Wind Association: Level Field with Solar Incentives

John Davis

AWEA logoThe American Wind Energy Association says wind power is not getting the government incentives that solar power enjoys… and that’s keeping wind energy from enjoying the same level of private home and business growth that photovoltaic systems now have.

In a report by the AWAE titled “Small Wind Turbine Global Market Study” featured in this story from, the association says while wind energy has seen a 14-25% growth a year since 1985, that number could be doubled if the start-up costs were subsidized as much as solar is:

The market for small wind systems, systems with capacities less than 100kW, has not seen significant federal policy changes since 1985. While the costs of electricity produced by small wind turbines has declined nearly 40% to 10 cents/kWh, hardware costs have not changed much and still inflict a high upfront burden on the consumer.

Purchasing and installing a small wind system typically cost $3,000 – $5,000 per kW for grid-connected installation. Residential friendly systems (3-5 kW) will shave 60%-80% off the owner’s electric bill. AWEA reports current payback periods for the average wind system range from 6 to 30 years, depending upon a number of factors (wind resource quality, siting, permitting costs, prevailing energy costs, and turbine performance).

Compared to small wind, barriers in the solar PV market have been significantly lessened on the federal level. The Business Energy Tax Credit and the Residential Solar and Fuel Cell Tax Credit (with a $2,000 cap) enacted in 2005, both provide up to 30% tax credits to commercial and residential solar users. These incentive policies are credited in part to the 36% solar PV growth rate in 2006.

The AWEA says similar incentives for small wind would result in similar gains. The Lawrence Berkeley National Laboratory said in 2004 that a 30% federal investment tax credit with no cap would drop the payback period for small wind projects by 4.5 years. The association goes on to say that those start-up costs are really the difference in wind energy really taking off.