Wind is Cheap. Now's the Time to Buy.

According to the latest research from the Lawrence Berkeley National Lab, "the national average level-through price of wind PPAs [power purchase agreements] within the Berkeley Lab sample has dropped to around the $20/MWh level, inclusive of the federal production tax credit (PTC)."

In late 2015, the United States' Congress passed long-term extensions of key federal tax incentives for renewable energy resources. As part of the overall legislative package, Congress also passed a long-term phaseout of the federal Production Tax Credit (PTC) for wind energy. Because of the PTC phaseout, there is a real urgency for wind farm development to begin as soon as possible. Electric utilities that delay purchase of wind energy resources may end up losing hundreds of millions, if not billions of dollars in ratepayer savings due to a reduction in the federal PTC value.

Fast Movers Save Millions.

Already in 2016, over 1.5 gigawatts of renewable energy requests for proposals (RFPs) have been announced by a variety of southern electric utilities. But the time to take advantage of the PTC is rapidly running out. Delays in the procurement process run the risk of pushing construction into the subsequent year, resulting in a loss of 20% of the PTC value that for each additional year, until it is completely eliminated for new wind farm projects that begin construction in 2020. By delaying a single year, utilities could lose at least $21.7 million on 100 megawatts of wind energy.  
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Contract Today.
​Deliver Later. 

New guidance from the Internal Revenue Service (IRS) allows wind farm developers to qualify for the PTC, with delivery for up to four years later. In effect, utilities and other wind energy purchasers can sign contracts and PPAs in 2016, and take delivery as late as December 31, 2020. 

Smart wind energy customers should weigh the absolute lowest cost of wind energy today, against expected energy prices of the near future (perhaps 2020). 

Bigger is Better.

Utilities that limit the size of proposals are hurting their bottom line. Arbitrary RFP restrictions, particularly size limits, will exclude exceptional wind power proposals. Wind farms can achieve economies of scale and reduce prices. Based on actual total installed price comparisons, wind farm projects with an installed capacity between >20 MW & ≤50 MW are roughly 20% higher cost than projects with >100 MW capacity. In effect, placing arbitrary restrictions in RFPs potentially raises the price of wind power proposals. Already, average PPA’s across the South’s existing 3.5 GW of wind power contracts are over 124 MW.