Wind Leveraging Tax Credits

September 30, 2020 11:27 pm Published by

Wind Leveraging Tax Credits

If you look out on a wind-turbine farm, there might be dozens of structures spinning in the breeze. A single turbine can cost thousands of dollars. This type of investment takes commitment on the part of the owner. Many companies want to get into the wind business, but there are financial obstacles. The federal government means to change this scenario. Explore the various tax credits available today for your wind-energy investment. Leveraging these advantages will only pay off in the end.


One of the most basic tax credits for businesses is the Renewable Electricity Production Tax Credit or PTC. For every kilowatt-hour of wind-power energy sold for the first 10 years of a facility’s operations, the business can take 2.3 cents off of their taxes. This amount only applies to facilities that began construction in 2016.

For facilities with construction start dates after 2016, there’s a graduated percentage chart to help with those tax credits. The construction start date incentive encourages the work to be completed as quickly as possible so that the credits can begin.


The Business Energy Investment Tax Credit or ITC is similar to the PTC, but it’s based on the capital investment. Instead of being given a tax credit over 10 years, the ITC is a one-time payment based on the overall cost to build the wind facility. The wind turbine must be in service to claim this credit, however. Depending on the business’s financial position, its owners may want to choose either the ITC or PTC credit. They both have their advantages and drawbacks.


The New Markets Tax Credit is incentive for companies to build wind farms in under-served areas. Over a seven-year period, about 39 percent of the project’s cost can be submitted for tax credit.

This program is particularly helpful for low-income communities. Sustainable energy is less expensive than other types. Installing the structures in these communities isn’t normally cost effective for the developers, however. The tax credit levels the playing field so that wind power can be accessible to larger populations than before. A business has a chance to expand without too much investment across a wide area.

Power Purchases

Some cities have regulations that allow for wind turbines to be installed on residential properties. Each one of these turbines supports the resident as he or she pays for the energy that’s used. This power purchase goes on for a set amount of time. Both the resident and company can use tax credits from the city in order to lower costs.

There are other credits involved that are more internal to both parties. The business relationship becomes a symbiotic type for many years to come.

State Incentives

It’s a fact that most tax credits are based out of the federal government. There are other options from the state, however. If you’re a company based out of one state, research any tax credits for your region. Companies serving multiple states may have more resources.

Most tax credits from either the federal government or the state can be used together. Some states are simply more generous than others. Combine the credits in order to lower your bottom line. A few percentage points can make a big difference.

Simplifying Implementation Procedures

In some areas, residents want to have their own wind turbines. Small structures on their property give them power over their energy use, which is the same concept as installing solar panels on your rooftop. Installing a small turbine, however, requires permits and complicated fees.

Local businesses and government can band together to simplify this process. When residents can move through the permitting process with ease, there can be more turbines on privately owned property.

With this fact in mind, local businesses that want to support the community with wind power will now have fewer homes to cover in their design process. They can build wind farms with fewer structures, which gives them a chance to take advantage of tax credits right away.

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This post was written by Aaron Rood

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