Modern United States wind energy policy coincided with the beginning of modern wind industry of the United States, which began in the early 1980s with the arrival of utility-scale wind turbines in California at the Altamont Pass wind farm. Since then, the industry has had to endure the financial uncertainties caused by a highly fluctuating tax incentive program. Because these early wind projects were fuelled by investment tax credits based on installation rather than performance, they were plagued with issues of low productivity and equipment reliability. Those investment tax credits expired in 1986, which forced investors to focus on improving the reliability and efficiency of their turbines. The 1990s saw rise to a new type of tax credit, the production tax credit, which propelled technological improvements to the wind turbine even further by encouraging investors to focus on electricity output rather than installation.

Wind energy policy is generally directed at three categories of constituents: Research and Development Organizations Commercial/Residential Generators Manufacturers and Producers

with one of two goals: to provide incentives or require production and installation of wind turbines or production of electricity from wind, or facilitate the appropriate location of wind turbines.

Historically, incentives have come in the form of production or installation tax credits, grants, and renewable portfolio standards, at the federal, state, and local levels of government. Policy facilitating appropriate location has historically come in the form of local ordinances and permitting requirements.

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Background

United States Energy Legislative History Renewable energy policy gained interest after the oil shocks in the 1970s and environmental concerns because it offered diversification in the US energy portfolio Energy Policy and Conservation Act (P.L. 94-163). Wind energy was among the renewable energy options incorporated in energy policy beginning in the 1970s and continuing into the present day. The growth in wind energy can largely be accredited to the public policy's providing incentives and technological advances, making wind energy one of the few cost competitive renewable energy options. Although there has been a significant decrease in the cost per kilowatt hour of wind energy since the 1980s, wind energy only accounts for a small portion of the U.S.'s electrical demand.

Wind energy policy has had two approaches to advance the industry. One approach has been to increase implementation or improve the technology. Alternatively, there has also been policy aimed to advance the entire industry as a whole, combining the implementation and technology. The legislative history outlines the public policy that has taken place starting the 1970s leading up to current energy legislation and what effects it has made on renewable energy, specifically wind.

Energy Policy and Conservation Act 1975

Signed into law in 1975 by President Gerald Ford, this act was designed to cut the energy demand. Although this act primarily enacted because of oil shocks in the 1970s, it also encouraged programs, research and projects which dealt with alternative fuels. The Secretary of Energy was instructed to report feasibility and progress on this matter to Congress.

Public Utility Regulatory Policies Act 1978

The Public Utility Regulatory Policies Act (PURPA P.L. 95-617) passed in 1978 was very important to increasing electricity production from renewable energy facilities. PURPA required that electric utilities must interconnect with renewable power production facilities. They then would have to buy that power at a price mandated by their state equal to avoided cost; avoided cost is the cost a utility escapes by purchasing this power, opposed to building a new plant, consisting of capital and operating costs of the forgone plant.

Renewable Energy and Energy Efficiency Technology Competitiveness Act 1989 The purpose of the Renewable Energy and Energy Efficiency Competitiveness Act 1989 (P.L. 101-218) was to set specific goals for the U.S. on the matter of wind, photovoltaics, and solar thermal energy programs. For wind energy, the specific goals set include, "improving design methodologies and developing more reliable and efficient wind turbines to increase the cost competitiveness of wind energy. Research efforts shall emphasize: (i) activities that address near-term technical problems and assist private sector exploitation of market opportunities of the wind energy industry; (ii) developing technologies such as advanced airfoils and variable speed generators to increase wind turbine output and reduce maintenance costs by decreasing structural stress and fatigue;(iii) increasing the basic knowledge of aerodynamics, structural dynamics, fatigue, and electrical systems interactions as applied to wind energy technology; and (iv) improving the compatibility of electricity produced from wind farms with conventional utility needs."

The legislation continues by specifying goals for the Wind Energy Research Program, "(i) reduce average wind energy costs to 3 to 5 cents per kilowatt hour by 1995;(ii) reduce capital costs of new wind energy systems to $500 to $750 per kilowatt of installed capacity by 1995; (iii) reduce operation and maintenance costs for wind energy systems to less than one cent per kilowatt hour by 1995; and(iv) increase capacity factors for new wind energy systems to 25 to 35 percent by 1995."

Solar, Wind, Waste, and Geothermal Power Production Incentives Act 1990 This act is an amendment to the Public Utility Regulatory Policies Act (PURPA) of 1978 and the Federal Power Act. The main purpose is the remove the size limitations placed on renewable energy facilities, such as solar and wind, to receive PURPA benefits. This will encourage the development of renewable energy production. The act specifies the qualification, application, and construction deadlines and requirements for the facilities. The act was amended in 1991, because of a technicality, to include renewable energy facilities of all sizes.

Energy Policy Act (EPACT) 1992

The Energy Policy Act of 1992 (P.L. 102-486) replaced the National Energy Conservation Act (NECPA) and focused on the following issues: water conservation, Federal energy efficiency fund, utility incentive programs, financial incentive program, demonstration of new technology, general services administration Federal building fund, energy savings performance contracts, energy audit teams, energy-efficient product procurement, U.S. Postal Service and Congressional building regulations, and fleet management.

Title XII of this Act directly discusses renewable energy and amends the Renewable Energy and Efficiency Technology Competitiveness Act of 1989 by, "(1) implement a five-year program to further the commercialization of renewable energy and energy efficiency technologies by soliciting proposals for demonstration and commercial application projects; and (2) establish an Advisory Committee on Demonstration and Commercial Application of Renewable Energy and Energy Efficiency Technologies."

It further instructs the Secretary to, "(1) prepare and submit to the Congress a three-year national renewable energy and energy efficiency management plan with specified contents; (2) establish a renewable energy export technology training program for individuals from developing countries; (3) make Renewable Energy Advancement Awards in recognition of developments that advance the practical application of certain renewable energy technologies; and (4) study and report to the Congress on whether certain conventional taxation and ratemaking procedures result in economic barriers to, or incentives for, renewable energy power plants compared to conventional power plants."

Renewable Electricity Production Tax Credit EPACT '92 enacted the renewable electricity production tax credit (PTC). The PTC is a corporate tax credit for several renewable sources including wind, which credited 1.5₡ per kWh for electricity produced by wind power. The PTC expired in July 1999 and has been expanded and extended several times through many different laws including the Job Creation and Worker Assistance Act of 2002 (P.L. 107-47), American Jobs Creation Act of 2004 (P.L. 108-357), Energy Policy Act of 2005 (P.L. 109-58) and several others. The PTC was extended by the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) until the end of 2012, but was retroactively renewed at the end of 2013. The PTC has been a major incentive for wind power, and has helped to spur independent wind energy power producers. As part of the 2013 fiscal deal, "the PTC was extended for another year and the rules for it were changed."

Renewable Energy Production Incentive EPACT '92 also established a federal performance based incentive for renewable energy, which includes wind energy. The Renewable Energy Production Incentive's (REPI) purpose is to give incentive payments for electricity generated and sold by new qualifying renewable energy sources. Eligible facilities could receive 1.5 cents per kilowatt-hour (kWh), in 1993 dollars, now adjusted for inflation to equal 2.3 cents per kilowatt-hour, for the first 10 years of operation. This incentives is to be in addition to the federal renewable energy production tax credit (PTC). This incentive's deadline is October 1, 2016 and applies only to electricity sold to another entity.

Energy Policy Act (EPACT) 2005

EPACT 2005 (P.L. 109-58) addresses numerous energy management goals for Federal facilities. The act also makes amendments to the National Energy Conservation Policy Act (NECPA). Several issues it addresses include: metering and reporting, energy-efficient product procurement, energy savings performance contracts, building performance standards, renewable energy requirements, and alternative fuel use. The effect on wind energy is through the renewable energy requirements.

Renewable energy requirement

The Secretary of Energy shall, when technically and economically feasible, require the total electric energy consumed to be provided by renewable energy for the Federal government:

1. Not less than 3% from 2007–2009

2. Not less than 5% from 2010–2012

3. Not less than 7.5% from 2013 and beyond

Double credit must be given if the renewable energy is produced at a Federal facility, on Federal lands or Native American Lands.

A PV commercialization program must be established for Federal buildings and 20,000 solar energy systems must be installed in Federal buildings.

In order to meet these requirements, government agencies must submit an annual report to the Department of Energy. This must detail their progress towards meeting the standards as a part of their annual data reporting. The Secretary of Energy then must provide a report to Congress, using the agencies information.

Energy Independence and Security Act of 2007 (EISA 2007)

The Energy Independence and Security Act of 2007 (PL 110-140) had very few policy provisions with regards to the wind industry. The only major stipulation regarding wind is in section 656 of the act. It directs the DOE to set up a cost-shared Renewable Energy Innovation Manufacturing Partnership Program. This program would make awards to support research, development and demonstration of advanced manufacturing processes, materials and infrastructure for renewable energy technologies. Wind systems are one of the several alternative forms of energy equipment that are eligible for these rewards. This section sets further goals to increase domestic renewable energy production as well as to better coordinate federal state and private sector resources.

American Reinvestment and Recovery Act (ARRA) 2009