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  • Eveready Group

Federal tax credit boosts home wind turbine market

Date: 26 January 2009

Auch's residential small wind turbine (2.5kW) knocks 40 percent to 50 percent off his monthly electric bill. The former contractor hopes to persuade fellow residents to invest $12,000 to $18,000 in a residential wind turbine with the promise that it will eventually pay for itself.

And for the first time, Auch and his industry colleagues will have a silent partner the U.S. government.

 The $700 billion federal bailout of the nation's financial sector established a residential wind investment tax credit of $1,000 per kilowatt of capacity, providing up to $4,000 in assistance.

 "That speeds up the payback," Auch said.

 Residential wind energy systems turbines producing up to 10 kilowatts of power will never encompass a large chunk of the national energy picture, said Mike Bergey, president and co-founder of Norman, Okla.-based Bergey Windpower Co.

 But for homeowners, ranchers and small business owners, they provide a means to affordably generate their own clean power, Bergey said.

 "They are pieces of the portfolio that we need to put together," he said.

Ron Stimmel, the American Wind Energy Association's small wind advocate, said about 1,500 residential wind turbines were sold in the U.S. last year, and the market has been growing at an annual rate of 14 percent to 25 percent during the past decade.

 He expects at least 50 percent growth in 2009 as the industry continues to mature by developing more reliable designs and attracting more outside investment.

 The Washington-based organization had lobbied Congress for a straight 30-percent federal tax credit instead of one capped at $4,000, but Stimmel said the new incentive is a start.

 "If we can get that expanded, we could see the industry double in a short period of time," he said.

 Stimmel said he expects strong growth in states with their own incentives, such as Oregon, California, Arizona, New York and New Jersey, as buyers can often benefit from both categories of credits.

 Auch's 2.4 kilowatt turbine on his acreage just outside Lesterville begins producing power in an 8 mph breeze and achieves full output in 29 mph winds.

 The whir in a recent winter day's 15 mph winds was audible but not distracting, and the wind association estimates that most modern residential turbines reach decibel levels no noisier than an average refrigerator.

 The turbine continually sends performance stats to Auch's laptop computer through a wireless connection, and a small inverter housed in the device converts the electricity from direct to alternating current so it can mesh with the power grid. A special two-way meter provided by Auch's energy co-op measures both the power he uses and the excess he produces.

 Price always has been the small wind industry's primary barrier, as a system with enough juice to power an entire home typically costs about $30,000, according to the association.

 Wider use will help bring those costs down, Bergey said.

 "Small wind systems are expensive today because we don't produce very many of them," he said. "They're not in mass production at all."

 Another obstacle is a lack of standardized regulations, as height limits and required property line offsets are dictated by local zoning laws.

 Bergey said residents looking to erect wind turbines often run into a ubiquitous 35-foot height restriction an arbitrary number that began showing up in East Coast zoning ordinances a century ago.

 At the time, fire pumps could push water just 35 feet in the air, and municipalities didn't want to build livable structures at heights that couldn't be reached by firefighters. The 35-foot number has since been copied into local ordinances across the country in droves, leaving residents to fight for variances or special use permits to get the blades moving, Bergey said.

 Ernie Pritchard, co-owner of Ontario, N.Y.-based Sustainable Energy Solutions Inc., said his company has installed nearly two dozen Bergey wind turbines in New York state over the past four years, and in nearly every case the resident has had to apply for a waiver to surpass a local 35-foot height restriction.

 Pritchard said efforts to educate a local board's members about wind turbines can be time consuming, typically taking anywhere from three to 12 months.

 "But we have batted a thousand when trying to get a variance from these laws," Pritchard said.

 California land developer Chuck Braswell is convinced it's easier to get a subdivision permitted than a wind tower.

 Two years ago, Braswell applied to put up a 10 kilowatt turbine reaching 93 feet in the air on his 60 acre property in Riverside County, Calif. Braswell restores vintage and antique cars, and all that grinding, welding and painting leaves him with monthly electric bills as high as $600.

 But his venture ran into opposition from residents of a nearby subdivision who argued that turbine would impede their view of the mountains.

 "They felt they had purchased the right to any view from their property to any unlimited, unspecified distance," Braswell said. "And they didn't want this energy generation machine in their view."

 The permitting was expected to run between $3,500 and $4,000, but after $10,000 in fees, multiple public hearings and numerous back-and-forths on landscaping issues, Braswell's $34,000 worth of wind equipment continues to sit idle in his yard.

 Braswell said he's now being told that the county is assessing another $4,000 in fees. He's requested a hearing with the director, "and that's where it sits now."

 Stimmel said six states have pre-emption of home rule statutes that say if the local jurisdiction doesn't have a small wind zoning code on the books, it must follow the state's prescribed rules.

 "A lot of times if it's not on the books, they're kind of denied just by default," Stimmel said.

 Industry advocates also are pushing for wider use of net metering, in which power-producing residents can bank excess electricity and get a one-to-one payback for any power they generate but don't consume.

 More than 40 states have net metering laws, but not all utilities interpret the laws the same way.

 "Whether or not the input/output is averaged over a year or over a month can make a huge difference, just because of the seasonal variations in wind," Stimmel said.

 Bergey sees net metering policy as a secondary issue to the real reason people are drawn to home wind turbines: their desire for energy independence.

 "The primary value is going to be the energy that you don't consume, you don't buy from the utility because you've supplied it from your own wind generator," he said.

As written by: DIRK LAMMERS

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