The Taxation of Wind Energy

September 2019
Stephanie Leiser

The generation of energy from wind turbines is becoming increasingly common as utilities and consumers seek to integrate alternative energy sources into power grids. However, the complex economic aspects of wind energy, such as up-front capital costs and positive and negative externalities, has left state and local governments trying to determine how to tax it fairly. As a result, how wind turbines are taxed, and the subsequent effects on local governments and their residents, varies greatly from state to state. Drawing on the principles and methods of property tax policy, this paper surveys and categorizes the different tax treatments of wind turbines across states, and makes policy recommendations for more consistent and theory-driven taxation of wind energy.