2002 Farm Bill - Wind Energy Development Provisions

The following is the text of the bill that introduced incentives to encourage the use of Renewable Energy Systems and Energy Efficiency Improvements:

Incentive Type: Low-interest loans, loan guarantees, and grants.

Eligible Technologies: Renewable energy systems (energy derived from wind, solar, biomass, geothermal, and hydrogen derived from biomass or water using a renewable energy source) and energy efficiency improvements.

Applicable Sectors: Agriculture, rural small commercial.

Amount: Varies. The grant may not exceed 25% of the cost of a project, and a combined grant and loan or guarantee may not exceed 50% of the cost of a project.

Terms: 2003 - 2007 Date Enacted: 2002

Authority: Farm Bill, Title IX, Section 9006

Summary: This law allows direct financial assistance to farmers, ranchers, and rural small businesses for the purchase of wind power and other renewable energy systems and for energy efficiency improvements. This program is authorized for funding for up to $23,000,000 per year in 2003-2007, totaling up to $115 million. In determining the amount of a grant or loan, USDA shall consider the type of renewable energy system, the quantity of energy likely to be generated, the expected environmental benefits, the extent to which the system is replicable, and the amount of energy savings from energy efficiency improvements and the likely payback period.

Green Tag Purchase Program

Mainstay Energy is a private company offering customers who install, or have installed, renewable energy systems the opportunity to sell the green tags (also known as renewable energy credits, or RECs) associated with the energy generated by these systems. These green tags will be brought to market as Green-e* http://www.green-e.org or state certified products. Participating customers receive regular, recurring payments through the Mainstay Energy Rewards Program.

The amount of the payments depends on the size of the wind installation, the production of electricity by that system, and the length of the contract period. Mainstay offers 3-, 5-, and 10-year purchase contracts. The longer contract periods provide greater incentive payments on a $/kWh basis. Typical payments for wind, which are made quarterly, range from 0.2/kWh to 1.5/kWh.

There is a $100 certification fee to get started with Mainstay Rewards. However, the fee may be paid with future green tag sales, and is generally waived for participants who opt for 10-year contracts.

The requirements are:

  1. The system must be grid-connected;
  2. Net-metering by the utility does not restrict the system owner from selling green tags;
  3. The system owner must have title to the green tags or renewable energy credits. They cannot have been sold or transferred to any other entity;
  4. The system must be a new renewable, powered up on or after 1/1/1999.
  5. For any systems over 10 kW, the system generation must be metered separately. For systems under 10 kW, separate metering is not necessary. Payments are made based on estimated production.
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