Farmer- And Family-owned Wind Rises In Iowa

May 2nd, 2013 by John Farrell

Photo Credit: Flickr user cwwycoff1

Iowa ranks third in installed wind power capacity in the US. It’s 5,500 megawatts are behind only Texas and California (and it has much more wind power per capita). But, like many windy places, the turbines sprouting from the Iowa prairie are often owned by multinational corporations, taking advantage of the local resource and sending the electricity revenue out of state.

Iowa farmer Randy Caviness saw an opportunity to keep the value of Iowa wind local and he’s helped to develop eight utility-scale wind turbines with community ownership, providing clean, local, and locally owned power to municipal and rural electric utilities in southwestern Iowa.

Listen to a conversation with Randy in ILSR’s Local Energy Rules podcast: Play in new window | Download | Embed

The idea began back in 2007, when Randy had an idea to build two wind turbines for the rural electric cooperative serving nearby farming communities. With grants from the USDA rural development program, Iowa production tax credits, and the federal section 1603 cash grant incentive from the 2009 Recovery Act, the two turbines were built in 2010. With the federal incentive slated to sunset in 2011, Randy and his fellow Green Energy Farmers made plans to erect six more turbines, financed by 180 local investors.

Shares in local wind projects were sold to friends and neighbors in the community. Most of the investors live within 30 miles of the turbines they own, and the dividends, tax credits, and economic benefits remain in the community. The legal work was complicated, but not insurmountable. The state tax credits were capped at 2.5 megawatts, so each of the wind turbines are financed and owned by separate LLCs. Randy, along with local banks, was instrumental in setting up the financing schematics for all eight turbines. Community support for the projects was and is strong, and the local utilities have appreciated the source of clean, local, low-cost power. Unfortunately, the expiration of the federal cash grant means there are limited opportunities to replicate the project, but the work of Randy and Green Energy Farmers stands testament to the power of collective ownership of clean energy.

This is the 4th edition of Local Energy Rules, an ILSR podcast that is published twice monthly, on 1st and 3rd Thursdays. In this podcast series, ILSR Senior Researcher John Farrell talks with people putting together great community renewable energy projects and examining how energy policies help or hurt the development of clean, local power.

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Tags: community, community power, community wind power, cooperative, incentives, iowa, local, local ownership, local power, local wind power, tax credits, wind power PTC, Wind PTC

About the Author

John Farrell directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development. Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World. John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

James Wimberley

I support the democratic model of renewable development, but it’s unfair to suggest that farmers and communities do not get anything out of the big investor model. They get rents and local taxes respectively. Community ownership also captures the profits (and potential losses, if the market becomes saturated.) Question to John: can small community-owned wind farms deploy the same sophisticated management tools as big investors?
I suppose that the economies-of-scale in solar PV apply almost entirely at the installation stage, since there’s no maintenance to speak of.
- http://twitter.com/johnffarrell John Farrell
  
  James,
  
  It’s true that farmers can get something out of the big model, but only those that host turbines and not anyone else in the geographic viewshed of the turbines.
  
  I’m not sure what you mean by management tools. Community-based projects (like the South Dakota Wind Partners) contract with the same folks for operations and maintenance as the big developers.
  
  Economies of scale for solar are fairly significant up to the megawatt size – one reason why laws supporting community ownership are so important – but economies of scale for wind fall off sharply beyond a handful of turbines, one reason community-based can be competitive with bigger projects. Additionally, smaller wind projects (like the ones Randy developed) can often interconnect on the lower voltage grid, taking advantage of existing capacity rather than waiting on new high voltage (and often unpopular) transmission development.
  - Bob_Wallace
    
    Everyone who lives in the area of wind farms benefits.
    
    Wind farms pay substantial local taxes and hire people who pay taxes. Those taxes help pay for everyone’s schools, fire/police, road repair, health services. They bring more business to struggling small towns, improving shopping opportunities and creating even more jobs.
    
    The land owners who do lease to turbines have more money to spend locally. That benefits many local businesses including those who sell agricultural equipment.
    
    Republican governors went to bat for wind farm subsidies last December because wind farms are help many of their citizen voters, not just the land owners.
http://www.sustainableenergyadvantage.com/ Richard Fenneman

I can attest to the the large amount of wind projects in Iowa because I am a resident. Most of the wind farms are being put up by big corporations. I didn’t know that some local producers were getting into the fray. This is good news. Now, if we can get more solar projects started, we can really make some progress.
- http://zacharyshahan.com/ Zachary Shahan
  
  Ditto!
  
  would also be great if the community ownership model caught on and spread more. that would make a big difference in several ways.
  - http://www.sustainableenergyadvantage.com/ Richard Fenneman
    
    I agree with that. I have nothing against wind power, but one of the reasons that I like solar PV is the fact that it can make electrical production more democratic. Germany has made huge strides in this area. They have also managed to accomplish this with a much smaller solar resource than the US has available. We just have to make a commitment.
    - http://zacharyshahan.com/ Zachary Shahan
      
      Ditto.