Report Shows Wind Energy’s Benefits and Potential Savings to Farmers
July 11, 2018
Clean energy presents an opportunity for savings and stability and could also be a source of income for agricultural producers. Wind energy developments in Colorado are helping propel the nation’s agriculture sector forward into clean energy. A recent report from the Center for the New Energy Economy shows the benefits and potential savings for farmers. Policy analyst Francisca Pretorius says for Colorado, agriculture is a big economic driver.
“So Colorado has 34,000 agricultural operations, and they operate on approximately 32 million acres of private land. About 10 million acres of federal and state land are also used for grazing, so in total about 63% of Colorado’s total 66 million acres of the land goes towards agriculture. So, this sector is a critical driver of Colorado’s economy, and it contributes more than $40 billion annually and provides more than 170,000 jobs in the state. And regardless of how you define the largest industry in the state, for example, if you look at the value of the output, or the number of jobs, or the wages paid, agriculture is consistently one of the top industries in Colorado.”
Energy expenses are one the biggest costs farmers and ranchers face. The report shows that renewable energy, like wind energy, can offer savings, stability, and income for farmers.
“One of the advantages of wind turbines is that they do not require as much space as solar panels to produce the same amount of electricity, so farmers and ranchers can still use their land. In producing renewable energy, farmers not only have the opportunity to meet their own energy needs and therefore lower their energy expenses, but they can also earn some money by transferring land use from agricultural production to companies to install utility-scale solar or wind projects.”
Pretorius says that in 2015, Colorado farmers received a total of $9 million in lease payments for turbines. Farmers typically receive $7,000 to $10,000 per turbine per year.
“A farmer who signs a contract for the installation of a wind turbine on their farm will typically receive two types of payments. The initial payments are a lease of the development rights of the land, and once a company starts building a wind turbine, the lease typically changes to payments based on the electricity produced by the turbine. In addition to this, the county also receives a property tax revenue from the wind project owner, and the increase in property tax revenue benefits county residents by paying for roads and schools, fire departments, or whatever the county decides is most useful.”
A barrier to farmers and ranchers however, is financing clean, renewable energy, such as wind, can be a challenge. Pretorius says there are ways to get help, including the USDA Rural Energy for America, or REAP, Program.
“This provides guarantees on loans to agricultural producers and rural small businesses for renewable energy systems or for energy efficiency improvements, and this includes wind power. Small wind programs may qualify for a business energy investment tax credit. And another possible incentive for small wind projects is the modified accelerated cost recovery system, and this is also managed by the IRS. And, one other that I wanted to mention is the U.S. Department of Energy that offers a loan guarantee program for innovative energy projects in agriculture. You can find more information on distributed or small wind at windexchange.energy.gov.”