the u.s. small wind turbine industry roadmap

ROADMAPThe U.S. Small Wind Turbine Industry

A 20-year industry plan for small wind turbine technology

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American Wind Energy Association (AWEA)Small Wind Turbine Committee

Contributing Committee Members:

Chair, Mike Bergey, Bergey Windpower

Tod Bartholf, ConsultantKathy Belyeu, AWEADave Blittersdorf, NRG SystemsAlan Caldwell, Prime Energy David Calley, Southwest WindpowerCraig Hansen, Windward EngineeringBob Markee, Energy UnlimitedVaughn Nelson, Alternative Energy InstituteGary Norton, Northern Power SystemsRobert 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, makesany 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 specificcommercial product, process, or service by trade name, trademark, manufacturer, or otherwisedoes not necessarily constitute or imply its endorsement, recommendation, or favoring by the UnitedStates government or any agency thereof. The views and opinions of authors expressed herein donot necessarily state or reflect those of the United States government or any agency thereof.

AWEA SMALL WIND TURBINE COMMITTEE

A 20-year industry planfor small wind turbinetechnology

ROADMAP

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

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

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

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

The Market Potential . . . . . . . . . . . . . . . . . . . . . . . . . . 14U.S. MarketExport Market

The Barriers Identified . . . . . . . . . . . . . . . . . . . . . . . . . 21Near-Term Technology BarriersNear-Term Market BarriersNear-Term Policy Barriers

Mid-Term Technology BarriersMid-Term Market BarriersMid-Term Policy Barriers

Action Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Near-Term Technology Goals and ActionsMid-Term Technology Goals and ActionsLong-Term Technology Goals and ActionsNear-Term Market Goals and ActionsMid-Term Market Goals and ActionsLong-Term Market Goals and ActionsNear-Term Policy Goals and ActionsMid-Term Policy Goals and ActionsLong-Term Policy Goals and Actions

The Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Public PolicyResearch, Development and DemonstrationSmall Wind Turbine IndustryCooperative StrategySummary Schedule of ActionsResearch Priorities Identified

Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Appendix: Detailed List of State Incentives

CONTENTS

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U.S. small wind turbine industry, its part-ners, and its supporters is to deliver theproducts Americans want at a price theycan afford. This task requires progresson several fronts—from public policy ini-tiatives, to technology development, tomarket development.

In addition to meeting the dreams ofAmericans for clean energy, the U.S.small wind turbine industry is also posi-tioned to help the 2 billion peoplearound the world who do not haveaccess to electric power.

Millions of homeowners, farmers, andsmall business owners all acrossAmerica dream of the day they can gen-erate their own electricity from clean,sustainable renewable resources. Theywant the freedom of choosing how theirelectricity is produced, who produces it,and what environmental impacts theirconsumption generates. A full 91% ofAmericans support "investments in newsources of energy, such as solar, wind,and fuel cells," according to a Galluppoll conducted November 27, 2001.

For many of these Americans, smallwind turbine technology offers the bestnear-term hope of supplying products tofulfill that dream. The task before the

FOREWORD

EXECUTIVE SUMMARY

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Our vision is to makesmall wind turbine technol-ogy1 a significant contribu-tor to America’s cleanenergy supply portfolio byproviding consumers withan affordable renewableenergy option for theirhomes and businesses and to make wind energya significant contributor toimproving the quality oflife and economic opportu-nities of people in devel-oping nations worldwidethrough electrification.

VISION STATEMENT:

1 Small wind turbines (SWT) aredefined as having a generatingcapacity up to 100 kilowatts (kW)(~60 ft rotor diameter).

But a great deal of work must be done torealize the potential for small wind technol-ogy. The current products are too few innumber, too expensive, and not reliableenough to ignite the market. Customers facetoo many obstacles in financing, permitting,and installing small wind energy systems,and most receive few, if any, financialincentives to investment from state andfederal governments.

The long-term industry vision is of a majornew category of home energy appliance. Inorder to achieve 50,000 MW the smallwind turbine industry will have to grow toover $1 billion per year and employ over10,000 people in manufacturing, sales,installation, and support. This is possibledue to the sheer number of homes (15million) and small businesses (1 million) thatcould effectively use small wind systems ifthe economics were favorable.

In this roadmap, the industry has identifiedbarriers and appropriate near-term, mid-term, and long-term actions to address thesebarriers. The industry has also tried to prior-itize these actions and identify priorities forR&D efforts. The roadmap is intended tohelp guide government and corporatepolicy towards the overall goal of makingsmall wind a significant contributor toAmerica’s domestic energy supply.

Small wind turbine technology can be ameaningful contributor to our energy securi-ty, strategic technology, and long-term eco-nomic growth. Small wind turbines are a"distributed" generation source with a veryattractive near-term potential for low-cost,rapid growth. Small wind turbines can miti-gate our dependence on foreign energysupplies while providing distinct benefits toour domestic economy. Electricity generatedby small wind turbines uses a clean, non-polluting energy source—the wind.

The AWEA Small Wind Turbine Committeerecognizes the importance of collaborativeplanning and R&D partnering to the futurevitality of the technology—especiallybecause no segment of the industry is cur-rently large enough to guide the entire infra-structure and competitive investments on itsown. By developing this "roadmap," theU.S. small turbine industry is addressing thecritical needs of small wind turbine technol-ogy and is ensuring U.S. industry leader-ship over foreign competitors. Our docu-ment is a framework that can serve todevelop strategic plans for and investmentsin this technology and business—specifical-ly as a U.S. strategic and national resource.

It is time for a combined effort on the partof government and industry to increase thecontribution of small wind turbines to ourelectric generation mix. In 2001, annualsales of the U.S. small wind turbine industryamounted to about 13,400 turbines. Weestimate that turbine sales will increase, andby 2020, small wind turbines could con-tribute 3%, or 50,000 MW, to America’selectric supply. Increasing the energy contri-bution from this home-grown industry couldincrease our energy security and our grossnational product as well as our energysupply. In the process, this technology willalso give the public more energy choicesand make electricity markets more competi-tive.

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Technology Barriers

Near-term-High cost of wind turbines-Insufficient product reliability

Mid-term

-Turbine productivity hampered by power electronics issues

-Domestic market requirement—quietoperation

-Reliability-Need for better technology tools

Market Barriers Policy Barriers

Near-term Near-term

Mid-term Mid-term

-Lack of effective standards-Low visibility of the industry and technology-Misconceptions about the wind resource

-Lack of federal incentives-Restrictive zoning-NIMBY and environmental concerns-Excessive interconnection requirements and unequal billing policies

-Undervaluation of green energy-Disincentives in the tax code

-Insufficient capitalization-Complicated financial impact-Lack of multilateral bank funding for export markets

-Lack of more state-based incentives-Lack of sustained national incentives-Lack of interconnection standards-Lack of national models for net metering andzoning rules

Table 1: Summary of the Barriers Identified

EXECUTIVE SUMMARY

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

EXECUTIVE SUMMARY

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Technology Actions Market Actions Policy Actions

Near-Term(0-3 years)

Mid-Term(4-10 years)

Long-Term(11+ Years)

Crosscutting(Ongoing)

- Develop nationally recognizedstandards for participation in stimu-lus programs

- Publish SWT articles in corner-stone magazines such as ScientificAmerican, to create more "SWTbuzz"

- Revise new U.S. wind maps forSWT, 30 m hub height and .25shear, new legends

- Explain turbine micrositing - Provide information to remove mis-

conceptions about the windresource

- Incorporate the value of environ-mental attributes of small wind intoelectricity prices

- Reduce costs by new turbinedevelopment activity for low windspeed sites and new componentdevelopment for SWT

- Research reliability concerns suchas lightning, corrosion, bearinglubrication, alternator winding insu-lation, electronics

- Continue focused long-termresearch unique to SWT - furling,durability, blade aerodynamics,noise, and power electronics

- Develop packages with other dis-tributed generation and storagetechnologies

- Work to improve the reliability andreduce the cost of power electronics

- Work to eliminate noise from smallturbine designs

- Develop consumer-friendly performance predictions

- Improve analytical design tools- Continue the development of pack-

ages with other distributed genera-tion and storage technologies

- Continually work to reduce costand improve reliability

- Continue to develop standards forreliability, durability, and longevity

- Develop a strategy to work withstate policies for inclusion of smallwind

- Develop a national policy for anSWT tax credit

- Work to eliminate zoning restrictions

- Develop model zoning ordinancesand blueprint templates of zoningregulations, interconnection agree-ments, and other policies

- Work to reduce excessive interconnection requirements



- Update national market study - Characterize the export potential for

U.S. manufacturers and work withmultilateral development programs

- Establish consumer-friendly cus-tomer financing programs, includinglease options

- Increase the number of productsavailable (models and size range)for different market segments

- Increase outreach and education

Table 2: Summary Schedule of Actions

- Influence/develop new state andnational incentives

- Disseminate and expand informa-tion on zoning regulations, intercon-nection agreements, and net meter-ing rules

- Develop a more consumer-friendlynational interconnection standard

- Stimulate the emerging micro-powerrevolution, of which SWTs are part

- Develop hydrogen-based systems- Develop blackout protection

strategies- Establish links with storage and

other power technologies

- Develop policies to help deliverhigher service levels to rural customers

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In 2001, annual sales of the U.S. SmallWind Turbine Industry are estimated to be13,400 turbines valued at about $20million.[1] While this is about the same levelas sales in the early 1980s, it is only about2% of the value of sales of large wind tur-bines in the United States.[2] The success ofthe large wind turbine industry shows theimpact of sustained, substantial support fromgovernment programs and policies (both athome and abroad). Support such as federaland state tax credits was discontinued in themid-1980’s for small wind systems. This ledto a significant shrinking of the industry anda loss of momentum in technology andmarket development.

There are several good reasons why it istime for a combined effort from governmentand industry to increase the contribution ofsmall wind turbines to our generation mix.First, there is the potential for real contribu-tion to our energy supply. We project thatsmall wind turbines could contribute 3% ofU.S. electrical consumption by 2020.Second, small wind technology is a home-grown industry. While the market for otherrenewable energy technologies is dominatedby foreign companies, the U.S. small windturbine industry is the leader in markets athome and abroad.

Third, the market for small wind turbinesalso fuels companion industries, includingthose that market composite products, steel,towers, power electronic equipment, andconstruction projects. Fourth, while produc-ing energy, small wind turbines produce noenvironmental emissions. Fifth, small windturbines help meet the national need forenergy diversification and national security.And finally, the American public overwhelm-ingly supports the expansion of renewableenergy, and they stand to benefit from morechoices about where their energy comesfrom.

Recently, the market for small wind turbineshas been growing 40% per year. As wediscuss later, the potential market for resi-dential and business applications of smallwind turbines is tremendous because it isclear that the turbines work and that peoplewant them. However to realize our vision,significant challenges lie ahead in themarket, policy, and technology areas. We

The U.S. Small Wind Turbine IndustryRoadmap is the result of collaboration overan 18-month period among the members ofthe Small Wind Turbine Committee of theAmerican Wind Energy Association(AWEA). Many industry leaders contributedto this roadmap that will guide activities toachieve the vision of the small wind turbineindustry of the United States.

State of the Small Wind TurbineIndustryThe modern industry for small wind turbineswas born in the energy crisis of the 1970s.Responding to the crisis, consumers turnedto restored vintage designs from the 1930s,to newly manufactured machines based onthe old designs, and to new wind turbinetechnologies developed to meet modernneeds. Most of these turbines were connect-ed to the utility grid. This surge in the U.S.small wind turbine industry, fueled byfederal energy tax credits, state incentives,and high electricity prices, peaked in 1983.Then energy prices fell, federal energy taxcredits expired, and state incentives gradual-ly fell by the wayside. By 1986, the peoplewho still wanted small wind turbines wereinterested in stand-alone or off-grid applica-tions for remote homes. While serving thissmaller domestic market, U.S. manufacturersexpanded their efforts in markets overseas.

Since 1999, electricity prices have beenrising again. People are once again con-cerned about the security of our energy sup-plies and the centralized generating facilitiesthat rely on those sources of energy. Andsome people want independence from elec-tric utilities. There is also a steadily increas-ing concern about global warming. Stategovernments, under utility restructuring, haveenacted significant incentive programs thatbuy down the initial cost of small windturbine systems, thereby tunneling throughthe cost barrier. These incentives are fundedthrough system benefit charge programswhich are significant—totaling $3.5 billionin 2001 for programs that include incentivesfor small wind turbines. All these factorshave increased interest in small wind tur-bines connected to the utility grid.Meanwhile, the U.S. industry continues todominate the overseas market for small windturbines.

Small wind turbinescould contribute 3% ofU.S. electrical con-sumption by 2020.

INTRODUCTION

State of Small Wind TurbineTechnologyThe U.S. small wind turbine industry offersa wide assortment of products for variousapplications and environments. Machinesrange in size from those that generate 400watts (W) of electricity for specific smallloads such as battery charging for sailboatsand small cabins, to 3–15 kilowatt (kW)systems for a home, to those that generate

must overcome these challenges as barriersto widespread use of small wind technology.Then, we devise actions needed to over-come these barriers. And finally, we devisea strategy of public/private cooperation tocomplete these actions and reach our goals.In the end, we expect to deliver small windturbine products that people desire and thatthey can afford, allowing individuals to con-tribute to our energy security.

INTRODUCTION

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Figure 1: Small windturbines are being soldfor use in many differ-ent environments.

fore have relatively low maintenancerequirements.

Thanks to continuous development withinthe industry and in collaboration with theU.S. Department of Energy (DOE) smallwind turbine projects, several new featuresare in development for incorporation intocommercial turbines. Advanced airfoils,super-magnet generators, smart power elec-

up to 100 kW of electricity for large loadssuch as a small commercial operation.

Small wind turbines can operate effectivelyin most of the rural areas of the UnitedStates. In fact, about 60% of the UnitedStates has enough wind for small turbines togenerate electricity. Today’s small turbineshave been designed for high reliability withonly two or three moving parts and there-

INTRODUCTION

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ty, eliminate noise concerns, and lowermanufacturing and installation costs.There is much to be done both to incor-porate the technologies currently underdevelopment and to enhance manufactur-ing. As an example of the cost reduc-tions that are possible, the industry esti-mates that high-volume manufacturingalone could reduce costs 15–30%.

tronics, very tall towers, and low-noise fea-tures will help reduce the cost of electricityand increase the acceptability of this tech-nology.

Small wind technology has been improv-ing since the 1970s. However, it is stillgenerally acknowledged that more workis needed to improve operating reliabili-

Our vision is to makesmall wind turbine tech-nology a significant con-tributor to America’sclean energy supplyportfolio by providingconsumers with anaffordable renewableenergy option for theirhomes and businessesand to make windenergy a significant con-tributor to improving thequality of life and eco-nomic opportunities ofpeople in developingnations worldwidethrough electrification.

INTRODUCTION

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Key elements of our vision

1. Enhance America’s energy diversityand security

2. Increase competition in electricmarkets by giving consumers thechoice of a clean power source

3. Develop small wind turbines as ahousehold energy appliance andbusiness tool (by lowering competi-tive energy costs)

4. Build an industry to meet the explo-sive growth potential

5. Contribute to rural infrastructuredevelopment worldwide

VISION STATEMENT:

to a solar electric system operating in thesame environment. Both technologieshave the potential for significant costreduction and for substantial roles in dis-tributed generation markets. In our expe-rience, the public is most concerned withfinding a clean technology they canafford, whether that be wind or solar ora combination of both.

Responding to more active markets in thelast few years, the small wind turbineindustry has increasingly adoptedadvanced component technologies andstate-of-the-art design tools such as three-dimensional solid modeling and compu-tational fluid dynamics. Technologiessuch as unique high-efficiency airfoils,neodymium-iron-boron "super-magnet"generators, pultruded FRP blades,graphite-filled injection molded plasticblades, special purpose power electron-ics, and tilt-up tower designs have bothlowered costs and increased efficiency.The long-term vision of the industry is toproduce small wind turbines that areaccepted as common household appli-ances in the same way that heating andair-conditioning systems are today. Byvirtue of their compelling economics,these new turbines will achieve highmarket penetration in areas with lower

Modern small wind turbines are not likeour grandparents’ wind generators fromthe 1920s and 1930s. Today’s small tur-bines borrow from aerospace technolo-gies with sophisticated, yet simple,designs that allow them to operate reli-ably for up to a decade or longerwithout maintenance. Current productsare designed for operational lives of 20to 30 years, and they have withstoodeverything, short of a direct hit from atornado, that Mother Nature can throwat them. As small wind turbine technolo-gy has matured, the products havebecome mechanically simpler and morerobust.

As shown in Table 3, small wind turbinesare very competitive with other renew-able energy technologies that are suit-able for homes, farms, and small busi-nesses. Small wind systems, for example,cost less than half the price of compara-ble photovoltaic systems. We do notforesee a time when solar electricsystems will be less expensive than smallwind systems. Solar electric systems dohave the advantage of wider geographicapplicability, and they can be used indenser suburban or even urban environ-ments. However, the wind resource in agood area can lead to much highercapacity factors for small wind compared

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THE TECHNOLOGY OPPORTUNITIES

Status of theTechnologies

Status

Installed cost

Payback Period

Cost Potential

Typical Site

Available Resources

Small WindSolar ThermalElectric

Photovoltaics

Commercial Demo Commercial

$4/Watt $10/Watt $8/Watt

15 Years 30+ Years 25 Years

Poor–Great Poor–Good Poor–Good

Rural Southwest Suburban

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

Table 3: Comparison of Home-Based Renewables

relationship between DOE/NREL and thesmall turbine industry is important today,and it will become increasingly importantas international competition heats upover the next five to ten years. All partiesneed to realize that large wind turbinesare now in their seventh or eighth gener-ation of technology development, whilesmall wind turbines are only in theirsecond or third.

For its part, the industry is striving toreduce the cost of electricity generatedby small wind turbines. In 2002, typical5- to 15-kW residential wind turbinescost about $3,500 per installed kilowatt.These turbines produce about 1,200kWh per year of electricity per kilowattof capacity in an area with a DOE class2 wind resource.2 By 2020, the industryhopes to have lowered the installed costto between $1,200 and $1,800 per kilo-watt (smaller systems being relativelymore expensive) and to have raised theproductivity level to 1,800 kWh perinstalled kilowatt. If these goals are met,the 30-year life cycle cost of energy willbe in the range of $0.04 to$0.05/kWh, lower than virtually all resi-dential electric rates in the countrytoday.

To further enhance the attractiveness ofsmall wind turbines to consumers, thereis also a need for meaningful, appropri-ate, and cost-effective standards and acertification program for them. Somenew entrants to the industry have signifi-

housing densities and sufficient windresources.

People, however, do not tend to livewhere the wind howls, so achieving highmarket penetration rates will requiresmall wind turbines that are speciallydesigned to work effectively in low windresource areas. These turbines of thefuture will need to have relatively largerrotors to capture more energy. But theycannot sacrifice robustness because evenareas with low average wind speedsexperience severe weather. The new tur-bines must be extremely quiet, so thatthey are seldom heard above the localbackground noise. They must be able tooperate for 10 to 15 years betweeninspections and/or preventive mainte-nance, and they must offer a reasonableexpectation of a 30- to 60-year operat-ing life. Most important of all, the smallwind turbines of the future must beaffordable without significant subsidies.

Achieving these goals will require furtheradvances in small wind turbine technolo-gy, major improvements in small turbinemanufacturing, and more efficient instal-lation techniques. The U.S. Departmentof Energy (DOE) and the NationalRenewable Energy Laboratory (NREL)have critical roles to play in acceleratingthe development and adoption of newsmall wind turbine technology and manu-facturing techniques. A close working


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

2002 2020

Cost/kW $3,500 $1200–1800

Annual ElectricityProduction (kWh) 1,200 1800

Costs and electricity production fortypical 5- to 15- kW residential wind turbines

To assist industry in addressing tech-nology barriers, four models of govern-ment/industry collaboration areemployed.

1. Research conducted at nationallaboratories and universities withinput from members of the industry.

2. Applied research projects conduct-ed at the facilities of small windturbine companies with supportfrom the government through com-petitive procurement.

3. Applied research projects involvingcompanies, universities, andnational laboratories.

4. Privately funded research anddevelopment.

The opportunities offered by improvedtechnology can be achieved through thecooperative activities discussed in thisroadmap for the small wind turbineindustry. Work by industry members,research institutes, state and local gov-ernments, and DOE can help increasethe contribution of small wind turbines tothe electricity generation mix.

cantly underestimated the engineeringrigor and expense required to deliver areliable small wind turbine product. And,in light of recurring instances of exagger-ated claims, consumers have had troublesorting out reasonable from unreason-able claims of performance. The stan-dards and certification programs thatexist for large wind turbines are notappropriate for small wind turbines.Appropriate standards for small wind tur-bines are under development by theinternational industry and by researchinstitutions. However, the U.S. industryand DOE must also work to ensure thatrelated standards, such as electrical gridinterconnection standards, are justifiedand do not unduly raise the costs ofowning a small wind turbine.

The industry believes that research coop-eration between the private and publicsectors is strategically important if theU.S. industry is to maintain its leadershipposition. The engineering challenges pre-sented by the interlocking disciplines ofaerodynamics, structures, controls, elec-trical conversion, electronics, and corro-sion prevention are formidable. Thereare also a number of generic technologyopportunities that are not likely to befully explored by the private sectoralone. Government and industry mustwork together to build a better smallwind turbine.


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The 1981 ADL study was quite conserva-tive. Although it considered windresources, electricity costs, and availableincentives, it excluded more than 100counties with high population densities.Today, we know that many of these coun-ties have small wind systems and thatthousands of properties in these counties

The most recent public market study forsmall wind generators was the A. D. Littlestudy sponsored by DOE in 1981. [2]That report (the ADL study) projected amarket potential of 3.8 million small windsystems installed in grid-connected appli-cations. If the average generating capaci-ty of these systems were 10 kW, then thepotential contribution to the nation’s gen-eration mix would be 38,000 MW.

U.S. MarketWe estimate that small wind turbineshave the potential to contribute up to 8%of U.S. electrical demand in 2020. Ourindustry goal is to install turbines thatwill generate at least 3% of U.S. electri-cal demand in 2020 or 6-8% of residen-tial electricity demand. This will requiresmall wind turbines installed with a totalgenerating capacity of 50,000 MW.

THE MARKET POTENTIAL

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In 2001, we estimate that 13,400 smallwind turbines were manufactured in theUnited States. More than 50% of thesewere exported. We believe that both thedomestic and foreign market for smallwind turbines will continue to grow. Thisroadmap is designed to accelerate thisgrowth to its maximum potential.


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Figure 2: Energy pro-duction for small windturbines in the UnitedStates.

The goal for the smallwind turbine industryis a generating capaci-ty of 50,000 MW orthe ability to satisfy3% of U.S. electricaldemand in 2020.

In 2020, there will be approximately 43million homes with 1/2 acre or more ofland. Of these homes, we estimate 65%will be prevented from using small windtechnology because the wind resource isnot sufficient,4 because of restrictivezoning and covenants, or because ofproximity to airports or other sensitiveareas. This will leave 15.1 million homeswith the potential to install a small windturbine. If each of these homes installeda 7.5-kW machine, the total contributionto generating capacity would be113,000 MW. (see Table 4)

Other Domestic Markets

When combined, other markets for smallwind turbines in the United States offersignificant opportunities to expand elec-tric generation capacity. For example,about two million medium-sized commer-cial buildings5 are candidates for smallwind turbines of 10 to 100 kW. In addi-tion, public facilities such as schools andgovernment buildings could also usesmall wind turbines at suitable sites.

Another distributed generation marketsector includes industrial and commercialcustomers who are connected to the

are suitable for small turbines. We alsoknow more about the wind resource andcan better estimate the number of homesin suitable wind regimes.

In this roadmap, we estimate the poten-tial contribution of small wind turbines bydividing the market into sectors.

Rural Residential Market Sector—Distributed Generation

The largest potential market for small wind tur-bines is for homeowners in rural areas wherewind-generated electricity can reduce utilitybills. In 1998, American homes used 1.1 tril-lion kWh or 35% of total electricity sales.Electricity consumption in the residentialsector exceeds the consumption in either com-mercial or industrial sectors. Homeownersbuy wind turbines to reduce their electricitybills, and federal laws (such as PURPA 210)guarantee their right to use them.3 Whilesome wind turbines may be installed when anew home is built, most market opportunitieswill be for installations at existing homes. Asmall wind turbine produces energy that iseither consumed immediately in the home ortransferred to the power grid and consumedby a neighbor.


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2000 2010* 2020

Homes with 1/2 to 1 acre of land

Homes with more than 1 acre of land

Gross potential number of homes for wind turbines

Net potential number of homes for wind turbines 7.6

21.6

21.6

N.A.**

13.0

37.2

25.2

12.0

15.1

43.2

29.3

13.9

Millions of U.S. Homes Connected to the Utility Grid

*The number of homes has been growing 1.54% per year (U.S. Census Bureau, American HousingSurvey, Census Bureau: Washington, D.C., 1998).

**Appropriate small wind technology not yet available for lots under one acre.

Table 4: Residential Market Potential for Small Wind Turbines

3 To meet the electrical needs of a typical home, a small wind turbine in a moderate wind regime must havea 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 necessarywith today’s technology for effective production of electricity with small wind turbine generators.5 Fewer than 25,000 square feet under one roof.

Table 5: Other Potential Markets for Small WindTurbines in the United States in 2020 [3]

Units Avg size in kW Total MW

Commercial buildings

Public facilities

Off-grid homes

Off-grid communities

Water pumping

Telecommunications

Total

675,000

160,000

150,000

200

350,000

2,000 2 4

25,729

1

250

3

50

25 16,875

8,000

450

50

350

farms, and livestock. Today, there arealso new wind-electric water pumpingsystems for which the turbine can belocated where there is good exposure tothe wind, and it does not have to belocated near the well and pump.However, for low wind speed sites, themechanical water pumper still offersmore economic water pumping.

Deregulation of the telecommunicationsindustry and the rapid growth in wirelesssystems has spawned growth in thedevelopment of remote broadcast facili-ties. The preferential method of poweringthese facilities is hybrid systems thatcombine generation from solar, wind,and diesel systems.

These other markets could contribute upto 25,000 MW of generating capacityby 2020. From this discussion, we con-clude that the total installed capacity forsmall wind turbines in 2020 could be140,000 MW across all markets.However, the goal of the AWEA SmallWind Turbine Committee is to install50,000 MW of small wind turbines by2020. (See Tables 4 and 5)

According to figures taken from the mostrecent EIA documents, the total generat-ing capacity in the U.S. in 1999 wasapproximately 745,000 MW. Accordingto the EIA Annual Energy Outlook 2001,

utility grid and may have back-up gener-ation requirements, which could easilybe integrated with a larger small turbine.Since the utility rate structure is typicallydifferent from the residential market (e.g.demand charges), further study isneeded to specifically define this market.

Where the utility grid is not available,stand-alone or hybrid6 systems couldprovide electricity for homes, communi-ties, water pumping, and telecommunica-tions services. The Energy InformationAdministration (EIA) estimates that thereare 200,000 off-grid homes in the U.S.This is already a very active market forsmall wind systems.

There are also a number of off-grid com-munities that are remote, isolated, andproduce their electricity with diesel orgasoline generators. Alaska, forexample, has 91 villages powered bydiesel generators, serving a populationof about 42,000 people. In addition,several hundred miscellaneous remotefacilities are powered by diesel genera-tors ranging in size from 2 to 250 kW.

In addition, water pumping for livestockand off-grid facilities is still a sizablemarket. In the early part of the 20thcentury, the United States had aboutthree million mechanical windmills inoperation, supplying water for homes,


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6 Hybrid systems combine other generation such as solar cells or gas generators along with storage batteriesto provide reliable power off-grid.

to 50,000 MW in 2020 would require adoubling of the market each year forseveral years and then require sustainedsales growth in the range of 50–55% peryear. In this scenario, the domestic smallwind turbine industry would reachannual sales of $1 billion and employapproximately 10,000 people in 2020.

Export MarketU.S. manufacturers of small wind tur-bines currently export more than 50% oftheir production and have a leading

produce an estimated 132 billion kWhof clean electricity per year, or approxi-mately 3% of projected total U.S.demand. At this level of capacity, smallwind systems would be providing 6-8%of residential sector electrical demand.The EIA Annual Energy Outlook docu-ment forecasts that the residential electricsector demand will be 1,701 billionkWh in 2020.

Growing the domestic market from itscurrent installed capacity of 15–18 MW


19

small wind turbine markets, even withattractive incentives and favorable poli-cies, will not match the pace of marketpenetration of other common householdelectrical devices with lower price tagsand easier implementations.Our goal of 50,000 MW of small windcapacity by 2020 is aggressive butachievable given the right public policyenvironment, particularly over the nextten years. Fifty gigawatts (50,000 MW)of small wind turbines in 2020 would

the projection for 2020 is 1,060,000MW of generating capacity and 4,804billion kWh in demand.

Although the domestic potential for smallwind generating capacity is estimated at140,000 MW in 2020, we do notbelieve that this is a realistic goal. Thelimitation we see is market growth, notmanufacturing capacity or sales andsupport infrastructure. The growth of


18

Figure 3: Incentives forsmall wind turbines inresidential applica-tions.

Notes:1. Incentives change

often.2. Net metering has not

been determined forall municipal utilitiesand rural electriccooperatives.

carbon dioxide per kilowatt hour thandiesel generators do. Small wind systemscan be used to electrify single homes(<500 W) or villages (<50 kW). Thereare also a myriad of special uses ofwind electricity, such as making ice forcoastal fishing villages, charging batter-ies for distribution to single homes, andpurifying water for drinking.

Developing countries have a high poten-tial demand for small wind systemsbecause they normally do not havemajor electrical power plants servingrural areas. However, the people areusually too poor to buy small windsystems and need financial assistancefrom their government in order to affordthem. This assistance is, today, almostexclusively directed to subsidizing exten-sion of the grid and installing diesel gen-erators. A breakdown of the estimatedexport market potential for 2000, 2010,and 2020 time frames is shown in Table 6.

share of the world market for this tech-nology. The foreign market for grid-con-nected wind turbines is fueled by electric-ity prices more than double those facedby U.S. consumers. In addition, it hasbeen estimated that about 2 billionpeople in the world do not have accessto electricity for domestic, agricultural, orcommercial uses.7 The traditional methodof providing electricity by extending thedistribution grid has proved to be expen-sive and poorly suited to the low con-sumption levels of communities in devel-oping nations. And the number of homeswithout electricity is increasing becausethe birthrate is outpacing the electrifica-tion rate.

Small-scale renewable energy systems(wind, micro-hydro, and solar) are oftenless expensive to install than line exten-sions. Small turbines are less expensiveto operate and produce much less


20

2000 2010 2020

Single home systems

Village systems

Facilities

Miscellaneous

Totals

Number(millions)

Avg size(kW)

Number(millions)

Avg size(kW)

Number(millions)

Avg size(kW)Total MW Total MW Total MW

150.0

3.8

7.0

5.0 1.0

1.0

10.0

0.2 30,000

38,000

7,000

5,000

80,000

6.5

9.1

4.9

195.0 0.3

10.0

1.5

1.5 9,800

130,950

13,650

49,000

58,500 260.0

6.6

12.2

8.7

0.4

10.0

2.0

2.0

211,800

17,400

24,400

66,000

104,000

Table 6: Potential Markets for Small Wind Turbines inForeign Countries

7 World Bank, 2000.

Source: AWEA Small Wind Turbine Committee, 2001.

Near-Term Market Barriers

Lack of effective standards

As the domestic market continues toexpand, consumers need protection fromunscrupulous suppliers chasing the latesttrend in search of wealth. Further, responsi-ble small turbine manufacturers need abaseline for establishing turbine perform-ance and credibility. There are existinginternational safety and draft national per-formance standards for small turbines thatcould be used by state or national incentiveprograms. The issue is the cost to meet thetesting and documentation requirements ofthese standards.

The existing design standards are primarilyrelated to structural safety and do not direct-ly address issues of reliability, durability,and longevity. There is no equivalent toConsumer Reports in the small wind indus-try.

Low visibility of the industry and tech-nology

There are relatively few small wind turbineinstallations, so people just do not see smallwind turbines very often. In addition, thecompanies of the small wind turbine indus-try have limited resources and capabilitiesto promote the technology. Unlike the solarindustry, there are no Fortune 500 compa-nies involved at this time in the small windindustry. Adding to the issue, DOE hasfocused the majority of its resources andpublicity on solar technologies.

Misconceptions about the wind resource

The attention given to wind farm develop-ments in high-wind areas has convincedsome people that they must have an excep-tional wind resource in order to benefit fromwind technology. However, small wind tur-bines are designed to operate effectively inthe lower wind speed areas where mostpeople live and work. DOE wind mapshave inadvert-ently exacerbated theproblem by classifying wind regimesaccording to their potential for wind farmdevelopment.

Identifying and prioritizing barriers is animportant prerequisite to industry planning.Different companies and other stakeholdersoften have differing views on the mostimportant barriers, and there is a naturaltendency to focus on short-term challenges.Reaching consensus on the barriersrequired a number of meetings and size-able investment in time, but this consensusprovides the foundation for plotting the pathto a billion-dollar industry.

Outlined below are technology, market,and policy barriers for the near-term, mid-term, and long-term time frames.

Near-Term (0–3 Years)Technology Barriers

High costs of wind turbines

Although people want small wind turbines,most find the price is too high. System costscan be reduced by increasing productionrates and advancing the technology.Regarding production rates, small wind tur-bines are produced in limited quantities, sothere are only limited economies of massproduction. Advances in technology, suchas new airfoils for blades, super-magnetgenerators, and power electronics canmake small wind turbines cheaper to build,more productive, and more reliable. Thecost to consumers can be reduced withincentives.

Insufficient product reliability

It is a substantial challenge to design, man-ufacture, and install small wind turbines thatare low in cost and yet rugged enough towithstand 20 to 30 years of operation inweather that is often severe. Small windturbine technology development is both artand science. The true measure of a newdesign is often not known until several yearsof operation at dozens of sites. At present,there is no way to effectively duplicate thewear and tear of the real world during theproduct development stage. As a result, reli-ability has historically been the Achilles heelfor small wind turbine technology.

THE BARRIERS IDENTIFIED

21

planning to install a small wind turbinesystem and the local zoning boards thatmust approve permits typically do not havea fair basis for understanding the noise,visual, and other impact of the turbines.They fear the worst and act accordingly.Consumers who need approval fromzoning boards often run into objectionspresented by concerned neighbors.Dealing with these objections can demandconsiderable time and expense.

Excessive interconnection require-ments and unequal billing policies

Even though the federal Public UtilityRegulatory Policies Act (PURPA section210), gives all Americans the right to inter-connect small wind turbines and to receivepayment for excess electricity production,the policies of many utilities discouragethe use of these systems. Many utilitieshave limited experience with customer-owned generation. They may use the sameprocess for approving 500-MW gasturbine co-generation facilities and 10-kWresidential wind installations.

It sometimes takes more hours of labor bythe customer and the wind turbine vendorto gain the approval for interconnectionthan it took to build and install the windturbine itself. Weak or uninterested publicutility commissions can allow utilities toeffectively thwart the federal rights provid-ed under PURPA. Interconnection standardsthat have emerged in the last five yearshave required small wind turbines todeliver to the utility grid power that is ofhigher quality than the power delivered bythe utility to its customers. Meeting theseexcessive standards increases the cost ofthe wind generating systems.

In more than 35 states, there is a policycalled net metering, in which consumersreceive the retail rate for electricity theygenerate in excess of their consumption.But even under net metering, there is agreat variation from state to state andutility to utility concerning the accountingperiods, capacity limits, limits to participa-tion, and cost/benefit of net excess gener-ation. This creates uncertainty in the mar-ketplace.

Near-Term Policy Barriers

Lack of federal incentives

For small wind turbines, there has been nofederal tax incentive or deploymentprogram since 1985. The resulting lowerlevel of business activity has affectedindustry expenditures on research anddevelopment and has slowed the pace ofinnovation. DOE has supported sporadicinitiatives for research and developmenton small wind turbines since 1985.However, this level of investment by thefederal government has not been sufficientto realize the potential for cost reductionsor leveraged deployment.

Restrictive zoning

Most local jurisdictions limit the height ofstructures in residential and sometimesother zones to 35 feet. This restriction wasdeveloped nearly 100 years ago to ensurethat the height of structures would notexceed the capability of fire fightingequipment to pump water. Today, thisheight limit is a significant obstacle tositing small wind turbines.

To make effective use of the wind, smallturbine towers must be at least 60 feethigh and well above obstacles (such astrees) in their vicinity. Wind speed increas-es with height above the ground.Turbulence, the disruption of the wind flowaround obstacles, increases near theground and reduces energy output of smallwind turbines.

Putting a small wind turbine on a shorttower is like putting a solar panel in theshade. For many residential applications,systems of 5 to 15 kW, turbines need tobe on towers from 80 to 120 feet tall. The35-foot height restriction causes unneces-sary expense and delay when getting abuilding permit and opens up opportuni-ties for neighbors to oppose the permitbecause of either legitimate concerns orunderlying historical animosities.

NIMBY and environmental concerns

Because there are few installations of smallwind turbines, the neighbors of people


22

because the wind is such a variable envi-ronment for a piece of machinery. How aturbine withstands the long-term effects ofthe wind is often known only afterseveral years of operation at dozens ofsites. There needs to be a way to effec-tively duplicate the wear and tear of thereal world during the product develop-ment stage. This will require the develop-ment and verification of acceleratedtesting protocols for reliability, durability,and longevity.

Need for better technology tools

Many small turbines use a passive over-speed control such as furling. In furling, theforce of the wind turns the rotor sideways,just as farm water-pumping windmills havedone for 100 years. So far, no computercodes have ben able to predict the perform-ance or assist in the design of furling mecha-nisms. This means such designs need to beperformed empirically, raising developmentcosts. Better computer codes are needed tohelp reduce design costs.

Mid-Term Market Barriers

Insufficient capitalization

U.S. small turbine manufacturers are entre-preneurs who have a deep dedication torenewables, but who also have limitedresources. Their businesses lack the capital-ization to effectively promote mass markets,exploit design-to-cost technology options, orprovide forward pricing to acceleratemarket adoption. They struggle in a capitalintensive business that requires substantialinvestments in technology and overcominginstitutional barriers. While the solar industryhas consumed billions in investment over thelast two decades, the small wind turbineindustry has attracted far less capital.

Complicated financial impact

For consumers, purchases like small windturbines that have longer lifetimes are moredifficult to understand financially. Consumersgenerally look at monthly cash flow or directout-of-pocket expenses and rarely considerlife-cycle costs. They also do not tend to con-sider tax consequences fully. This makes it

Undervaluation of green energy

No economic credit is given for having anonpolluting energy source. For everykWh produced by a small wind turbine,102 pounds of carbon dioxide, 0.57pounds of sulfur dioxide, and 0.34 poundsof nitrogen oxide emissions are avoided.

Disincentives in tax code

Companies that buy fuel or electricity candeduct these costs as business expenses,reducing their reported profits and theirtax liability. Companies investing inenergy-producing equipment, on the otherhand, must capitalize the investment,increasing reported profits and tax liabili-ties. The accelerated depreciation sched-ule for wind energy investments helps, butdoes not level the playing field.

Mid-Term (4–10 Years)Technology Barriers

Turbine productivity hampered bypower electronics issues

Because small turbines operating at vari-able speed produce variable frequencyand variable voltage output, power elec-tronic converters are used to modify thewild AC into standard 60-cycle AC. Theold inverter technology was too unreli-able. The new inverter technology is tooexpensive. The industry needs lowercost, reliable power electronics.

Domestic market requirement—quietoperation

High-growth domestic markets demandquieter wind turbines, especially whenturbines are sited in residential neighbor-hoods. Turbine noise can be caused bygearboxes, blade shape, tower shadow,etc. Small turbines operate at high RPMand tend to spin even if they are furled(pointed out of the wind); there needs tobe a way to make them extremely quietunder all conditions.

Long-term reliability

As mentioned above, reliability is a long-term issue that is difficult to predict


23

Need for sustained national incentives

As mentioned above, the lack of federalincentives slows the pace of industry growthto meet the market demand. Other tradition-al energy source technologies are beingsubsidized, and as noted above, federal taxpolicies actually encourage the use of fossilfuel and utility power.

Need for national models for net metering and zoning rules

There are too many state, county, and cityjurisdictions for the wind industry to addressthe policy needs of each. For example, inCalifornia there are 538 counties and incor-porated cities. A 2001 industry study esti-mated that addressing the zoning barrierswith new ordinances in each jurisdictionwould cost more than $20 million andwould require more than 200 person-yearsof effort. This finding led to a state zoningbill, AB1207. National regulations, likethose passed for satellite TV, would be veryhelpful to the industry.

Lack of interconnection standards

Few states have standardized interconnec-tion requirements, and many public utilitycommissions give utilities broad discretionon policies towards customer-owned genera-tion. Some utilities have used this freedom todiscourage competition through excessiverequirements for equipment, special tests,and additional insurance.There is a need fora national interconnection standard devel-oped by a technically recognized body.

difficult for them to compare small wind tur-bines with other potential investments.

Lack of multilateral bank funding forexport markets

The World Bank and Global EnvironmentalFacility have been funding substantiallymore solar projects than small wind projects,even though the cost of electricity from smallwind turbines is lower than from solar elec-tric products. [2] There is a need for thesmall wind industry and its partners toprovide in-house technology expertise to theWorld Bank, which has proven to be suc-cessful for the solar industry.

Mid-Term Policy Barriers

Need for more state-based incentives

Currently, four states (California, Illinois,New Jersey, and Rhode Island) offer sub-stantial rebate or buy-down programs topromote the installation of renewable energyequipment. Rebates typically range from 50to 60% of the installed small wind systemcost, resulting in significant savings. Otherstates, such as Wisconsin, offer production-based incentives. (See the appendix for afull listing of state incentives in 2002.) Ifmore states offered incentives, the sales andproduction volume for small wind turbineswould increase.


24

• Develop advanced airfoils suitable forsmall wind turbines.

• Develop advanced permanent magnetalternator and other generator technolo-gy suitable for small wind turbines.

Reduced tower and installation costs

Actions• Develop advanced, lower-cost foundation

or anchoring systems for towers.• Develop automated processes for tower

fabrication.• Develop alternate, lower-cost tower

designs.

Improved turbine reliability

Actions• Develop test methods for reliability issues

like "extreme events."• Gather multi-year data on turbine per-

formance, reliability, operation, andmaintenance.

• Develop structural safety standards forthe small turbine industry.

Increased participation of small windturbines as a technology option indomestic government programs

Actions• Work with the Federal Energy

Management Program to develop smallwind projects at federal facilities.

• Promote small wind turbines for home-land security and other military opera-tions.

Reduced manufacturing costs byincreasing the volume of production

Actions• Engage manufacturing consultants to

advise individual manufacturers onimproved manufacturing techniques,improved throughput time, and develop-ment of a manufacturing plan.

• Encourage small turbine manufacturers toexplore state incentives for building man-ufacturing businesses.

This roadmap of the U.S. small windturbine industry identifies the background,status, and potential of the market for smallwind turbines. The roadmap points to tech-nology, market, and policy goals and thespecific actions necessary to meet thesegoals. Many groups will need to partici-pate in the activities described here inorder to realize our vision of U.S. smallwind turbines as a significant contributor toAmerica’s energy supply portfolio.

These high-priority goals have been identi-fied by the AWEA Small Wind TurbineCommittee to overcome the barriers identi-fied in the previous section. Under eachgoal are listed specific actions that can betaken by the industry working in concertwith federal, state, and local governmentsto meet these goals. Progress on theseitems in the near-term, mid-term, and long-term timeframes will help make the visionof this roadmap a reality.

Near-Term (0–3 Years)Technology Goals andActions

Reduced cost of energy resulting fromturbines that operate in low-windregimes

Actions• Develop U.S. technology for low-cost,

robust rotors optimized for low windspeed regimes.

• Develop low-cost, very tall towers.

Turbine cost reduction throughimprovement of the performance andefficiency of small wind turbines

Actions• Support cost-shared component develop-

ment projects.8

• Conduct applied research projects aimedat improving the efficiency of small windturbines through better integration of sub-systems.9

ACTION PLAN

25

8 In-house research projects are supported by the government through competitive, cost-shared procurementthat may include cost sharing by the companies involved.

9 Universities, research institutes, and companies work together on applied research projects.

• Develop a Web-based performance pre-diction capability based on high-defini-tion wind maps.

• Develop improved guidelines for microsit-ing considerations for small wind tur-bines.

Improvement in the reliability anddurability of small wind turbines

Actions• Develop improved life-cycle testing proto-

cols and analytical methods for smallwind turbines.

• Develop better understanding of designload characterization for enhanced relia-bility, durability, and longevity.

• Identify design elements necessary toachieve 50-year operating life.

• Perform durability and reliability testingfor environmental extremes.

• Support company-specific, in-house relia-bility enhancement projects.

Reduced maintenance requirements ofsmall wind turbines

Actions• Support company-specific, in-house proj-

ects to reduce maintenance requirements. • Conduct applied research on generic

maintenance issues through hardwareverification projects.

Enhanced analytical tools for smallwind turbine design

Action• Enhance design techniques and capabili-

ties, particularly rotor aerodynamics anddynamics that are unique to small windturbines.

Improved understanding of passivecontrol of small wind turbines

Action• Conduct applied research on generic

passive control issues for small wind tur-bines.

Development of equipment andprocesses for mass production of smallwind turbine systems

Actions• Support company-specific in-house activi-

ties to improve manufacturing processes. • Support development of components

designed specifically for mass production.

Mid-Term (4–10 Years)Technology Goals andActions

Development of improved power electronics10

Actions• Support cost-shared company research

on power electronics equipment. • Conduct applied research on generic

power electronics issues.

Reduction of noise produced by smallwind turbines

Actions• Develop a noise measurement and

reporting standard for small wind tur-bines (different from the IEC 61400-11addition to the noise test standard).

• Conduct cost-shared, company-specific,in-house noise reduction projects.

• Conduct applied research on genericnoise issues of small wind turbines.

Creation of higher-definition perform-ance predictions based on resource tohelp customers in site selection11

Actions• Initiate research to better understand the

higher turbulence and shear environ-ments in which small wind turbinesoperate.

• Develop an improved performance pre-diction methodology for small wind turbines.

26

ACTION PLAN

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 willresult in poor performance and give realistic assessments of performance for small wind turbines.

Development of a consumer-friendlyperformance rating system

Actions• Update and reconcile the AWEA per-

formance standard with the IEC 61400-12 for small wind turbines.

• Promote adoption of the AWEA estimat-ed annual energy output parameter.

Increased visibility and credibility ofsmall wind turbines

Actions• Encourage DOE to give small wind

greater visibility through policy incen-tives, studies, and speeches.

• Publish in cornerstone magazines such asScientific American and Popular Scienceto highlight small wind as an importanttechnology.

• Publicize the new generation of productscoming out of government-supporteddevelopment contracts.

• Increase outreach to state energy officesand other important local and regionalstakeholders.

• Create a significant federal deploymentinitiative for small wind turbines to primeimportant markets.

Completion of high-definition windmapping for all states and for interna-tional markets

Actions• Complete high-definition wind maps for

each of the 14 states targeted by theAWEA Small Wind Turbine Committee asoffering the best opportunities for smallturbine installations. (Measurementstaken at 24 meters [80 feet] above theground.)

• Complete high-definition wind maps forthe next 16 states on the AWEA SmallWind Turbine Committee’s pri-ority list.

• Modify existing international windresource maps for small turbine charac-teristics such as height, class descriptors,and approximate kilowatt-hours of pro-duction.

• Develop an improved performance pre-diction methodology for small wind turbines.

Long-Term (11+ Years)Technology Goals andActions

Develop hydrogen-based systems

Action• Establish link with other hybrid power

technologies such as micro gas turbines,PV panels, diesel and other fuel genera-tors, and any new power generatingtechnologies that may develop.

Establish links with storage and otherpower technologies

Action• Establish links with storage and other

power technologies such as hydrogengeneration and storage, batteries,natural gas sequestration, and any newstorage technologies that might develop.

Near-Term (0–3 Years)Market Goals and Actions

Development of additional efficientand effective standards

Actions• Create U.S. and international IEC stan-

dards to address reliability, durability,longevity, noise, and power perform-ance.

• Complete the IEC 61400-2 draft safetystandard.

• Complete development of a cost-effectiveand efficient certification program forsmall wind turbines.

Development of stronger, certified dis-tribution channels and support

Actions• Develop generic installation and mainte-

nance training programs for small windturbines.

• Pursue technologies of communicationwith distributed generation installations(remote monitoring).

• Develop certification program forinstallers.

ACTION PLAN

27

• Increase programmatic involvement forsmall wind turbines in the National WindCoordinating Council, the NationalAssociation of State Energy Officials, theUtility Wind Interest Group, the NationalCouncil of State Legislators, and others.

Increased participation of small windas a technology option in internationaldevelopment projects

Actions• Support the establishment of in-house

technology expertise in small wind atU.S. AID, the World Bank, U.N.Development Program, and other multilat-eral development programs.

• Develop effective response to foreigntied-aid competition.

• Promote easier and more effective exportfinance programs.

• Educate Congress and the public on theimportance of spending on foreign aidassistance.

• Encourage World Bank to make renew-able purchase decisions based on leastcost instead of defaulting to PV.

Long-Term (11+ Years)Market Goals and Actions

Stimulate the micro-power revolution

Action• Develop a strategy with outreach materi-

als to address the micro-power market.

Near-Term (0–3 Years)Policy Goals and Actions

Supportive national policies topromote market development

Action• Create supportive national policies (tax

credits, regulations).

Supportive state policies to promotemarket development

Actions• Promote creation of state incentive pro-

grams that reduce first costs (e.g.-rebates).

• Develop a Web-based performance pre-diction capability based on high-defini-tion wind resource maps.

Mid-Term (4–10 Years)Market Goals and Actions

Improved definition of the market tobe used for business planning

Actions• Update the 1981 A.D. Little market study

for small wind turbines in the UnitedStates.

• Characterize the export potential of U.S.technology.

Increased customer options for purchase and financing of small wind turbines

Actions• Expand availability of plug-and-play

systems suitable for mass marketing.• Establish consumer-friendly customer

financing programs, like those availablefor car buyers.

Increased number of products avail-able (models and size range) for different market segments

Actions• Support company in-house product devel-

opment projects.• Encourage state support for small wind

turbine product development.• Encourage greater investment in the

small wind turbine industry.

Incorporation of environmental bene-fits into the value of wind turbines

Action• Support development of effective green

tags market for distributed generations.

Increased outreach and education onsmall wind turbines

Actions• Develop state-specific consumer guides

for small wind turbines.• Develop a guide on wind power for

school programs.

ACTION PLAN

28

ACTION PLAN

29

• Promote creation of state incentives thatstimulate electricity production (e.g., setup incentives that increase with towerheight.)12

Removal of systemic height restrictionsnormally found in residential locations

Actions• Provide information encouraging elimina-

tion of height restrictions to local govern-ments and bodies making such regula-tions.

• Circulate model regulation regarding per-missive zoning for small wind turbines.

• Promote state and national legislationthat can override local restrictions.

More information to address aesthetic, noise, and environmental concerns

Actions• Create a credible white paper on avian

issues for small wind turbines.• Develop technology to reduce noise.• Develop building permit reference materi-

als relating to aesthetics, noise, environ-mental impacts, property values, etc.

• Develop videos to highlight the visualnon-intrusiveness of small wind turbines.

• Develop a voluntary contributionprogram to remove obsolete andorphaned wind turbines.

Removal of interconnection barriers

Actions• Provide information to utilities and public

utility commissions that will help removeunnecessary and expensive requirementsin the areas of power quality, safety, andperformance standards.

• Participate in development of a nationalinterconnection standard.

Equitable utility billing and intercon-nection cost policies

Actions• Promote net metering.• Promote simplified interconnection

contracts.

• Promote protection against unwarrantedinsurance requirements.

• Provide expert testimony at rate hearings.

Credit for green attributes

Action• Discuss the environmental benefits of

small wind, including the green attributes.

Reduction or elimination of disincentives to investment in small wind turbines

Action• Address disincentives to investment in

small wind turbines (tax code, salestaxes, property taxes, etc).

Mid-Term (4–10 Years)Policy Goals and Actions

Support state policies for small windincentives

Action• Continue to work with states to develop

new policies

Disseminate information on marketbarriers

Action• Streamline information on zoning regula-

tions, interconnection agreements, andnet metering to guide development ofstate incentives.

• Develop streamlined interconnectionrequirements

Long-Term (11+ Years)Policy Goals and Actions

Develop strategies to deliver high-levelelectric service to rural customers

Action• Work with rural electric cooperatives

to devise incentives for rural customersand to streamline the interconnectionprocess.

12 Action suggested by M. Sagrillo.

benefit charges assessed to retail electricitysales. Funds generated by these systembenefit charges can be designated by legis-latures to subsidize renewable energy proj-ects and promote industry development.

In 2002, four states offered these rebateincentives for small wind turbines:California, Illinois, Rhode Island, and NewJersey. The requirements for specific turbinesare determined on a state-by-state basis,and typically these incentives are only forsmall turbines that are connected to thegrid. Other states offer tax credits, sales orproperty tax incentives, and net meteringfor small turbine owners.

The various stimulus packages are shown inthe map of state incentives presented inFigure 3. As the number of states offeringstimulus packages for small turbines in-creases, there will be further sustainedorderly development of the market.

In order to meet the market goals of theAWEA Small Wind Turbine Committee,more incentives are needed. An additionaltwo or three states per year need to imple-ment stimulus programs for small wind tur-bines over the next six to ten years. It isalso critically important that the federal gov-ernment does its share with a significant(25 to 40%) tax credit or rebate program.

Research, Development, and DemonstrationFederal, and to a lesser extent, state R&Dprograms need to provide greater resourcesfor small wind turbine technology develop-ment, and the industry must continue todevote significant resources to productdevelopment. The DOE research programon wind energy cannot be effective if it con-centrates solely on long-range, high-riskR&D. Instead, the federal R&D programmust support development of advancedproducts and components and attack othercost drivers such as technology for manufac-turing and installation, outreach for con-sumer education, support for policy andmarket transformation, and work on genericbasic technology.

DOE now has a wind energy R&D budgetof about $40 million, of which about $3million, or 8%, is spent on programs to

All emerging industries and products havefaced this basic "chicken and egg"dilemma. Some never made it over thehump and eventually faded from the market-place. Some got over the hump by virtue ofmassive corporate investment (in R&D andforward pricing), and others made it intothe mainstream by steadily improving costand functionality. The small wind industry iscomposed of innovative, small, strugglingfirms that lack the resources to developmass-production designs and build largefactories in anticipation of quantum increas-es in sales. Steady improvement is the mostlikely route for firms offering small wind tur-bines. In Washington, this is sometimesreferred to as sustained orderly develop-ment.

Sustained orderly development is the recog-nition that there are not likely to be "silverbullets" that will radically transform theglide slope of market penetration for smallwind turbines. Steady improvements in theproducts and sustained public sectorsupport offer the best hope of delivering theindustry’s vision of a "new home appli-ance" and making small wind turbines anotable contributor to our national energysupply. Although economics are a barrier,the exciting thing about residential andsmall business markets is that once thenumbers work for one home, they work for10,000 homes. This gives the small windturbine industry explosive growth potential.

Public PolicyA primary element of sustained orderlydevelopment for small wind turbine technol-ogy is related to public policy. Smart subsi-dies, which enable customers to tunnelthrough the cost barriers, are criticallyimportant in aggregating demand. Federaland state subsidies and incentives need todovetail for a total package that providesenough stimulus to move the market.Removing institutional market barriers, suchas tower height restrictions and undue inter-connection costs, is also an important partof the recipe.

In addition to efforts by the U.S. govern-ment, some states have good policy envi-ronments for small wind turbines. Many ofthese states offer rebate or buy-down pro-grams that are typically funded with system

THE STRATEGY

“Many more peoplewould buy small windsystems if they werecheaper. But, we can’tmake them cheaperunless many morepeople buy them.”

David Blittersdorf, President, AWEA.

30

31

develop small wind turbines. As technologyfor large wind turbines "graduates" andrequires less public sector support for thenext few years, spending on small windtechnology should significantly increase.

Small Wind Turbine IndustryThe small turbine industry must be open tonew entrants and should not foreclose anyinvestment options. Private capital willremain the cornerstone of the substantialinvestments that will be necessary if this isto become a billion-dollar industry.Likewise, the industry should pursue allviable market diffusion models, from full-service dealerships to "big box" chainstores to "Dell-like" direct sales programs.

Cooperative StrategyThe members of the industry will continueto develop products and processes to meet

market demand. DOE, national laborato-ries, test centers, and universities will workwith industry partners to conduct basic andapplied research, development, and testingto improve small wind technology.Organizations representing utilities, stan-dards-making bodies, regulatory agencies,and every level of government will partici-pate in market and policy actions toremove barriers. Consumers will expresstheir will by seeking out this environmental-ly friendly technology in spite of the barri-ers that still exist.

To address policy barriers, industry andgovernment entities work together topropose, review, advocate, and help imple-ment policies that support development ofsmall wind technology while safeguarding

THE STRATEGY

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 toeducate the general public on wind energy and its uses. The general public hasspecifically requested information on small wind turbines at various state workshopsbeing organized under WPA. This grassroots level of interest stems from manysources, such as the desire for independence from the utility grid, the urge to reapthe 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 thedesire to use a renewable technology that is cost competitive over the life of thesmall wind turbine. Further, the agricultural community has historically used windenergy and may be more comfortable with small wind turbines.

Under the WPA activities, members of the AWEA Small Wind Turbine Committeewere asked to rank the states from high to low priority for focused WPA small turbineactivities. Not only were the states ranked, but the specific state activities were ratedas 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 theeconomics of a small turbine system; and the development of better wind resourceassessment maps.

The top 14 states designated by the AWEA Small Wind Turbine Committee havebeen targeted for the state-specific activities listed above. The targeted states areCalifornia, 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.

THE STRATEGY

32

the public interest. The industry alsolobbies at the national, state, and locallevel for policies that remove barriers andcompensate for subsidies to other energytechnologies.

The following tables summarize wide-ranging discussions of the AWEA SmallWind Turbine Committee about the timingof actions to overcome barriers and reachthe goals described in this roadmap.

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

Technology Actions Market Actions Policy Actions

Near-Term(0-3 years)

Mid-Term(4-10 years)

Long-Term(11 + Years)

Crosscutting(Ongoing)

- Develop nationally recognizedstandards for participation in stimu-lus programs

- Publish SWT articles in corner-stone magazines such as ScientificAmerican, to create more "SWTbuzz"

- Revise new U.S. wind maps forSWT, 30 m hub height and .25shear, new legends

- Explain turbine micrositing - Provide information to remove mis-

conceptions about the windresource

- Incorporate the value of environ-mental attributes of small wind intoelectricity prices

- Reduce costs by new turbinedevelopment activity for low windspeed sites and new componentdevelopment for SWT

- Research reliability concerns suchas lightning, corrosion, bearinglubrication, alternator winding insu-lation, electronics

- Continue focused long-termresearch unique to SWT - furling,durability, blade aerodynamics,noise, and power electronics

- Develop packages with other dis-tributed generation and storagetechnologies

- Work to improve the reliability andreduce the cost of power electronics

- Work to eliminate noise from smallturbine designs

- Develop consumer-friendly performance predictions

- Improve analytical design tools- Continue the development of pack-

ages with other distributed genera-tion and storage technologies

- Continually work to reduce costand improve reliability


- Develop a strategy to work withstate policies for inclusion of smallwind

- Develop a national policy for anSWT tax credit

- Work to eliminate zoning restrictions

- Develop model zoning ordinancesand blueprint templates of zoningregulations, interconnection agree-ments, and other policies

- Work to reduce excessive interconnection requirements



- Update national market study - Characterize the export potential for

U.S. manufacturers and work withmultilateral development programs

- Establish consumer-friendly cus-tomer financing programs, includinglease options

- Increase the number of productsavailable (models and size range)for different market segments

- Increase outreach and education

- Influence/develop new state andnational incentives

- Disseminate and expand informa-tion on zoning regulations, intercon-nection agreements, and net meter-ing rules

- Develop a more consumer-friendlynational interconnection standard

- Stimulate the emerging micro-powerrevolution, of which SWTs are part

- Develop hydrogen-based systems- Develop blackout protection

strategies- Establish links with storage and

other power technologies

- Develop policies to help deliverhigher service levels to rural cus-tomers

THE STRATEGY

33

Table 7: Research Priorities Identified

Research Area Continuing Research Future Research

Reduce cost

Reduce manufacturing costs

Improve reliability

Power electronics

Reduction of noise

Better analytical tools

Improve overspeed control knowledge - Expand analytical tools to handle furling, stall/furling

- Wind/economic prediction- Aeroelastic models with furling

- Understand aeroacoustic phenomena- Noise measurement standard

- Reduce cost and improve reliability of power electronics

- Develop optimized converter technology

- Develop improved turbine standards- Gather multi-year turbine data- Research topics w/reliability impact

- Develop tailored, efficient manufacturing plans- Equipment and processes for mass production

- Low-cost robust rotors with advanced airfoils- Low-cost, very tall towers- Turbine optimized for low wind speed

- Larger small turbine development (50–100 kW)- Improve performance and efficiency

- Recyclability- Coating equipment

- Design test methodology for “extreme events”

- Develop power electronics design for integrating powerand storage technologies and improving overall systemenergy efficiencies

- Design strategies to reduce noise

- Integrated design tool

- Develop design tool based on improved aerodynamicdata

Distributed generation applications - Control strategies to combine power and storagesources

- Control strategies to combine power and heat appli-cations

- Real-time optimization for electricity, heat, and second-ary uses

3. Energy Information Agency, AnnualEnergy Review 1998. GovernmentPrinting Office: Washington, D.C.,DOE/EIA-0384(98), 1998.

4. U.S. Census Bureau, AmericanHousing Survey, Owner-occupied,1991-1997. Government PrintingOffice: Washington, D.C., 1998.

1. Bergey, Mike, "The Sleeping Giant:The Role of Small Wind in America’sEnergy Future,"in Proceedings ofWindpower 2001. American WindEnergy Association: Washington,D.C., June 7, 2001.

2. Arthur D. Little, Inc., Near-Term High-Potential Counties for SWECS. SolarEnergy Research Institute: Golden,CO, BE-9-8282, 1981.

34

ENDNOTES

NOTES

35

NOTES

36

APPENDIX-DETAILED LIST OF STATE INCENTIVES 1S

TAT

E

IncentivesIncentives Specificallyfor Small Wind

Type and Amount ofFunding

Length ofProgram

Net Metering

% - ruralland/total landarea

AL

AS

KA Power Project Revolving

Loan Fund State LoanProgram: interest rate tiedto municipal bonds.

Loan termrelated tothe life ofproject.

N/A 96

AR

IZO

NA

Personal tax credit 25% of the cost of a renew-able system, up to $1,000,may be carried forward up tofive years

97

Sales tax exemption forequipment Up to a $5,000 deduction.

Tucson Electric Power:wind < or equal to 100 kwNEG based on fixed sea-sonal rates Arizona PublicService: wind < or equalto 10 kw NEG based onavoided cost

AR

KA

NS

AS

Small wind: agricultural orcommercial: < or equal to100 kW, residential: < orequal to 25 kW ArkansasPublic ServiceCommission to establishrates, terms and conditions

96

CA

LIF

OR

NIA

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

Max capacity of 1 MW;annualized calculation;credit for NEG is basedon either baseline/over-baselines rates, or ontime of use rates, and iscarried over month tomonth; any NEG at theend of annual period iscredited to the utilitywithout compensation tothe customer-generator.

93

Energy Innovations SmallGrant (EISG) Program."Intended to determine thefeasibility of energy tech-nology and science innova-tions for new energy con-cepts whose feasibility arenot yet established."

Public Benefits Fund:Renewable Energy TrustFund

$70.2 million for existing windprojects ($/kWh credit); $162million for new renewableprojects, which must beinstalled by the end of 2001($/kWh); $54 million foremerging technologies 10 kWor less for wind (buydown).

Expires in2012

$62.5 million/year

$2 to $2.5 million per year;$75,000 per project.

Expires in2012

ExpiresSeptember2002.

STATE INCENTIVES2

Incentives

STA

TE Incentives Specifically

for Small Wind Type and Amount ofFunding

Length ofProgram

Net Metering % - ruralland/totalland area

CO

LO

RA

DO

Max capacity: 10 kW;NEG carried from monthto month, and granted tothe utility at the end of theannual period. PSCo cus-tomers only.

CO

NN

EC

TIC

UT

Public benefits fund.Must be a direct econom-ic benefit to the state ofConnecticut. Available inthe form of grants, director equity investments,contracts or other actionswhich support research,development, manufac-ture, commercialization,deployment and installa-tion of renewable energytechnologies.

$118 million over fiveyears-- renewable energyinvestment fund

Enacted inApril 1998

11.6% (3.1total) 3,282k

Net metering rules, regu-lations, and conditions tobe decided by theDepartment of PublicUtility Control.

IDA

HO

40% income tax reduc-tionin the year of installa-tion, and 20% each yearfor the next 3 years.Maximum deduction of$5,000 in any one year.

"Low Interest Loans forRenewable EnergyResource Program: resi-dential loans from $1,000to $10,000, and commer-cial loans from $1,000 to$100,000, both at a 4%interest rate, to be repaidin 5 years or less.Several restrictions canbe viewed at:http://www.idwr.state.id.us/energy/Financial/loanr.htm

Only customers of IdahoPower Company(although all utility compa-nies have the opportunityto pass a net meteringtariff because of a PUCorder); all technologiesunder 100 kW eligible.

STATE INCENTIVES 3

Amount varies.Property tax exemption.Municipalities are giventhe opportunity to adoptthe exemption by thestate.

ILL

INO

ISIO

WA

STA

TE

IncentivesIncentives Specificallyfor Small Wind


Length ofProgram


Special property taxassessment.

Public benefits program:Renewable EnergyResources Trust Fund.Grants, loans, and otherincentives available.

Alternative Energy BondFund Program: notapplicable to residentialprojects.

Renewable EnergyResources ProgramGrants

Public benefits program:Clean EnergyCommunity Trust(CECT). Grants, loans,venture capital support,and other financialincentives available.Must demonstratebenefit to Illinois envi-ronment or economy.

Rebates available forsmall systems; grantsavailable for large.

Expected to produce$100 million/year forthe ten year length,50% of which goes tothe Renewable Energyportion of the fund.

10 yearprogram, toend in 2007

Small wind < or equal to 40kW NEG avoided costCommonwealth Edison onlyProperty tax exemptionMaybe $ in ComEd settlementfund

91

$200 to $225 millionfor efficiency andrenewables.

Alternative Energy LoanProgram. 0% interestloans for up to half ofthe project cost up to amaximum of $250,000.

Opportunity for localgovernment to assesswind turbines at aspecial valuation forproperty tax purposes.

97

Sales tax exemption

Small wind (< 10 kW), iseligible for 10% of theavailable funds, while bigwind (> 10 kW) is eligiblefor 20% of the funds.

Depends. In 1996,$1.8 million per yearwas allocated for theyears 1997-1999.

Wind energy equip-ment and all materialsused to manufacture,install, or constructwind energy systems100% exempt.

Net metering law in dispute;however, currently NEG pur-chased at avoided cost. Otherdetails unknown.

STATE INCENTIVES4S

TAT

E

IncentivesIncentives Specifically forSmall Wind


Length ofProgram


KA

NS

AS

Property tax exemption

Renewable Energy GrantProgram

About $400,000--$500,000 per year.Typical award from$10,000--$50,000; maxlimit of award: $50,000.

Net metering law under con-sideration: Senate Bill 299,introduced in February 2001;not yet signed into law.

98

LA None None None 87

MA

SS

AC

HU

SE

TT

S

Property tax exemption.

Renewable Energy TrustFund.

Alternative Energy PatentDevelopment: Corporate andpersonal.

State sales tax exemption.Applicable to residentialsystems only.

State income tax credit.

Solar and Wind SystemDeduction. Includes costsincurred from installing theunit. Aplies only to commer-cial and industrial projects.

Will focus on large windfarms. Plans to put $ onresource assessmentDG - "Still, limited aware-ness among potential con-sumers, lack of technicaland financial information,and problems providingfinancing to consumershamper wide scale com-mercialization...."

$150 million over a fiveyear period; approximate-ly $20 million per year foran undefined periodbeyond 2002.

Allows income tax deduc-tions for any incomereceived from the sale ofor royalty income from apatent that is deemedbeneficial for energy con-servation or alternativeenergy development.May be used for 5 yearsafter it is granted.

100% exemption fromthe sales tax on a windsystem and all relatedequipment.

15% credit against thestate income tax for thecost of a renewableenergy system (includinginstallation) installed onan individual’s primaryresidence. Max limit of$1,000; can be carriedover from first year.

100% exemption.

Exemption from the cor-porate excise tax for thelength of their deprecia-tion period.

Allowablefor aperiod of20 yearsafterinstalla-tion.

Enactedin 1977

QFs < or equal to 60 kWMonthly NEG avoided costAll utilities

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STATE INCENTIVES 5M

INN

ES

OTA

STA

TE

Incentives Incentives Specificallyfor Small Wind


Length ofProgram

Net Metering

% - ruralland/total landarea

Wind and Solar EquipmentSales Tax Exemption.

Wind and PhotovoltaicSystems Exemption.Excludes value added toproperty value by a renew-able energy system fromproperty taxes.

Value-Added Stock LoanParticipation Program.Interest rate subsidized byRFA, generally to about4%.

Wind Energy GenerationGrants. Available on a firstcome, first serve basis untilnew wind capacitystatewide totals 100 MW.

Ability to create wind ease-ments (voluntary con-tracts), which protectaccess to wind for a windenergy system.

Minnesota AgriculturalImprovement LoanProgram - specifically forsmall wind.

Up to 45% of loan, upto $100,000 of loanprincipal for up to 10years.

Enactedin 1995

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For the purpose oftaxes,easements maydecrease property value,but not increase it.

1.5 cents/kWh paid forsystems < 2 MW forten years (paymentscan go past the 2005expiration).

Systems < 2 MW are100% exempt, whilesystems > 2 MW are91% exempt.

Up to 45% of loan, upto $24,000 of loan prin-cipal for up to 8 years.

Enactedin 1994and up forrenewal in1997.Unclearwhether itwasrenewed.

Enactedin 1992

Expired?

Enactedin July1997,expiresJanuary 1,2005.

Establish-ed in 1983

Enactedin 1978

Max capacity of 40 kWApplies to IOUs, municipals,and rural cooperatives NEGpurchased at average retailrate (total annual classrevenue from sales of elec-tricity minus the annualrevenue resulting from fixedcharges, divided by theannual class kWh sales)

MIS

SO

UR

I

Low-Cost Efficiency LoanFunds. Available only topublic schools (K-12) andlocal governments.

Loans are determinedon an individual projectbasis, with fixed inter-est rates below marketlevel.

Enactedin 1991

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STATE INCENTIVES6

MO

NTA

NA

STA

TE



Length ofProgram Net Metering

% - ruralland/totalland area

Commercial or NetMetering SystemInvestment Credit --Alternative EnergySystems. $5,000minimum investment.Excess after the first yearcan be carried over for 7years.

35% tax credit for manu-facturing plants producingalternative energy gener-ating equipment, a busi-ness facility with a renew-able energy system, oralternative energy gener-ating equipment.

Property tax exemption.Exempts value added byrenewable energy systemto property value fromproperty taxes.

Ability to create windeasements, which protectaccess to wind for a windenergy system.

Applies to systems withup to a $20,000 value fora single-family dwelling;up to $100,000 value fora multi-family residentialdwelling or a nonresiden-tial structure.

Enacted inMay 2001.

Exemptionmay beclaimedfor up to10 yearsafterinstalla-tion.

Enacted in1983

99

Alternative EnergyRevolving Loan Account.Applicable for residentialand commercial cus-tomers for the purpose ofbuilding alternativeenergy systems to gener-ate energy for their ownuse and for net metering.

Small wind < or equal to 50kW Annual NEG credited tofollowing months, and atthe end of annual period isgranted to utility Applies toall utilities

NE

BR

AS

KA

Low Interest LoanProgram for EnergyEfficiency. To secure aloan, approach your ownfinancial institution, whichwill then approve theproject on financial terms.The Energy Office is thencontacted by the financialinstitution, which thenbuys half of the loan at0% interest so that thetotal interest on the loan"from the borrower’s per-spective" will be half themarket rate obtainedthrough their privatelending institution.

99

Creation of wind ease-ments allowed.

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STATE INCENTIVES 7N

EW

JE

RS

EY

STA

TE





Full sales tax exemption forsolar and wind energysystems.

New Jersey Clean EnergyProgram: State rebateprogram. Medium systems(>10-100kW) receive a$4/watt rebate; largersystems (>100 kW) receivea $3/watt rebate. Systemsproducing more energythan needed by the renew-able energy system ownerare not eligible.

Full exemption from6% sales tax.

Expired in2000.New legis-lation?

65

Small Systems (<10kW),receive a $5/watt rebate, todecrease over time asmore energy systems areadded. Rebates availableup to 60% of system costs.

$358 million over thenext three years (2001-2003), 25% of whichwill support class Irenewables (the other75% goes to energyefficiency).

Max capacity: 100 kWNEG credited to the fol-lowing month and pur-chased by the utility at theend of the billing period atavoided cost.

NE

W M

EX

ICO

System benefits chargePublic benefits fund: sup-ports the use of renewableenergy for school districts,cities, towns, villages, andcounties.

Up to $4 million avail-able.

Enactedin 2000

58.9% (77.7total) 1,740k

Enactedin 1998

Renewables < or equal to10 kW NEG carriedforward month to month,or paid at avoided cost bythe utility Utility chooseswhich method for credit.All utilities

NE

VAD

A

Property tax exemption Any value added bythe renewable energysystem is subtractedfrom total propertyvalue for tax reasons.

Appliesfor allyears fol-lowinginstalla-tion.

10 kW or less. Limit of100 customer-generatorsfor each IOU. Customercan choose to have NEGcredited toward the nextmonth's bill. Utilities arenot required to payavoided cost for NEG.

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STATE INCENTIVES8

NE

W Y

OR

KS

TAT

E





Renewables R&D GrantProgram. Provides fundsfor projects focusing onproduct and technologydevelopment, rather thaninstallation of renewableenergy systems.

Public Benefits Fund.

Annual funds averagearound $2 million.Funds up to 50% ofproject (generally pro-viding between$10,000 and $200,000per project).

$150 million annually. ExpiresJune 30,2006.

85

New York Energy$mart(SM) Loan. Anycommercial, industrial,retail, agricultural, non-profit, or multifamily facilityis eligible for this program.Must be customer of one of6 IOU's in NY.

Interest rates reducedby 4.5%.

5 yearterm.

High Value PV and Windsolicitation $1.3M - spring2000 (net metering lawnot applicable to wind)

NO

RT

H D

AK

OTA

Income tax credit

Large wind sales taxexemption (100 kW orlarger).

Large Wind Property TaxIncentive (100 kW orlarger).

Geothermal, Solar, andWind Property Exemption

3%/ year for five yearsfor the cost of equip-ment and installation(5% if installed beforeJanuary 1, 2001).

Construction mustbegin before January1, 2011.

70% reduction in prop-erty taxes

Up to 100 kW; nostatewide limit of netmetering capacity; NEGmust be purchased atavoided cost.

Five yearperiod fol-lowinginstalla-tion.

Construction mustbeginbeforeJanuary 1,2011.

97

OK

LA

HO

MA

IOU's and rural coopera-tives under theCommission's jurisdictionare required to file netmetering tariffs for cus-tomer-generators. 100kW or less. No state-widelimit. Customers mayrequest that utilities pur-chase NEG, but utilitiesare not required to do so.

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STATE INCENTIVES 9S

TAT

E





OR

EG

ON

Small Scale Energy LoanProgram (SELP). Energysavings must be able topay majority/all of loan;applies tocommercial/industrial andmunicipal/schools proj-ects.

Property tax exemption.Added value of renew-able energy system shallnot be included whenevaluating the propertyfor tax purposes.

Business Energy TaxCredit ("Betsy"). Mustreplace at least 10percent of the electricity,gas or oil used; max. limitof $10,000,000 perproject. Only applies tobusinesses!

Residential Energy TaxCredit. Equipment,installation, and intercon-nection costs are applicable.

Public Benefits Fund.

100% exemption. Expires in2012

98

35% tax credit over 5years

Enacted in1980

60 cents credit/ estimat-ed kWh to be produced,up to $1,500 in the firstyear .

Enacted in1978

Amount varies. Enacted in1981

$8.7 million/year

Municipal and localauthorities may establishwind access laws.

Public Benefits Fund.Created for the purposeof promoting the develop-ment and use of renew-able energy

PE

NN

SY

LVA

NIA

Small wind < or equal to25 kW Annual NEG carriedmonth to month or creditedat avoided cost At end ofannual period, NEGgranted to utility for use inlow income programApplies to all utilities

Low-income renewableenergy pilot programs

Varies according toutility.

Provide renewableenergy system todecrease electricitycosts.

10 kW or less. NEG cred-ited at the end of eachmonth to utility.

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STATE INCENTIVES10

RH

OD

E IS

LA

ND

STA

TE





Sales tax credit.

Public benefits fund.

Personal Tax Credit.Based on maximumsystem cost of $15,000.

Property tax exemption.Renewable energysystems cannot beassessed at more than thevalue of a conventionalheating, hot water, or otherenergy production system.

Approximately $3 millionover 5 years?

Beginning with 25% in2000, but declining by5% every year until2004.

Refund of any tax paid. Expires12/2004

Expires12/2004

2000-2004

Programreviewedin August2001.

PUC order of 1988; requiresIOU's to provide net meter-ing contracts; max of 25 kWor less; NEG at end ofmonth credited to followingmonth; NEG at end ofannual period credited toIOU.

43

SO

UT

H D

AK

OTA

Property tax exemption.May be taken for 3 yearsafter installation; is notapplicable to energysystems that produceenergy for resale.

Exempts entireassessed value of resi-dential systems fromproperty tax, and 50%installed cost of com-mercial systems.

98

TE

XA

S

Property tax exemption. Exempts 100% of thevalue added by arenewable energysystem to the assessedproperty value.

Enacted in1985

PUC Ruling. 50 kW max;NEG purchased by utility atavoided cost at the end ofthe billing cycle.

96

UTA

H

Corporate tax credit.

Personal Tax Credit.

10% of the cost ofinstallation, up to$50,000.

25% of the cost ofinstallation, up to$2,000.

ApplicableJanuary 1,2001,throughDecember31, 2006.

ExpiresDecember31, 2006.

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STATE INCENTIVES 11S

TAT

E

IncentivesIncentivesSpecifically forSmall Wind


Length ofProgram


WA

SH

ING

TON

High Technology ProductManufacturers Excise TaxExemption

"Washington State UniversityEnergy Program: assistance infinding solutions to energy prob-lems that utilize renewableenergy, including: technicalassistance, education, work-shops, field assistance anduser-centered solutions.http://www.energy.wsu.ed

Sales and use tax exemption.Must have at least 200 wattgenerating capacity.

100% exemption fromexcise tax.

100% exemption fromsales tax.

ExpiresJune 30,2009.

Expires in2004.

94

Max capacity: 25 kW; NEG atthe end of each month is cred-ited to the following month'sbill; NEG at the end of theannual billing period is grantedto the utility with no compensa-tion to customer-generator.

WIS

CO

NS

IN

Demand Side Applications ofRenewable Energy (DSARE);only for WI northeastern 23counties.

Property tax exemption. "Doesnot include equipment or com-ponents that would be presentas part of a conventional energysystem or a system that oper-ates without mechanicalmeans."

"Renewable Energy AssistanceProgram (REAP): applies torenewable energy systemsincorporated into constructionprojects; half of grant availableat purchase of equipment, theother half given upon comple-tion of project; available to busi-nesses, municipalities, and non-profit organizations.

Public benefits fund. Stateawards grants for low income,energy efficiency and renewableenergy services.

Opportunity to apply for permitsthat guarantee wind access.

Exempts 100% of thevalue added by a renew-able energy system tothe assessed propertyvalue.

10% to 20% of a project,up to $75,000.

Approximately $3.8million to fund renew-able projects.

To be re-evaluatedafter 2005.

$1.25 million.

All technologies < or equal to20 kW Monthly NEG pur-chased at retail for renewableenergy systems only (non-renewable generated energypurchased at avoided cost).

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STATE INCENTIVES12

WY

OM

ING

STA

TE





Max capacity: 25 kW;NEG at the end of eachmonth can be credited orcompensated to the billfor the following month;NEG at the end of eachyear shall be sold to utilityat avoided cost.

99

"This table was created based upon a report ""Looking Outside - Lessons Learned from Renewable Energy Funds inOther States or Regions"" written by Ryan Wiser and Kevin Porter. The net metering column information was found onthe Green Power Network - Net Metering, http://www.eren.doe.gov/greenpower/netmetering, latest revision July2001. Other information on state tax, property tax and loans was found onhttp://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 theStatistical Abstract of the United States, 1987

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the u.s. small wind turbine industry roadmap

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