1. Overcoming Wind Energy Project Financing Obstacles
Amanda James
1. Holding Companies: Determining the Best Structure
Developing a wind project requires making careful decisions about how to set up
the legal structure of the business itself. The formation of the new business will
determine who holds title to project assets, the tax implications, the amount of risk for
liability each investor assumes for debt and business actions, and the project’s eligibility
for incentive programs. There are several business entities that can be used for wind
development projects and each has its own legal and financial qualities. Getting a wind
facility up and running is no small task, in choosing which holding company to use,
consider the following elements.1
Personal Liability of Owners
Consider whether the entity will shield investors and owners from personal
liability for business obligations and debts. An entity with a liability shield means that a
creditor’s recourse is limited to the wind project assets and associated revenues.
Generally, the liability shield also covers any legally enforceable claim for money related
to the operations, such as a money judgment from a lawsuit against the project.2
How Taxes Are Assessed
Consider how income and losses of the business entity will be taxed. Different
forms of business entities can receive different tax treatment for income. Some
businesses are taxed on the income separate from the entity’s owners and the investors
1 Jessica A. Shoemaker, Farmers’ Guide to Wind Energy 10-2 (Karen R. Krub ed., Farmers’ Legal Action
Group, Inc. 2007). [hereinafter Shoemaker, Farmers’ Guide]. For more information about these and other
factors to consider when choosing a form of business entity, Farmers’ Legal Action Group, Inc. (FLAG)
has produced a Choice of Business Entity booklet as part of its Farm to Market: Legal Issues for Minnesota
Farmers Starting a Processing or Marketing Business series. Although these materials were not written
with a wind project in mind, they contain general information that could be useful. For a copy see FLAG’s
website at www.flaginc.org.
2 See Shoemaker, Farmers’ Guide at 10-2, 3.

2. are taxed on income distributions from the business. Some businesses do not pay taxes
on the entity’s income, but rather the income passes through business directly to its
owners and each owner pays tax on his share of the entity’s income.3
Complexity of Formation and Operation Requirements
Consider how the business will be governed and controlled. Some entity types
are more formal than others and have regular reporting requirements while others simply
require engagement in business activities with the intent of acting for the business
interest. Governance and control of an entity can be by direct owner vote, or it can entail
a complicated structure with a board of directors, officers and shareholders. Consider
whether the entity should require annual shareholder meetings, board of director
meetings, formal record of certain actions as in the case of a Corporation, or consider if
the entity should have more flexibility such as that common to Partnership management.4
Impact on Wind Incentives and Other Regulatory Restrictions
Eligibility for some government wind incentives may depend on the
characteristics of the individual owners and the investor’s tax appetite for taking
advantage of the various tax credits. The entity type could also implicate more
compliance burdens such as state and federal securities regulations if investors are
solicited to infuse capital in the project.5
Typical types of business entities for commercial scale wind projects include
General Partnership, Limited Liability Partnership, Limited Partnership, Limited Liability
Company or Cooperative entities.6
2. Crafting Project Agreements That Assure Investors
Purchase Power Agreements (PPA)
3 See id. at 10-3.
4 See id. at 10-4.
5Id.
6 See id. at 10-5

3. To make a project financeable, it is critical to find a willing utility purchaser to
negotiate and contract for a long-term (10-30 year) power purchase agreement. A lender
will not secure financing if the credit worthiness of the power purchaser is not investment
grade. Municipalities and utilities are examples of credit worthy off-takers/ energy
buyers.
The details of the Purchase Power Agreements (PPA) are often very important in
determining whether or not a project is economically viable. It is the core document for
obtaining financing because it provides the terms for a predictable revenue stream from
the energy output associated with the project. The wind facility owner agrees to make
available up to a certain amount of electric generation capacity by a certain date and for a
certain time period and a third party purchaser, usually a utility, agrees to pay for both the
capacity available to it and for the energy dispatched.
One of a PPA’s most important terms is the price to be paid for wind energy
produced and how the price will be paid over the life of the contract. It could stay flat or
escalate over time.7 It is essential to define what is being purchased, meaning the energy
produced has a value but the Renewable Energy Credits associated with that energy may
also be purchased for a certain value. Most PPAs include a development timeline and
schedule milestones such as when financing will be obtained and when turbines will be
ordered, and may even require the project developer to give the power purchaser regular
status reports on progress.8 Milestones should match construction and supply contracts.
The seller is responsible for obtaining permits, financing, constructing the system,
interconnecting, obtaining incentives, etc. Liquidated damages are included for delays in
milestones.
A PPA spells out the effective date the agreement takes effect and the duration of
the agreement and may include a renewal option.9 The duration of the PPA term must be
longer than the financing terms as the debt repayment will be scheduled over a period of
7 See id. at 9-11.
8 Id. at 9-12.
9 Id.

4. time and it is important to ensure a source of revenue over that period to allow for
reliable payment. The PPA must also match any land lease and easement terms.
The output from the energy project will be estimated in the PPA.10 The seller
predicts how much energy the project will produce over the life of the agreement. It is
key that the minimum production commitments and delivery requirements match the
technical capabilities of the facility. This output is measured on a rolling average basis,
typically over twenty-four months and often capped as a percent of the contract. A PPA
typically will specify what the damages will be in case of failure to meet the output
commitment, how damages are measured, and to what extent it justifies termination of
the agreement.
A PPA must explicitly set forth the point of delivery and clearly describe how and
where it is measured.11 The contract usually requires the developer to deliver the
generation to a specific point at which the sale occurs. If the delivery point is a long
distance from the wind facility, the developer will need transmission service to the point
of delivery. Transmission costs can be very high and may implicate wheeling
regulations, so it is important the PPA is clear about these arrangements.
A PPP will usually list events that constitute “default” of the agreement. This
might include failure to make scheduled payments or delay in meeting milestones on the
development timeline. The PPA should indicate the cure periods, which are generally
more flexible for non-payment defaults, and the rights and remedies to the non-defaulting
party. The PPA will include a default provision about lender’s cure rights that requires
notice of default, consent to collateral assignment, and rights to take over the project.
The PPA must provide provisions which allow the project owner to assign the owner’s
rights under the contract as security for the project debt and allow the lender to cure
defaults and perform the owner’s obligations under the PPA.12
10 Id. at 9-13.
11 Id.
12 Id.

5. Termination rights should be set out in the PPA to allow for either party to
terminate under certain circumstances. Termination damages might be included as a
certain amount per year as some measure of lost present value of the revenue stream.13
Risk allocation is essential for any PPA. Curtailment refers to a reduction of
output delivery that results from a choice or action by either the project owner or the
energy buyer. Compensation to one party for the other’s curtailment should be limited to
specific events, such as system constraints, unscheduled outages and repairs, emergency,
scheduled outages, force majure and seller action. Liability should also be capped in the
PPA.
Other Key Project Agreements
Other key project agreements to secure include Engineering Services Agreements,
Procurement and Construction Contracts, Interconnection Agreements, Balance of Plant
Contracts, Turbine Supply Agreements, Operation and Maintenance Agreements,
Warranty Agreements, Corporate Guaranties and Letters of Credit.
The Turbine Supply Agreement represents the largest investment and it is
important to evaluate the supplier’s creditworthiness and explicitly state how payment
will be made and where delivery is made. Some turbine suppliers require upfront
payment or a notice to proceed payment, others take payment at the time the turbines are
delivered and still others allow for payment post testing, upon completion of the install.
The delivery point matters because that is the point in which title is transferred and
transportation must be arranged and insurance must be obtained in advance. In any
turbine agreement, it is also important to include an assignability provision in the event
the project owner wishes to assign the contract and/or turbines to another project. The
lender and investors will want to make sure the supply contracts also contain warranty
provisions.
An Operation and Maintenance Contract typically provides for ongoing
responsibility even after construction of the facilities is complete. Key elements of this
13 Id. at 9-16.

6. agreement include the duration of the contract, how compensation is determined (cost
based versus incentive based), the scope of work, staffing of an experienced operator,
specific standards of performance, and termination provisions.
Warranty Agreements should include the term, typically two to five years, the
rights and remedies allowed if a party fails to perform obligations under the agreement.
Remedies might include repair, replacement or buy-down on equipment. Warranty
agreements often provide exclusions to the warranty for normal wear and tear or the
project owner’s actions causing operational issues.
3. Choosing the Best Financing Structure
Developers wishing to directly invest in a large scale wind project will face a
variety of legal and technical issues including how to finance the project, obtain contracts
to sell the energy output, obtain contracts to operate the facility and organize the business
structure of the project.
Sources of financing include equity, debt and direct government support. Equity
financing means the sale of an ownership interest in the wind project, the equity investors
take the risk that their capital investment may not guarantee a return.14 The developer
gives up some of the ownership rights to the equity investor since their ownership rights
may include both financial rights and governance rights. That is, the equity investor is
usually entitled to a portion of the profits and often has some input in making business
decisions.
Debt financing entails borrowing money from a lender.15 The borrower must pay
back the loan with interest. Over the life of the project, the cumulative interest can add up
to a significant amount of the total costs. The lender has no ownership interest in the
project but typically requires a security interest in project assets which could be
foreclosed on if the project loan is in default.
Government financing programs are available for certain wind projects. The
U.S.D.A. has offered to finance a certain percentage of a developer’s initial investment in
14 Id. at 8-3.
15 Id. at 8-5.

7. a new energy project. Because the direct government assistance is a grant, the money
does not need to be repaid and there is no investor ownership attached. There are other
government financing programs that include reduced interest rates for certain
government-subsidized loans or government issued loan guarantees.16
Wind projects are capital intensive and the bulk of the costs are incurred upfront,
because of this, the purchase and installation costs are mostly financed. Typically the
developer’s first step in financing a wind project is to obtain equity investment. Lenders
will often loan funds only after the project has commitments of all needed equity
investment. The initial project developer or purchaser will pay a down payment at the
beginning to evaluate feasibility and fund many of the pre-development activities
including evaluation of the wind resource, preliminary analysis of interconnection and
transmission issues, property interests at play, initial negotiations with potential power
purchasers, evaluate environmental and regulatory permit requirements, etc.17
Typically, actual funds from lenders and major equity investors will not be
available until the pre-construction activities are completed. Once completed, the
developer must obtain financing for the actual construction and operation costs, usually
this entails a combination of debt and equity.18 Equity investors are likely to be
businesses who can take full advantage of the federal tax credits associated with the
project, sources may include banks and insurance companies and other corporate
investors with passive tax liabilities.19
Existing Financing Structures
Given the huge capital undertaking required to build a wind project, the average
developer struggles to put up a project entirely on their own and frequently partner with
outside, tax-motivated equity investors. Developers can raise the needed capital quickly
with a co-ownership arrangement. Typical operating structures include the partnership
16 Id.
17 Id. at 8-8.
18 Id. at 8-9.
19 Id.

8. flip, the leveraged lease and the inverted lease. Each has its advantages and variations and
depending on the requirements and investor.
Partnership Flip
Essentially, this model works by engaging a tax-motivated equity investor who
will provide a majority (99%) of the cash equity and nearly own the entire project for the
first ten years.20 The equity investor then “flips” the project ownership back to the local
investors for the second half of the project. The co-ownership arrangement is carefully
designed to allow the tax-motivated equity investor to get the return on their investment
in the first ten years when the Production Tax Credit (PTC) is available.21
The project’s business entity is typically an LLC in the flip scenario. For the first
ten years, the equity investor receives the majority of the project’s profits in exchange for
the investor’s initial outlay of capital. The project’s debt obligations are paid down
during this period and the equity investor pays for most of the project’s costs. The project
developers receive only a very small percentage of the project’s income during the first
ten years.22
After ten years, (or until the investment reaches its target flip date), ownership of
the project flips and allocations reverse.23 The project developer receives the majority of
the cash flows for the remaining years of the power purchase agreement. The project
developer generally has to buy out the equity investor of its ownership interest at fair
market value, but it will be at extremely depreciated rates.24
Leveraged Lease
The leveraged lease model is used to finance construction of a wind facility using
developer equity and debt financing. The lease arrangement provides that investor funds
the purchase of the assets with cash equity and acquires the asset, using it as security.
20 Id. at 10-11.
21 Id.
22 Id. at 10-12.
23 Id. at 10-13.
24 Id.

9. The asset is then leased to the lessee (the project company as the developer) using non-
recourse term debt, and periodic payments to the Lessor to service the debt. The
developer repays the construction loan from sale of the project’s proceeds. This structure
can be put in place up to 90 days after assets are placed in service.
Investor now owns the Lessor entity that owns the assets and developer owns the
Lessee entity that operates the assets. This is a true lease for tax purposes: as owner of
the Lessor entity, the investor receives all tax benefits including the investment tax
credit/cash grant and is entitled to tax deductions for depreciation on the asset and interest
on the loan. The cash grant can be assigned to the Lessee however.
Inverted Lease
The inverted lease structure is perhaps the most complicated of the three
structures. It involves two partnership entities. First, the developer and equity investor
fund a “master tenant”. The developer and the equity investor make capital contributions
to the special project venture “master tenant”, the developer owns 1% and the equity
investor provides almost all of the funds for this and owns 99% of the tenant.
Next, the developer and master tenant fund an “owner/lessor” to own and lease
the systems to the master tenant. The developer typically owns 51% of the owner/lessor.
The master tenant is a flow through entity for tax purposes and as Lessee sells the power
and RECs, pays schedule rent to Lessor and contracts out for operation and maintenance
services.
Some developers prefer this structure because it allows them to keep half of the
depreciation tax benefits over five years and they can receive depreciation deductions to
shelter rent income. Once the lease expires (6-16 years) control of the operation and
maintenance of the project reverts to the Lessor/Developer without a need for a buy-out.
4. Lender Restrictions That Create Difficulties
Both lenders and equity investors want to avoid assuming too much risk. In order
to obtain financing at the lowest cost, a developer will want to make sure the project is

10. well documented and is as financially sound as possible. To make the case for financing
at a reasonable cost, developers will need to be ready to negotiate with potential lenders
and investors about how the financial risks can be minimized and who bears unavoidable
risks.
Lenders and investors will evaluate the entire deal documentation and may
require modifications to the transaction documents. They are looking to minimize their
risk that the turbine equipment is unreliable and will become inoperable or the electric
grid has a technical malfunction and prohibits electricity from being transmitted. A
developer will address this through warranty agreements from turbine manufacturers and
the purchase power agreement may need to include language to address circumstances
when energy cannot be delivered as promised.25 It is key that the basic paperwork
executed between the developer and the power purchaser, landowners, equipment
providers, contractors, engineers, transmission companies are all in place and give
protections to lenders.
There is some risk that the fuel source is unreliable, that is, predictions for wind
conditions and capacity factors may not hold true in the short term.26 Lenders and
investors will evaluate these assumptions and consider whether the project will meet its
anticipated revenues, often a margin of safety is created to account for short term
volatility.
The government assistance for constructing and installing new energy projects has
been anything but predictable and poses some risk to a wind project.27 The “boom-and-
bust cycle” of expiring and expanding production tax credits has caused concern to
investors and lenders as it directly affects the financial viability of a project.
Lenders aim to ensure the project will perform as projected throughout the
financing term and will require an independent expert supervise the work and plans and
the ability to address any problems that arise. This could entail lender involvement in
problem solving or a lender’s right to take over the project if it gets into trouble.
25 Id. at 8-11.
26 Id.
27 Id.

11. Lenders will evaluate a project’s key construction and operating assumptions
including project cost and schedule, capacity factor, performance guarantees, stability of
the regulatory regime, the purchase power agreement, site control, assignment and
consent of core contracts, review and assignment of core permits, loan repayment and
security provisions. Lenders typically require a security interest in all of the project
assets to secure repayment of the loan, giving the creditor the right to take a certain asset
as payment for the debt if the developer defaults on a payment.
5. Securing Financing with no Power Purchase Agreement
In some instances, one of the most difficult challenges in developing a wind
project is finding a willing purchaser to commit to a purchase power agreement with that
developer. However, some “merchant” plants have been constructed without the
financial safety of a long-term contract to the facility’s capacity; they rely on the market
for their sales and investors accept the market risk.
While it is less common, there are ways to finance a wind project without a power
purchase agreement. There are only a couple instances where utilities are required to buy
power from an independent power producer like a wind facility. Where mandatory
contracts are possible, the terms may not be profitable for a commercial scale wind
project.28 The federal Public Utility Regulatory Policies Act (PURPA) guarantees
specific purchases of wind energy at specific rates for some small power production
facilities. Specifically, PURPA’s process sets certain criteria for participation and
applies to certified Qualifying Facilities (QFs), which include renewable energy
generators with a capacity of 80 MW or less.29 PURPA guarantees a right to
interconnection and a particular price for wind power, that is, utilities are required to
purchase a QF’s generated energy at a utility’s avoided cost rate. However, changes to
PURPA in the 2005 Energy Policy Act allow some utilities an exemption from the
purchase obligation.30
28 Id. at 9-8.
29 Id. at 9-3.
30 Id.

12. In order to qualify for the QF status, an owner of a wind facility may either self-
certify or apply for FERC certification, the latter is more expensive but it provides more
assurance for a potential lender.31 Not all utilities are required to do business with a QF.
Some states only require state regulated utilities to enter purchase agreements and other
states subject all utilities to the mandate.32
Although, PURPA guarantees a power market, the PURPA avoided cost rate paid
to the QF is sometimes not very favorable for incentivizing wind development. The
avoided cost is equal to the cost to the electric utility of the electric energy which, but for
the purchase from such QF, such utility would generate or purchase from another
source.33 But, with the help of government incentive programs, some wind projects have
been able to make a profit by generating electricity below the utility’s avoided cost.
6. Navigating the Current Tax Subsidy Landscape
Wind energy development in the U.S. has been heavily dependent on government
incentives in the form of income tax credits or other income tax relief. This presents a
challenge for many developers who lack sufficient tax liability to take full advantage of
tax incentives. Wind developers often sell the “tax equity” in their project to large tax-
motivated entities, like banks, pension funds and insurance companies who need the tax
write-offs. The role of the tax equity investor is crucial to the economics of a wind
project since they either invest a majority of the initial capital or they pay-as-they-go by
associating their equity payments with actual production tax credits generated by the
facility.
Production Tax Credit
The most instrumental tax incentive is the federal Production Tax Credit (PTC)
which gives the owner/developer per-kilowatt-hour production tax credit for electricity
produced by a qualified facility and sold by the taxpayer to an unrelated third party. The
tax credit can be used against corporate income tax liabilities of the project owner. The
31 Id. at 9-4.
32 Id. at 9-5.
33 Id.

13. PTC was originally enacted in 1992 under 26 U.S.C. Section 45 and has been renewed
and expanded numerous times, but most recently in the American Taxpayer Relief Act of
2012 (H.R. 6, Sec. 407) in January 2013. The 2013 legislation revised the credit and
extended the deadline for one year. Now the taxpayer is entitled to credits of 2.3 cents
per kWh for wind electricity for a 10 year credit period so long as construction began
before December 31, 2013. Any unused credits may be carried forward for up to 20
years following generation.
The PTC is subject to reduction for certain grants, tax-exempt bonds, subsidized
energy financing and other credits received by the taxpayer to offset the costs of building
a wind facility. The credit is taken by completing the IRS Forms 8835 (Renewable
Electricity Production Credit) and 3800 (General Business Credit). The dsire.org
website explains the April 2013 IRS issued guidance on how it will evaluate whether
construction has commenced for the purpose of the year-end 2013 deadline, which was
later clarified by IRS Notice 2013-60, and IRS Notice 2014-46.
Investment Tax Credit
The federal energy business tax credit, known as the Investment Tax Credit (ITC)
available under 26 U.S.C. Section 48 allows corporate tax credit for eligible systems
placed in service on or before December 31, 2016. The ITC credit is equal to 30% of
eligible project costs. The American Recovery and Reinvestment Act of 2009 modified the
options for wind energy facilities that qualify for the PTC, such qualifying facilities could
choose in lieu of the PTC to take either the (i) ITC or (ii) a cash grant from the U.S.
Treasury Department under Section 1603 of the 2009 Stimulus Act to help the developer
pay for a portion of initial costs to get the wind project up and running. Instead of using
the PTC, developers might prefer to take advantage of the ITC tax benefits because there
is no requirement for third party sales, no reduction of credit for subsidized or tax-exempt
financing, and no ownership requirement.
Treasury Grant in Lieu of Tax Credits (Section 1603)

14. The Section 1603 program offers renewable energy project developers cash
payments in lieu of investment tax credits. Section 1603 of the American Recovery and
Reinvestment Act of 2009 (Section 1603) authorizes the U.S. Department of the Treasury
to make cash payments for specified energy property in lieu of tax credits. The purpose of
the 1603 grant money is to reimburse eligible applicants for a portion of the cost of
installing certain energy property used for business purposes or for generating income.
The value of the award is equivalent to 30% of the project’s total eligible cost basis in
most cases.
A Section 1603 payment is not made until the energy facility is operational, that
is, no payments are made during the construction phase of the project or prior to the
placed in service date. The taxpayer must establish ownership of the eligible property.
The treasury grant is only available to property that was either placed in service between
January 1, 2009 and December 31, 2011 or construction on the specified energy property
began between January 1, 2009 and December 31, 2011 and the property was operational
before the credit termination date. For a brief period, between March 1, 2013 and
September 30, 2013, any awards made to a Section 1603 applicant were reduced by 8.7%
due to sequestration, awards made before that time were not affected. Following this
period, the sequestration rate is subject to change.
Accelerated Depreciation
Accelerated depreciation is widely used as an incentive for greater investment in
renewable energy. Accelerated depreciation helps lessen the burden of tax and can
reduce project costs during a company’s start up years. Under federal law, taxpayers who
buy equipment for a business purpose, with a useful life extending beyond the tax year of
the purchase, are allowed to take a tax deduction representing the depreciation of the
equipment over its useful life. Under 26 U.S.C Section 128 and 26 U.S.C. 48, qualified
equipment for building wind facilities is eligible for the Modified Accelerated Cost-
Recovery System (MARCS) depreciation method and such projects are granted an
accelerated depreciation schedule of five years. Instead of depreciating the equipment

15. over the typical useful life of 15 years, this results in larger annual depreciation
deductions early on.
Additionally, the federal Economic Stimulus Act of 2008, allowed for bonus
depreciation on qualified renewable energy systems acquired and placed in service in
2008, federal law 26 U.S.C. Section 168(k) grants 50% bonus depreciation. The deadline
for systems to be placed into service has been extended and modified several times.
Most recently, in January 2013, the American Taxpayer Relief Act of 2012 (H.R. 8, Sec.
331) legislation extended the placed in service deadline to December 31, 2013.
Currently, no bonus depreciation is available.
7. Grants and Other Incentives for Wind Energy Development
Production-Based Incentives
The federal government and several state governments offer various incentives for
wind energy development. Incentives can come in the form of direct production-based
payments or in the form of government-subsidized financing programs, including direct
government grants and loans.
Some states provide wind project owners with direct cash payments (rather than a
tax credit) per kWh of generated renewable energy over a period of years of the project’s
operation. These forms of production incentives do not require the project owner to have
a separate source of tax liability to take advantage of the program.34
The federal government also currently makes direct production payments
available to tax-exempt entities, and it is intended to give the tax-exempt entities a benefit
similar to the value provided to taxable entities under the federal PTC. Under the
Renewable Energy Production Incentive (REPI) 35 wind energy facilities owned by not-
for-profit electric cooperatives, municipal utilities, local and state government entities are
able to receive incentive payments for electricity produced and sold at 1.5 cents per kWh
for the first ten year period of the project’s operation. The incentive payments are
available only for renewable energy generated by a wind facility first used before
34 Id. at 12-2.
35 42 U.S.C. §13317

16. October 1, 2016. The REPI incentive payments are subject to yearly appropriations by
Congress.
State Grant & Loan Programs
Some states offer grant funds to directly assist wind energy developers with
financing needs. Specific benefits, eligibility requirements and funding sources for the
grant programs vary by state.
Loan programs are a popular form of government-supported project financing at
the state level. Such loans frequently come in two forms, either the government offers
capital at reduced rates or no-interest, or the government acts as the guarantee for
commercial loans which allows developers to obtain more reasonable interest rates.36
An example of a state loan program is the Alternate Energy Revolving Loan
Program administered by the Iowa Energy Center to encourage alternative energy
development in the state.37 Initially the fund was established with a special assessment on
electric and gas utilities, but not runs on the loan repayments and interest.38 The loans are
made in conjunction with local banks and the borrower enjoys an interest free loan for a
term over twenty years, but it may not exceed half of the total costs of the project.39
Federal Grant and Loan Programs
The U.S. Department of Agriculture (USDA) offers a federal program designed to
make investing in wind energy projects more financially viable. The Rural Energy for
America Program provides financial assistance known as REAP Grants to agricultural
producers and rural small businesses to develop renewable energy systems. These grants
are limited to 25% of a proposed project's cost and according to the Database of State
Incentives for Renewables and Efficiency (DSIRE), renewable grants for 2013 were
between $2,500 and $500,000.
36 Id. at 12-5.
37 Iowa Code § 476.46(1), 2(c) (2014).
38 Iowa Code § 476.46(3) (2014).
39 Iowa Code § 476.46(2)(d)(2), (2)(e)(1) (2014).

17. The U.S. Department of Energy's (DOE) Tribal Energy Program promotes tribal
energy sufficiency through the development of renewable energy systems and seeks to
provide assistance to tribes for installation of community and facility-scale clean energy
project on tribal lands.
Government Promotion of Renewable Energy Purchases
Governments can use their regulatory authority over utilities to create demand for
wind energy.40 States are providing a variety of regulatory mechanisms to promote wind
energy development. Direct initiatives typically take the form of either a mandate, in
which the state requires a specific result, as in the “renewable portfolio standard” (RPS)
or an objective, in which the state asks the utilities to voluntarily reach a target.41
A state’s RPS mandates that certain investor owned utilities or other retail electric
providers provide a specified amount of their electricity from renewable energy sources
such as wind. The mandates often have scheduled increases in the required percentage.
Utilities are generally allowed to meet the RPS requirements through a combination of
self-generation or purchases of renewable energy from other generators, or some states
allow utilities to purchase tradable renewable energy credits (RECs). The Database of
State Incentives for Renewables and Efficiency (DSIRE) at dsireusa.org has the most
comprehensive listing of state and federal renewable energy incentive information.
Federal loans have been instrumental in helping to promote renewable energy
deployment. In addition to providing grants, the USDA’s Rural Energy for America
Program provides financial assistance in the form of loan guarantees, such loan
guarantees may not exceed $25 million.
To the extent possible, a developer of a wind project should research the wide
variety of financing options available and determine whether the wind facility is realistic
and feasible in both the short term and long term. With ongoing inflation and increasing
demand for materials that go into a wind system, costs of installing a wind project are
like to continue to rise. Be sure to consult with business advisors and legal counsel alike.
40 Id. at 12-12.
41 Id.