Iowa Wind Facts

Iowa is among the leaders in wind energy production, both in the Midwest and nationally. With over 1100 working turbines spread over 47 wind farms, Iowa is taking wind energy by storm. With accessible transmission lines and nearly 40% of the land producing wind speeds necessary to generate power, it’s no wonder that Iowa is taking advantage of this amazing resource.

To ignite continued wind energy developments, Iowa has extensive legislation in place to provide incentive for production. All Iowa-based electric utilities are required to offer green power options to their customers. Other incentives include production tax credits, and excise, property and sales tax exemptions.

Iowa wind facts as of January 2008:
• Total installed wind energy capacity (MW): 1273
• Current wind energy capacity under construction (MW): 117
• Total wind energy potential (Billions of kWh/year): 551
• Average potential power output (MW): 62,900
• Ranks 10th in US for potential wind energy output
• Ranks 4th in US for current wind energy output

Financial Incentives

Renewable Energy Production Tax Credit:
In June 2005, Iowa implemented two production tax credit programs for eligible wind energy systems. A facility can only apply for one of the two credits. The first credit is defined for wind and other renewable energy facilities while the other is for wind energy facilities only.

Small Wind Energy Facilities (Iowa Code 476C)

- Production tax credit of 1.5 cents per kilowatt hour
- Credit can be applied toward the state's personal income tax, business tax, financial institutions tax, or sales and use tax.

To be eligible:
- 180MW maximum eligibility limit, cannot exceed 2.5 MW combined capacity per owner.
- Facilities must be 51% owned by qualifying owners, as defined and approved by the Iowa Utilities Board (IUB).
- Facilities must be placed into service on or after July 1, 2005, and before January 1, 2012.
- Cannot have ownership interest in more than 2 wind energy facilities
- Systems must be operational within 30 months of IUB approval.
- An approved facility owner may apply for renewable energy tax credits over a 10 year period.

Large Wind Energy Facilities (Iowa Code 476B)

-Production tax credit of 1.0 cent per-kilowatt hour
- Credit can be applied toward the state's personal income tax, business tax, financial institutions tax, or sales and use tax.

To be eligible:
- 450MW maximum eligibility limits.
- No determined specific ownership criteria for individual projects.
- Owners may not acquire more than two eligible facilities.
- Must have an executed power purchase agreement or interconnection agreement
- Facilities must be in service on or after July 1, 2005, but before January 1, 2009.
- Systems must be operational within 18 months of IUB approval to maintain eligibility status but can apply for a 12-month extension if unable to obtain wind generating equipment.
- An approved facility owner may apply for renewable energy tax credits over a 10 year period.

Excise Tax Exemption: Iowa enacted a ($0.0006) per kWh on different types of electricity generated within the state to replace the property tax. However, all wind energy conversion systems are exempt from this generation tax.

Property Tax Assessment: A city or county can pass an ordinance for wind energy conversion equipment to be assessed at a special valuation for property tax purposes.

• The special rate begins at 0% of the net acquisition cost during the first year
• The rate increases annually by 5 percentage points. The maximum is 30%, reached by year 7 and the years following.
• A taxpayer must file for their first valuation by February 1st of an assessment year.
• If a taxpayer fails to file for a special valuation, the taxable value of the wind system will not increase for 5 years.

Property Tax Exemption: The market value added to a property by a wind energy system is exempt from the state's property tax.

State Sales Tax Exemption: The total cost of wind energy equipment and all materials used to build wind energy projects are exempt from sales tax. However, the exemption does not apply to the equipment used to construct a wind energy plant.

Mandatory Utility Green Power Option: All electric utilities are required to offer green power options to customers.




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