Background: HF 1455, recently introduced by Rep. David Bly (D) and Rep. Rod Hamilton (R), and SF 1657, introduced by Sen. Kevin Dahle (D), propose a state Rural Distributed Generation Tax Credit. The bills would provide farms and rural small businesses with a 30% tax credit on the capital and installation costs for small-scale wind turbines (up to 40 kW), solar thermal arrays, or geothermal heat exchangers.

Family farms and rural businesses are best poised to implement distributed generation renewable energy systems. These entities readily meet the spatial requirement, property line setbacks, permitted use, and accessory use definitions established in zoning codes and are also located away from natural gas lines. Livestock operations are among the large energy consumers in rural Minnesota as well. Electricity consumers in rural areas pay higher electricity rates and service charges than investor-owned ratepayers due to economics involved in servicing fewer customers per mile of electrical line.

The Rural Distributed Generation Tax Credit would reduce the cost of the investment to accelerate the payback and enable diversification of farm and rural small business income.

Community Wind Gardens would allow individual Xcel Energy utility customers to buy into a local wind project and receive a credit on their utility bill according to how much energy their share of the project produces each month. This would enable all customers, including those who can’t install their own wind turbine (i.e. renters and people in low wind areas), to invest in local wind projects and reduce their utility bills.