment and • Develop a Web-based performance pre-

processes for mass production of small diction capability based on high-defini-
wind turbine systems tion wind maps.
• Develop improved guidelines for microsit-
Actions ing considerations for small wind tur-
• Support company-specific in-house activi- bines.
ties to improve manufacturing processes.
• Support development of components Improvement in the reliability and
designed specifically for mass durability of small wind turbines
production.
Actions
Mid-Term (4–10 Years) • Develop improved life-cycle testing proto-
cols and analytical methods for small
Technology Goals and wind turbines.
Actions • Develop better understanding of design
load characterization for enhanced relia-
Development of improved bility, durability, and longevity.
power electronics10 • Identify design elements necessary to
achieve 50-year operating life.
Actions • Perform durability and reliability testing
• Support cost-shared company research for environmental extremes.
on power electronics equipment. • Support company-specific, in-house relia-
• Conduct applied research on generic bility enhancement projects.
power electronics issues.
Reduced maintenance requirements of
small wind turbines
Reduction of noise produced by small
wind turbines Actions
• Support company-specific, in-house proj-
Actions ects to reduce maintenance requirements.
• Develop a noise measurement and • Conduct applied research on generic
reporting standard for small wind tur- maintenance issues through hardware
bines (different from the IEC 61400-11 verification projects.
addition to the noise test standard).
• Conduct cost-shared, company-specific, Enhanced analytical tools for small
in-house noise reduction projects. wind turbine design
• Conduct applied research on generic
noise issues of small wind turbines. Action
• Enhance design techniques and capabili-
Creation of higher-definition perform- ties, particularly rotor aerodynamics and
ance predictions based on resource to dynamics that are unique to small wind
help customers in site selection11 turbines.

Actions Improved understanding of passive

• Initiate research to better understand the control of small wind turbines
higher turbulence and shear environ-
ments in which small wind turbines Action
operate. • Conduct applied research on generic
• Develop an improved performance pre- passive control issues for small wind tur-
diction methodology for small wind bines.
turbines.

10
Such as for conversion, optimization of wind turbine generator operation, storage, etc.
11
Now that wind maps have better resolution (down to 400 m2) we should be able to weed out sites that will
result in poor performance and give realistic assessments of performance for small wind turbines.

26
 ACTION PLAN

Development of a consumer-friendly
Long-Term (11+ Years)
performance rating system
Technology Goals and
Actions Actions
• Update and reconcile the AWEA per-
Develop hydrogen-based systems formance standard with the IEC 61400-
12 for small wind turbines.
Action • Promote adoption of the AWEA estimat-
• Establish link with other hybrid power ed annual energy output
technologies such as micro gas turbines, parameter.
PV panels, diesel and other fuel genera-
tors, and any new power generating Increased visibility and credibility of
technologies that may develop. small wind turbines

Establish links with storage and other Actions

power technologies • Encourage DOE to give small wind
greater visibility through policy incen-
Action tives, studies, and speeches.
• Establish links with storage and other • Publish in cornerstone magazines such as
power technologies such as hydrogen Scientific American and Popular Science
generation and storage, batteries, to highlight small wind as an important
natural gas sequestration, and any new technology.
storage technologies that might develop. • Publicize the new generation of products
coming out of government-supported
development contracts.
Near-Term (0–3 Years)
• Increase outreach to state energy offices
Market Goals and Actions and other important local and regional
stakeholders.
Development of additional efficient • Create a significant federal deployment
and effective standards initiative for small wind turbines to prime
important markets.
Actions
• Create U.S. and international IEC stan- Completion of high-definition wind
dards to address reliability, durability, mapping for all states and for interna-
longevity, noise, and power perform- tional markets
ance.
• Complete the IEC 61400-2 draft safety Actions
standard. • Complete high-definition wind maps for
• Complete development of a cost-effective each of the 14 states targeted by the
and efficient certification program for AWEA Small Wind Turbine Committee as
small wind turbines. offering the best opportunities for small
turbine installations. (Measurements
Development of stronger, certified dis- taken at 24 meters [80 feet] above the
tribution channels and support ground.)
• Complete high-definition wind maps for
Actions the next 16 states on the AWEA Small
• Develop generic installation and mainte- Wind Turbine Committee’s pri-ority list.
nance training programs for small wind • Modify existing international wind
turbines. resource maps for small turbine charac-
• Pursue technologies of communication teristics such as height, class descriptors,
with distributed generation installations and approximate kilowatt-hours of pro-
(remote monitoring). duction.
• Develop certification program for • Develop an improved performance pre-
installers. diction methodology for small wind
turbines.

27
 ACTION PLAN

• Develop a Web-based performance pre- • Increase programmatic involvement for

diction capability based on high-defini- small wind turbines in the National Wind
tion wind resource maps. Coordinating Council, the National
Association of State Energy Officials, the
Utility Wind Interest Group, the National
Mid-Term (4–10 Years)
Council of State Legislators, and others.
Market Goals and Actions
Increased participation of small wind
Improved definition of the market to as a technology option in international
be used for business planning development projects

Actions Actions
• Update the 1981 A.D. Little market study • Support the establishment of in-house
for small wind turbines in the United technology expertise in small wind at
States. U.S. AID, the World Bank, U.N.
• Characterize the export potential of U.S. Development Program, and other multilat-
technology. eral development programs.
• Develop effective response to foreign
Increased customer options for tied-aid competition.
purchase and financing of small • Promote easier and more effective export
wind turbines finance programs.
• Educate Congress and the public on the
Actions importance of spending on foreign aid
• Expand availability of plug-and-play assistance.
systems suitable for mass marketing. • Encourage World Bank to make renew-
• Establish consumer-friendly customer able purchase decisions based on least
financing programs, like those available cost instead of defaulting to PV.
for car buyers.

Increased number of products avail- Long-Term (11+ Years)

able (models and size range) for Market Goals and Actions
different market segments
Stimulate the micro-power revolution
Actions
• Support company in-house product devel- Action
opment projects. • Develop a strategy with outreach materi-
• Encourage state support for small wind als to address the micro-power market.
turbine product development.
• Encourage greater investment in the
Near-Term (0–3 Years)
small wind turbine industry.
Policy Goals and Actions
Incorporation of environmental bene-
fits into the value of wind turbines Supportive national policies to
promote market development
Action
• Support development of effective green Action
tags market for distributed generations. • Create supportive national policies (tax
credits, regulations).
Increased outreach and education on
small wind turbines Supportive state policies to promote
market development
Actions
• Develop state-specific consumer guides Actions
for small wind turbines. • Promote creation of state incentive pro-
• Develop a guide on wind power for grams that reduce first costs (e.g.-
school programs. rebates).
28
 ACTION PLAN

• Promote creation of state incentives that • Promote protection against unwarranted

stimulate electricity production (e.g., set insurance requirements.
up incentives that increase with tower • Provide expert testimony at rate
height.)12 hearings.
Credit for green attributes
Removal of systemic height restrictions
normally found in residential locations Action
• Discuss the environmental benefits of
Actions small wind, including the green
• Provide information encouraging elimina- attributes.
tion of height restrictions to local govern-
ments and bodies making such regula- Reduction or elimination of
tions. disincentives to investment in
• Circulate model regulation regarding per- small wind turbines
missive zoning for small wind turbines.
• Promote state and national legislation Action
that can override local restrictions. • Address disincentives to investment in
small wind turbines (tax code, sales
More information to taxes, property taxes, etc).
address aesthetic, noise, and
environmental concerns
Mid-Term (4–10 Years)
Actions Policy Goals and Actions
• Create a credible white paper on avian
issues for small wind turbines. Support state policies for small wind
• Develop technology to reduce noise. incentives
• Develop building permit reference materi-
als relating to aesthetics, noise, environ- Action
mental impacts, property values, etc. • Continue to work with states to develop
• Develop videos to highlight the visual new policies
non-intrusiveness of small wind turbines.
• Develop a voluntary contribution Disseminate information on market
program to remove obsolete and barriers
orphaned wind turbines.
Action
Removal of interconnection barriers • Streamline information on zoning regula-
tions, interconnection agreements, and
Actions net metering to guide development of
• Provide information to utilities and public state incentives.
utility commissions that will help remove • Develop streamlined interconnection
unnecessary and expensive requirements requirements
in the areas of power quality, safety, and
performance Long-Term (11+ Years)
standards.
Policy Goals and Actions
• Participate in development of a national
interconnection standard. Develop strategies to deliver high-level
electric service to rural customers
Equitable utility billing and intercon-
nection cost policies Action
• Work with rural electric cooperatives
Actions to devise incentives for rural customers
• Promote net metering. and to streamline the interconnection
• Promote simplified interconnection process.
contracts.

12
Action suggested by M. Sagrillo.
29
 THE STRATEGY

All emerging industries and products have benefit charges assessed to retail electricity
faced this basic "chicken and egg" sales. Funds generated by these system
“Many more people
dilemma. Some never made it over the benefit charges can be designated by legis-
would buy small wind hump and eventually faded from the market- latures to subsidize renewable energy proj-
systems if they were place. Some got over the hump by virtue of ects and promote industry development.
massive corporate investment (in R&D and
cheaper. But, we can’t
forward pricing), and others made it into In 2002, four states offered these rebate
make them cheaper the mainstream by steadily improving cost incentives for small wind turbines:
unless many more and functionality. The small wind industry is California, Illinois, Rhode Island, and New
people buy them.” composed of innovative, small, struggling Jersey. The requirements for specific turbines
firms that lack the resources to develop are determined on a state-by-state basis,
mass-production designs and build large and typically these incentives are only for
David Blittersdorf, factories in anticipation of quantum increas- small turbines that are connected to the
President, AWEA. es in sales. Steady improvement is the most grid. Other states offer tax credits, sales or
likely route for firms offering small wind tur- property tax incentives, and net metering
bines. In Washington, this is sometimes for small turbine owners.
referred to as sustained orderly develop-
ment. The various stimulus packages are shown in
the map of state incentives presented in
Sustained orderly development is the recog- Figure 3. As the number of states offering
nition that there are not likely to be "silver stimulus packages for small turbines in-
bullets" that will radically transform the creases, there will be further sustained
glide slope of market penetration for small orderly development of the market.
wind turbines. Steady improvements in the
products and sustained public sector In order to meet the market goals of the
support offer the best hope of delivering the AWEA Small Wind Turbine Committee,
industry’s vision of a "new home appli- more incentives are needed. An additional
ance" and making small wind turbines a two or three states per year need to imple-
notable contributor to our national energy ment stimulus programs for small wind tur-
supply. Although economics are a barrier, bines over the next six to ten years. It is
the exciting thing about residential and also critically important that the federal gov-
small business markets is that once the ernment does its share with a significant
numbers work for one home, they work for (25 to 40%) tax credit or rebate program.
10,000 homes. This gives the small wind
turbine industry explosive growth potential. Research, Development,
and Demonstration
Public Policy Federal, and to a lesser extent, state R&D
A primary element of sustained orderly programs need to provide greater resources
development for small wind turbine technol- for small wind turbine technology develop-
ogy is related to public policy. Smart subsi- ment, and the industry must continue to
dies, which enable customers to tunnel devote significant resources to product
through the cost barriers, are critically development. The DOE research program
important in aggregating demand. Federal on wind energy cannot be effective if it con-
and state subsidies and incentives need to centrates solely on long-range, high-risk
dovetail for a total package that provides R&D. Instead, the federal R&D program
enough stimulus to move the market. must support development of advanced
Removing institutional market barriers, such products and components and attack other
as tower height restrictions and undue inter- cost drivers such as technology for manufac-
connection costs, is also an important part turing and installation, outreach for con-
of the recipe. sumer education, support for policy and
market transformation, and work on generic
In addition to efforts by the U.S. govern- basic technology.
ment, some states have good policy envi-
ronments for small wind turbines. Many of DOE now has a wind energy R&D budget
these states offer rebate or buy-down pro- of about $40 million, of which about $3
grams that are typically funded with system million, or 8%, is spent on programs to
30
 THE STRATEGY

develop small wind turbines. As technology market demand. DOE, national laborato-
for large wind turbines "graduates" and ries, test centers, and universities will work
requires less public sector support for the with industry partners to conduct basic and
next few years, spending on small wind applied research, development, and testing
technology should significantly increase. to improve small wind technology.
Organizations representing utilities, stan-
Small Wind Turbine Industry dards-making bodies, regulatory agencies,
The small turbine industry must be open to and every level of government will partici-
new entrants and should not foreclose any pate in market and policy actions to
investment options. Private capital will remove barriers. Consumers will express
remain the cornerstone of the substantial their will by seeking out this environmental-
investments that will be necessary if this is ly friendly technology in spite of the barri-
to become a billion-dollar industry. ers that still exist.
Likewise, the industry should pursue all
viable market diffusion models, from full- To address policy barriers, industry and
service dealerships to "big box" chain government entities work together to
stores to "Dell-like" direct sales programs. propose, review, advocate, and help imple-
ment policies that support development of
Cooperative Strategy small wind technology while safeguarding
The members of the industry will continue
to develop products and processes to meet

The market for small wind turbines in the United States is also affected by the activi-
ties of the Wind Powering America (WPA) Program. This DOE activity works to
educate the general public on wind energy and its uses. The general public has
specifically requested information on small wind turbines at various state workshops
being organized under WPA. This grassroots level of interest stems from many
sources, such as the desire for independence from the utility grid, the urge to reap
the environmental benefits of renewable energy, the desire to make a public state-
ment about the environment in a visual way by using small wind turbines, and the
desire to use a renewable technology that is cost competitive over the life of the
small wind turbine. Further, the agricultural community has historically used wind
energy and may be more comfortable with small wind turbines.

Under the WPA activities, members of the AWEA Small Wind Turbine Committee
were asked to rank the states from high to low priority for focused WPA small turbine
activities. Not only were the states ranked, but the specific state activities were rated
as well. These activities include the development of state-specific guides for con-
sumers on small wind electric systems; distribution of Clean Power Estimator—an eco-
nomic tool to help residential consumers and small business owners understand the
economics of a small turbine system; and the development of better wind resource
assessment maps.

The top 14 states designated by the AWEA Small Wind Turbine Committee have
been targeted for the state-specific activities listed above. The targeted states are
California, New Jersey, New York, Illinois, Pennsylvania, Minnesota, Washington,
Oregon, Vermont, Colorado, Massachusetts, Idaho, Arizona, and Rhode Island.
These states also receive high priority for workshops on small turbine tech-
nology under the WPA outreach and market development activities, in hope of stimu-
lating the domestic market.

Further, Wind Powering America small turbine activities will be determined in con-
junction with the AWEA Small Wind Turbine Committee.

31
 THE STRATEGY

the public interest. The industry also The following tables summarize wide-
lobbies at the national, state, and local ranging discussions of the AWEA Small
level for policies that remove barriers and Wind Turbine Committee about the timing
compensate for subsidies to other energy of actions to overcome barriers and reach
technologies. the goals described in this roadmap.

Table 2: Summary Schedule of Actions (First appeared in Executive Summary)

Technology Actions Market Actions Policy Actions

Near-Term - Reduce costs by new turbine - Develop nationally recognized - Develop a strategy to work with
(0-3 years) development activity for low wind standards for participation in stimu- state policies for inclusion of small
speed sites and new component lus programs wind
development for SWT - Publish SWT articles in corner- - Develop a national policy for an
- Research reliability concerns such stone magazines such as Scientific SWT tax credit
as lightning, corrosion, bearing American, to create more "SWT - Work to eliminate zoning
lubrication, alternator winding insu- buzz" restrictions
lation, electronics - Revise new U.S. wind maps for - Develop model zoning ordinances
- Continue focused long-term SWT, 30 m hub height and .25 and blueprint templates of zoning
research unique to SWT - furling, shear, new legends regulations, interconnection agree-
durability, blade aerodynamics, - Explain turbine micrositing ments, and other policies
noise, and power electronics - Provide information to remove mis- - Work to reduce excessive
- Develop packages with other dis- conceptions about the wind interconnection requirements
tributed generation and storage resource
technologies - Incorporate the value of environ-
mental attributes of small wind into
electricity prices

Mid-Term - Work to improve the reliability and - Update national market study - Influence/develop new state and
(4-10 years) reduce the cost of power - Characterize the export potential for national incentives
electronics U.S. manufacturers and work with - Disseminate and expand informa-
multilateral development tion on zoning regulations, intercon-
- Work to eliminate noise from small programs
turbine designs nection agreements, and net meter-
- Establish consumer-friendly cus-
- Develop consumer-friendly tomer financing programs, including ing rules
performance predictions lease options - Develop a more consumer-friendly
- Improve analytical design tools - Increase the number of products national interconnection standard
- Continue the development of pack- available (models and size range)
ages with other distributed genera- for different market segments
tion and storage - Increase outreach and education
technologies

Long-Term - Develop hydrogen-based systems - Stimulate the emerging micro-power - Develop policies to help deliver
(11 + Years) - Develop blackout protection revolution, of which SWTs are part higher service levels to rural cus-
strategies tomers
- Establish links with storage and
other power technologies

Crosscutting - Continually work to reduce cost - Continue to develop standards for - Continue to develop standards for
(Ongoing) and improve reliability reliability, durability, and longevity reliability, durability, and longevity
- Continue to develop standards for
reliability, durability, and longevity

32
 THE STRATEGY

Table 7: Research Priorities Identified

Research Area Continuing Research Future Research

Reduce cost - Low-cost robust rotors with advanced airfoils - Larger small turbine development (50–100 kW)
- Low-cost, very tall towers - Improve performance and efficiency
- Turbine optimized for low wind speed

Reduce manufacturing costs - Develop tailored, efficient manufacturing plans - Recyclability

- Equipment and processes for mass production - Coating equipment

Improve reliability - Develop improved turbine standards - Design test methodology for “extreme events”
- Gather multi-year turbine data
- Research topics w/reliability impact

Power electronics - Reduce cost and improve reliability of power - Develop power electronics design for integrating power
electronics and storage technologies and improving overall system
- Develop optimized converter technology energy efficiencies

Reduction of noise - Understand aeroacoustic phenomena - Design strategies to reduce noise

- Noise measurement standard

Better analytical tools - Wind/economic prediction - Integrated design tool

- Aeroelastic models with furling

Improve overspeed control knowledge - Expand analytical tools to handle furling, stall/furling - Develop design tool based on improved aerodynamic
data

Distributed generation applications - Control strategies to combine power and storage - Real-time optimization for electricity, heat, and second-
sources ary uses
- Control strategies to combine power and heat appli-
cations

33
 ENDNOTES

1. Bergey, Mike, "The Sleeping Giant: 3. Energy Information Agency, Annual

The Role of Small Wind in America’s Energy Review 1998. Government
Energy Future,"in Proceedings of Printing Office: Washington, D.C.,
Windpower 2001. American Wind DOE/EIA-0384(98), 1998.
Energy Association: Washington, 4. U.S. Census Bureau, American
D.C., June 7, 2001. Housing Survey, Owner-occupied,
2. Arthur D. Little, Inc., Near-Term High- 1991-1997. Government Printing
Potential Counties for SWECS. Solar Office: Washington, D.C., 1998.
Energy Research Institute: Golden,
CO, BE-9-8282, 1981.

34
NOTES

35
 NOTES

36
 APPENDIX-DETAILED LIST OF STATE INCENTIVES 1

% - rural
STATE

Incentives Specifically Type and Amount of Length of land/tota

Incentives Net Metering
for Small Wind Funding Program l land
area
Power Project Revolving Loan term N/A 96
ALASKA

Loan Fund State Loan related to

Program: interest rate tied the life of
to municipal bonds. project.
Personal tax credit 25% of the cost of a renew- 97
able system, up to $1,000,
may be carried forward up to
five years
Sales tax exemption for
Up to a $5,000 deduction.
ARIZONA

equipment
Tucson Electric Power:
wind < or equal to 100 kw
NEG based on fixed sea-
sonal rates Arizona Public
Service: wind < or equal
to 10 kw NEG based on
avoided cost

Small wind: agricultural or 96

commercial: < or equal to
ARKANSAS

100 kW, residential: < or

equal to 25 kW Arkansas
Public Service
Commission to establish
rates, terms and
conditions

Max capacity of 1 MW; 93

annualized calculation;
credit for NEG is based
on either baseline/over-
baselines rates, or on
time of use rates, and is
carried over month to
month; any NEG at the
end of annual period is
credited to the utility
without compensation to
the customer-generator.

Energy Innovations Small $2 to $2.5 million per year; Expires

Grant (EISG) Program. $75,000 per project. September
CALIFORNIA

"Intended to determine the 2002.

feasibility of energy tech-
nology and science innova-
tions for new energy con-
cepts whose feasibility are
not yet established."

Public Interest Energy $62.5 million/year Expires in

Research Grants (PIER). 2012
Funds R&D efforts not ade-
quately funded by competi-
tive and regulated markets.

Public Benefits Fund: $70.2 million for existing wind Expires in

Renewable Energy Trust projects ($/kWh credit); $162 2012
Fund million for new renewable
projects, which must be
installed by the end of 2001
($/kWh); $54 million for
emerging technologies 10 kW
or less for wind (buydown).
2 STATE INCENTIVES

% - rural
STATE

Incentives Specifically Type and Amount of Length of

Incentives Net Metering land/total
for Small Wind Funding Program
land area

Max capacity: 10 kW;

COLORADO

NEG carried from month

to month, and granted to
the utility at the end of the
annual period. PSCo cus-
tomers only.

Public benefits fund. $118 million over five Enacted in 11.6% (3.1
Must be a direct econom- years-- renewable energy April 1998 total) 3,282k
ic benefit to the state of investment fund
Connecticut. Available in
the form of grants, direct
or equity investments,
contracts or other actions
CONNECTICUT

which support research,

development, manufac-
ture, commercialization,
deployment and installa-
tion of renewable energy
technologies.
Net metering rules, regu-
lations, and conditions to
be decided by the
Department of Public
Utility Control.
40% income tax reduc-
tionin the year of installa-
tion, and 20% each year
for the next 3 years.
Maximum deduction of
$5,000 in any one year.
"Low Interest Loans for
Renewable Energy
Resource Program: resi-
dential loans from $1,000
to $10,000, and commer-
cial loans from $1,000 to
$100,000, both at a 4%
interest rate, to be repaid
IDAHO

in 5 years or less.
Several restrictions can
be viewed at:
http://www.idwr.state.id.us
/energy/Financial/
loanr.htm

Only customers of Idaho

Power Company
(although all utility compa-
nies have the opportunity
to pass a net metering
tariff because of a PUC
order); all technologies
under 100 kW
eligible.
 STATE INCENTIVES 3

% - rural
STATE

Incentives Specifically Type and Amount of Length of

Incentives Net Metering land/total
for Small Wind Funding Program
land area

Small wind < or equal to 40 91

kW NEG avoided cost
Commonwealth Edison only
Property tax exemption
Maybe $ in ComEd settlement
fund
Special property tax
assessment.

Alternative Energy Bond

Fund Program: not
applicable to residential
projects.

Renewable Energy Rebates available for

Resources Program small systems; grants
ILLINOIS

Grants available for large.

Public benefits program: Expected to produce 10 year

Renewable
Property Energy
tax exemption. $100 million/year
Amount varies. for program, to
Resources Trust
Municipalities Fund.
are given the ten year length, end in 2007
Grants,
the loans, to
opportunity and other
adopt 50% of which goes to
incentives
the available.
exemption by the the Renewable Energy
state. portion of the fund.

Public benefits program: $200 to $225 million

Clean Energy for efficiency and
Community Trust renewables.
(CECT). Grants, loans,
venture capital support,
and other financial
incentives available.
Must demonstrate
benefit to Illinois envi-
ronment or economy.

Opportunity for local 97

government to assess
wind turbines at a
special valuation for
property tax purposes.
Sales tax exemption Wind energy equip-
ment and all materials
used to manufacture,
install, or construct
wind energy systems
IOWA

100% exempt.

Alternative Energy Loan Small wind (< 10 kW), is Depends. In 1996,

Program. 0% interest eligible for 10% of the $1.8 million per year
loans for up to half of available funds, while big was allocated for the
the project cost up to a wind (> 10 kW) is eligible years 1997-1999.
maximum of $250,000. for 20% of the funds.

Net metering law in dispute;

however, currently NEG pur-
chased at avoided cost. Other
details unknown.
4 STATE INCENTIVES

% - rural
STATE

Incentives Specifically for Type and Amount of Length of

Incentives Net Metering land/total
Small Wind Funding Program
land area

Renewable Energy Grant About $400,000-- 98

Program $500,000 per year.
Typical award from
$10,000--$50,000; max
KANSAS

limit of award: $50,000.

Property tax exemption
Net metering law under con-
sideration: Senate Bill 299,
introduced in February 2001;
not yet signed into law.
None None None 87
LA

Renewable Energy Trust Will focus on large wind $150 million over a five 58
Fund. farms. Plans to put $ on year period; approximate-
resource assessment ly $20 million per year for
DG - "Still, limited aware- an undefined period
ness among potential con- beyond 2002.
sumers, lack of technical
and financial information,
and problems providing
financing to consumers
hamper wide scale com-
mercialization...."
Alternative Energy Patent Allows income tax deduc-
Development: Corporate and tions for any income
personal. received from the sale of
or royalty income from a
patent that is deemed
beneficial for energy con-
servation or alternative
energy development.
May be used for 5 years
after it is granted.

QFs < or equal to 60 kW

MASSACHUSETTS

Monthly NEG avoided cost

All utilities
State sales tax exemption. 100% exemption from Enacted
Applicable to residential the sales tax on a wind in 1977
systems only. system and all related
equipment.
State income tax credit. 15% credit against the
state income tax for the
cost of a renewable
energy system (including
installation) installed on
an individual’s primary
residence. Max limit of
$1,000; can be carried
over from first year.
Property tax exemption. 100% exemption. Allowable
for a
period of
20 years
after
installa-
tion.
Solar and Wind System Exemption from the cor-
Deduction. Includes costs porate excise tax for the
incurred from installing the length of their deprecia-
unit. Aplies only to commer- tion period.
cial and industrial projects.
 STATE INCENTIVES 5

% - rural
STATE

Incentives Specifically Type and Amount of Length of land/tota

Incentives Net Metering
for Small Wind Funding Program l land
area

Minnesota Agricultural Up to 45% of loan, up Enacted 92

Improvement Loan to $100,000 of loan in 1995
Program - specifically for principal for up to 10
small wind. years.
Value-Added Stock Loan Up to 45% of loan, up Enacted
Participation Program. to $24,000 of loan prin- in 1994
Interest rate subsidized by cipal for up to and up for
RFA, generally to about 8 years. renewal in
4%. 1997.
Unclear
whether it
was
renewed.
Wind and Photovoltaic Systems < 2 MW are Enacted
Systems Exemption. 100% exempt, while in 1992
Excludes value added to systems > 2 MW are
property value by a renew- 91% exempt.
able energy system from
property taxes.
MINNESOTA

Wind and Solar Equipment Expired?

Sales Tax Exemption.
Wind Energy Generation 1.5 cents/kWh paid for Enacted
Grants. Available on a first systems < 2 MW for in July
come, first serve basis until ten years (payments 1997,
new wind capacity can go past the 2005 expires
statewide totals 100 MW. expiration). January 1,
2005.
Establish- Max capacity of 40 kW
ed in 1983 Applies to IOUs, municipals,
and rural cooperatives NEG
purchased at average retail
rate (total annual class
revenue from sales of elec-
tricity minus the annual
revenue resulting from fixed
charges, divided by the
annual class kWh sales)
Ability to create wind ease- For the purpose of Enacted
ments (voluntary con- taxes,easements may in 1978
tracts), which protect decrease property value,
access to wind for a wind but not increase it.
energy system.
Low-Cost Efficiency Loan Loans are determined Enacted 95
Funds. Available only to on an individual project in 1991
MISSOURI

public schools (K-12) and basis, with fixed inter-

local governments. est rates below market
level.
6 STATE INCENTIVES

% - rural
STATE

Incentives Specifically Type and Amount of Length of

Incentives Net Metering land/total
for Small Wind Funding Program
land area

Commercial or Net 35% tax credit for manu- Enacted in 99

Metering System facturing plants producing May 2001.
Investment Credit -- alternative energy gener-
Alternative Energy ating equipment, a busi-
Systems. $5,000 ness facility with a renew-
minimum investment. able energy system, or
Excess after the first year alternative energy gener-
can be carried over for 7 ating
years. equipment.

Property tax exemption. Applies to systems with Exemption

Exempts value added by up to a $20,000 value for may be
renewable energy system a single-family dwelling; claimed
to property value from up to $100,000 value for for up to
property taxes. a multi-family residential 10 years
dwelling or a nonresiden- after
tial structure. installa-
tion.
MONTANA

Alternative Energy
Revolving Loan Account.
Applicable for residential
and commercial cus-
tomers for the purpose of
building alternative
energy systems to gener-
ate energy for their own
use and for net metering.

Ability to create wind Enacted in

easements, which protect 1983
access to wind for a wind
energy system.

Small wind < or equal to 50

kW Annual NEG credited to
following months, and at
the end of annual period is
granted to utility Applies to
all utilities
Low Interest Loan 99
Program for Energy
Efficiency. To secure a
loan, approach your own
financial institution, which
will then approve the
project on financial terms.
The Energy Office is then
contacted by the financial
NEBRASKA

institution, which then

buys half of the loan at
0% interest so that the
total interest on the loan
"from the borrower’s per-
spective" will be half the
market rate obtained
through their private
lending institution.
Creation of wind ease-
ments allowed.
 STATE INCENTIVES 7

% - rural
STATE

Incentives Specifically Type and Amount of Length of

Incentives Net Metering land/total
for Small Wind Funding Program
land area

Full sales tax exemption for Full exemption from Expired in 65

solar and wind energy 6% sales tax. 2000.
systems. New legis-
lation?
New Jersey Clean Energy Small Systems (<10kW), $358 million over the
Program: State rebate receive a $5/watt rebate, to next three years (2001-
program. Medium systems decrease over time as 2003), 25% of which
(>10-100kW) receive a more energy systems are will support class I
NEW JERSEY

$4/watt rebate; larger added. Rebates available renewables (the other

systems (>100 kW) receive up to 60% of system costs. 75% goes to energy
a $3/watt rebate. Systems efficiency).
producing more energy
than needed by the renew-
able energy system owner
are not eligible.

Max capacity: 100 kW

NEG credited to the fol-
lowing month and pur-
chased by the utility at the
end of the billing period at
avoided cost.

System benefits charge Up to $4 million avail- Enacted 58.9% (77.7

Public benefits fund: sup- able. in 2000 total) 1,740k
ports the use of renewable
energy for school districts,
cities, towns, villages, and
NEW MEXICO

counties.
Enacted Renewables < or equal to
in 1998 10 kW NEG carried
forward month to month,
or paid at avoided cost by
the utility Utility chooses
which method for credit.
All utilities

Property tax exemption Any value added by Applies

the renewable energy for all
system is subtracted years fol-
from total property lowing
value for tax reasons. installa-
tion.
NEVADA

10 kW or less. Limit of
100 customer-generators
for each IOU. Customer
can choose to have NEG
credited toward the next
month's bill. Utilities are
not required to pay
avoided cost for NEG.
8 STATE INCENTIVES

% - rural
STATE

Incentives Specifically Type and Amount of Length of

Incentives Net Metering land/total
for Small Wind Funding Program
land area

Renewables R&D Grant Annual funds average 85

Program. Provides funds around $2 million.
for projects focusing on Funds up to 50% of
product and technology project (generally pro-
development, rather than viding between
installation of renewable
energy systems. $10,000 and $200,000
per project).
New York Energy Interest rates reduced 5 year
$mart(SM) Loan. Any by 4.5%. term.
NEW YORK

commercial, industrial,
retail, agricultural, non-
profit, or multifamily facility
is eligible for this program.
Must be customer of one of
6 IOU's in NY.
Public Benefits Fund. $150 million annually. Expires
June 30,
2006.
High Value PV and Wind
solicitation $1.3M - spring
2000 (net metering law
not applicable to wind)

Income tax credit 3%/ year for five years 97

for the cost of equip-
ment and installation
(5% if installed before
January 1, 2001).
Large Wind Property Tax 70% reduction in prop- Constructi
Incentive (100 kW or erty taxes on must
larger). begin
before
January 1,
NORTH DAKOTA

2011.
Geothermal, Solar, and Five year
Wind Property Exemption period fol-
lowing
installa-
tion.
Large wind sales tax Construction must
exemption (100 kW or begin before January
larger). 1, 2011.
Up to 100 kW; no
statewide limit of net
metering capacity; NEG
must be purchased at
avoided cost.

95
IOU's and rural coopera-
tives under the
Commission's jurisdiction
OKLAHOMA

are required to file net

metering tariffs for cus-
tomer-generators. 100
kW or less. No state-wide
limit. Customers may
request that utilities pur-
chase NEG, but utilities
are not required to do so.
 STATE INCENTIVES 9

% - rural
STATE

Incentives Specifically Type and Amount of Length of

Incentives Net Metering land/total
for Small Wind Funding Program
land area

Property tax exemption. 100% exemption. Expires in 98

Added value of renew- 2012
able energy system shall
not be included when
evaluating the property
for tax purposes.
Business Energy Tax 35% tax credit over 5 Enacted in
Credit ("Betsy"). Must years 1980
replace at least 10
percent of the electricity,
gas or oil used; max. limit
of $10,000,000 per
project. Only applies to
businesses!
OREGON

Residential Energy Tax 60 cents credit/ estimat- Enacted in

Credit. Equipment, ed kWh to be produced, 1978
installation, and intercon- up to $1,500 in the first
nection costs are year .
applicable.

Small Scale Energy Loan Amount varies. Enacted in

Program (SELP). Energy 1981
savings must be able to
pay majority/all of loan;
applies to
commercial/industrial and
municipal/schools proj-
ects.

Public Benefits Fund. $8.7 million/year

Small wind < or equal to

25 kW Annual NEG carried
month to month or credited
at avoided cost At end of
annual period, NEG
granted to utility for use in
low income program
Applies to all utilities

Municipal and local

authorities may establish
wind access laws.
Public Benefits Fund. Varies according to 90
Created for the purpose utility.
of promoting the develop-
ment and use of renew-
able energy
PENNSYLVANIA

Low-income renewable Provide renewable

energy pilot programs energy system to
decrease electricity
costs.

10 kW or less. NEG cred-

ited at the end of each
month to utility.
10 STATE INCENTIVES

% - rural
STATE

Incentives Specifically Type and Amount of Length of

Incentives Net Metering land/total
for Small Wind Funding Program
land area

Public benefits fund. Approximately $3 million Program

over 5 years? reviewed
in August 43
2001.
Personal Tax Credit. Beginning with 25% in 2000-
Based on maximum 2000, but declining by 2004
system cost of $15,000. 5% every year until
2004.
Property tax exemption. Expires
Renewable energy 12/2004
systems cannot be
RHODE ISLAND

assessed at more than the

value of a conventional
heating, hot water, or other
energy production system.

Sales tax credit. Refund of any tax paid. Expires

12/2004
PUC order of 1988; requires
IOU's to provide net meter-
ing contracts; max of 25 kW
or less; NEG at end of
month credited to following
month; NEG at end of
annual period credited to
IOU.

Property tax exemption. Exempts entire 98

SOUTH DAKOTA

May be taken for 3 years assessed value of resi-

after installation; is not dential systems from
applicable to energy property tax, and 50%
systems that produce installed cost of com-
energy for resale. mercial systems.

Property tax exemption. Exempts 100% of the 96

value added by a
renewable energy
system to the assessed
TEXAS

property value.

Enacted in PUC Ruling. 50 kW max;

1985 NEG purchased by utility at
avoided cost at the end of
the billing cycle.
Corporate tax credit. 10% of the cost of Expires 96
installation, up to December
$50,000. 31, 2006.
Personal Tax Credit. 25% of the cost of Applicable
UTAH

installation, up to January 1,
$2,000. 2001,
through
December
31, 2006.
 STATE INCENTIVES 11

Incentives % - rural
STATE

Type and Amount of Length of

Incentives Specifically for Net Metering land/total
Funding Program
Small Wind land area

High Technology Product 100% exemption from Expires in 94

Manufacturers Excise Tax excise tax. 2004.
Exemption
Sales and use tax exemption. 100% exemption from Expires
Must have at least 200 watt sales tax. June 30,
generating capacity. 2009.

"Washington State University

Energy Program: assistance in
finding solutions to energy prob-
WASHINGTON

lems that utilize renewable

energy, including: technical
assistance, education, work-
shops, field assistance and
user-centered solutions.
http://www.energy.wsu.ed
Max capacity: 25 kW; NEG at
the end of each month is cred-
ited to the following month's
bill; NEG at the end of the
annual billing period is granted
to the utility with no compensa-
tion to customer-generator.

Property tax exemption. "Does Exempts 100% of the 94

not include equipment or com- value added by a renew-
ponents that would be present able energy system to
as part of a conventional energy the assessed property
system or a system that oper- value.
ates without mechanical
means."
"Renewable Energy Assistance 10% to 20% of a project,
Program (REAP): applies to up to $75,000.
renewable energy systems
incorporated into construction
projects; half of grant available
at purchase of equipment, the
other half given upon comple-
tion of project; available to busi-
nesses, municipalities, and non-
WISCONSIN

profit organizations.
Public benefits fund. State Approximately $3.8 To be re-
awards grants for low income, million to fund renew- evaluated
energy efficiency and renewable able projects. after 2005.
energy services.

Demand Side Applications of $1.25 million.

Renewable Energy (DSARE);
only for WI northeastern 23
counties.
All technologies < or equal to
20 kW Monthly NEG pur-
chased at retail for renewable
energy systems only (non-
renewable generated energy
purchased at avoided cost).

Opportunity to apply for permits

that guarantee wind access.
12 STATE INCENTIVES

% - rural
STATE

Incentives Specifically Type and Amount of Length of

Incentives Net Metering land/total
for Small Wind Funding Program
land area

Max capacity: 25 kW; 99

NEG at the end of each
month can be credited or
WYOMING

compensated to the bill

for the following month;
NEG at the end of each
year shall be sold to utility
at avoided cost.

"This table was created based upon a report ""Looking Outside - Lessons Learned from Renewable Energy Funds in
Other States or Regions"" written by Ryan Wiser and Kevin Porter. The net metering column information was found on
the Green Power Network - Net Metering, http://www.eren.doe.gov/greenpower/netmetering, latest revision July
2001. Other information on state tax, property tax and loans was found on
http://www.dcs.ncsu.edu/solar/dsire/financial.html, latest revision September 2001. Rural land information from:
http://www1.stateline.org/fact.do?factId=721 (Data is from Highway Statistics '98, Federal Highway Administration,
U.S. Dept. of Transportation); Land information from: http://ga.water.usgs.gov/edu/wetstates.html (Data is from the
Statistical Abstract of the United States, 1987