It's almost like renting out my farm and still having it. And the cows don't seem to mind a bit. Leroy Ratzlaff, landowner/ farmer, South Dakota

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Until recently, a farm's value was assessed by soil and water conditions, but now wind conditions may be part of a farm's investment picture. As farming incomes drop and tax incentives and progressive legislation continue to entice the wind industry, wind power has emerged as a lucrative commodity. Increasingly, farmers and ranchers are looking to wind electricity for their own use and for commercial sale by leasing their lands for wind generation. Farmers are also developing wind cooperatives, whereby farmers own the projects and the wind- generated electricity.

$3,000 - $5,000 Per Turbine - and Rising

Farmers and ranchers who have discovered that crops can grow and cattle can graze among towering windmills are increasing the productivity of their land. Farmers lease their lands to wind developers for either a set rental per turbine or for a small percentage of gross annual revenue from the project. Farmers generally find leasing their land for wind power projects is more economical than owning the turbines because the wind power industry can better address the costs, technical issues, tax advantages and risks of wind projects.

Although leasing arrangements vary widely, the U.S. Government Accountability Office report to the U.S. Senate in 2004 stated that a farmer who leases land to a wind project developer can generally expect to obtain royalties of $3,000 to $5,000 per turbine per year in lease payments, depending on factors such as the size of the project, the capacity of the turbines, and the amount of electricity produced. The figures quoted are rising as larger wind turbines are being produced and installed. Considering that the term of a lease is approximately 25 years, farmers and ranches who make lease arrangements can rely on a stable, automatic income stream for many years, despite the swings in commodity prices.

Yep, they make some noise, but it's the soothing sound of money being made. Louis Woodward, rancher

Farm Bill 2002

Solar, wind, biomass and related renewable energy resources are very compatible with rural areas, and can be used to generate economic growth in these areas. Solar San Antonio

The Farm Security and Rural Investment Act of 2002 authorized $115 million for the U.S. Department of Agriculture (USDA) to provide assistance for renewable energy projects, including wind power. Section 9006 of the bill directed the USDA to create a program to help farmers, ranchers and rural small businesses pay for renewable energy and energy efficiency projects. The 2006 program offered both grants and guaranteed loans for eligible projects.

To assist the USDA in interpreting Section 9006, the GAO published a report, Wind Power's Contribution to Electric Power Generation, which examines the various aspects of leasing land for wind turbines.

Natural Gas Savings

Every megawatt of electricity that is generated by wind energy helps hold down the price of natural gas, which benefits rural economies. Dan McGuire, American Corn Growers Foundation

Increasingly, farmers and ranchers are placing small-scale wind turbines on their farms for their own use. As natural gas prices rise, farm and ranch operations face higher utility bills, production costs and higher fertilizer prices. Unlike gas-fueled electricity, which is subject to market fluctuations, wind energy costs are predictable over time. Once a plant is built, the cost of producing electricity is stable, and the fuel source is free. As wind farms generate electricity, natural gas supplies are conserved, used only to supplement wind-generated power.

Natural gas is the primary cost factor in nitrogen fertilizer, so every megawatt of electricity that is generated by wind energy helps hold the price of natural gas down, benefiting farmers and communities. Propane prices are also tied to natural gas prices; farmers use propane for space heating and grain drying. Many farmers also use irrigation wells with natural gas engines.

Reasons to Stay

Wind energy has provided jobs so that our young people could come back home to live and raise their families. Sherry Phillips, McCamey Mayor

Our ranch just makes a profit. This year, the cows aren't making any money because there's no grass. But the wind farm is total profit without any work. Texas rancher

Earning income from wind generation isn't just a dream anymore as more and more rural landowners are leasing out their lands for wind generation. Wind projects contribute to sales, property, and state taxes. Furthermore, the increased revenue benefits local services such as schools, health care facilities, and roads. Local labor is often used for project construction, like building roads and erecting turbines. Once the projects are complete, jobs are created in the operation and maintenance of the projects.

Resources

Electricity from the Wind: What Landowners Should Know
This is a U.S. Department of Energy fact sheet.

Small Wind Systems Links Wind Energy in the Farm Bill
A Windustry web site.

Local Benefits of Wind Power: Rural Economic Development
This Windustry web site offers a list of publications, case studies, fact sheets, and websites that include more information about the economic development potential and reality of wind power.

Community Wind Energy
A Windustry web site. Locally owned and community based wind projects can generate both revenue and electricity while keeping energy dollars local and not polluting the air and water. Community wind projects are already working for farmers, local utilities, schools, and other community organizations.

Wind Farmers Network Forum 2002 Farm Bill Initiative, Section 9006: Renewable Energy
The USDA's 2002 Farm Bill's Renewable Energy web site.

Wind Energy Easements and Leases: Compensation Packages
In an effort to help landowners make informed decisions based on realistic expectations, Windustry published this report which gives current figures and factors that influence compensation packages.

American Corn Growers Foundation
The American Corn Growers Foundation, through its Wealth From The Wind Program provides information, education and outreach project aimed at developing the economic and environmental potential of wind power generation for the economic benefit of farmers and rural communities.

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