Wind energy has taken off in Iowa, partly because of financial incentives.
Early on, the Iowa Power Fund provided grants totaling $75 million to promote research and commercialization of energy projects, including wind developments. The success of the program was debated, and it was canned after Gov. Terry Branstad was elected in 2010.
The state also provided incentives for wind component companies, such as Clipper Windpower in Cedar Rapids and Acciona in West Branch, said Tina Hoffman, spokeswoman for the Iowa Economic Development Authority.
“Transportation to get something like that from Europe is significant,” Hoffman said of the turbine parts.
A 20-year federal tax credit was worth about $2 billion for all U.S. wind projects in 2013, according to Bloomberg BusinessWeek. The credit expired Dec. 31, but projects started by that time are eligible for up to 10 years.
Iowa offers wind energy producers a variety of tax breaks, including sales tax exemptions for equipment and reduced property taxes.
The Renewable Energy Tax Credit, for facilities placed into service before Jan. 1, 2017, gives producers or purchasers of renewable energy a credit of 1.5 cents per kilowatt hour of energy.
The Iowa Legislature also created a special property tax valuation for wind facilities in 2008. If county supervisors approve the procedures, owners pay no property taxes the first year of operation.
The rate increases by 5 percent a year until it reaches 30 percent, where it remains.
Iowa turbines, when they reach maximum assessment, will add an estimated $2.6 billion to county tax collections, the Iowa Wind Energy Association reported. Those taxes pay for items such as schools and roads.
In Tama County, where MidAmerican Energy put up 20 turbines in 2012, the properties have a total assessed value of $3.66 million for the 2014 assessment year, which is estimated to bring in $85,000 in taxes. Some of that will go toward tax increment financing (TIF) for road maintenance in that area, Assistant County Auditor Maureen Kratoska said.
By the seventh year, the county could see up to $500,000 in taxes from the wind farm.
Iowa landowners with turbines on their property receive more than $16 million a year in lease payments, the Iowa Wind Energy Association reported.