WIND ENERGY

Additional Actions 

Could Help Ensure 

Effective Use of 

Federal Financial 

Support

Report to Congressional Requesters

March 2013

GAO-13-136

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-13-136, a report to 

congressional requesters

March 2013

WIND ENERGY

Additional Actions Could Help Ensure Effective Use 

of Federal Financial Support

Why GAO Did This Study

Wind energy has been the fastest 

growing source of U.S. electric power 

generation in recent years. The 

increase in federal funding for wind 

technologies and involvement of 

multiple agencies has raised questions 

about fragmented, overlapping, or 

duplicative federal support. 

In this report, GAO examines federal 

wind-related initiatives—programs or 

groups of agency activities that 

promoted wind energy through a 

specific emphasis or focus. GAO (1) 

identifies wind-related initiatives 

implemented by federal agencies in 

fiscal year 2011 and their key 

characteristics; (2) assesses the extent 

of fragmentation, overlap, and 

duplication, if any, among these 

initiatives, and the extent to which they 

were coordinated; and (3) examines 

how agencies allocate support to 

projects through their initiatives and the 

extent to which they assess applicant 

need for support. GAO sent a 

questionnaire to agencies to identify 

wind-related initiatives and to obtain 

data on their characteristics; potential 

for fragmentation, overlap, or 

duplication; and related coordination. 

GAO also reviewed studies of the 

initiatives and interviewed agency 

officials and financial professionals.

What GAO Recommends

GAO recommends that to the extent 

possible within their statutory authority 

DOE and USDA formally assess and 

document whether the federal financial 

support of their initiatives is needed for 

applicants’ wind projects to be built.

DOE agreed with the recommendation 

and USDA generally concurred with 

the findings related to its initiatives.

What GAO Found

GAO identified 82 federal wind-related initiatives, with a variety of key 

characteristics, implemented by nine agencies in fiscal year 2011. Five 

agencies—the Departments of Energy (DOE), the Interior, Agriculture (USDA), 

Commerce, and the Treasury—collectively implemented 73 of the initiatives. The 

82 initiatives incurred about $2.9 billion in wind-related obligations and provided 

estimated wind-related tax subsidies totaling at least $1.1 billion in fiscal year 

2011, although complete data on wind-related tax subsidies were not available. 

Initiatives supporting deployment of wind facilities, such as those financing their 

construction or use, constituted the majority of initiatives and accounted for 

nearly all obligations and estimated tax subsidies related to wind in fiscal year 

2011. In particular, a tax expenditure and a grant initiative, both administered by 

Treasury, accounted for nearly all federal financial support for wind energy. 

The 82 wind-related initiatives GAO identified were fragmented across agencies, 

most had overlapping characteristics, and several that financed deployment of 

wind facilities provided some duplicative financial support. The 82 initiatives were 

fragmented because they were implemented across nine agencies, and 68 

overlapped with at least one other initiative because of shared characteristics. 

About half of all initiatives reported formal coordination. Such coordination can, in 

principle, reduce the risk of unnecessary duplication and improve the 

effectiveness of federal efforts. However, GAO identified 7 initiatives that have 

provided duplicative support—financial support from multiple initiatives to the 

same recipient for deployment of a single project. Specifically, wind project 

developers have in many cases combined the support of more than 1 Treasury 

initiative and, in some cases, have received additional support from smaller grant 

or loan guarantee programs at DOE or USDA. GAO also identified 3 other 

initiatives that did not fund any wind projects in fiscal year 2011 but that could, 

based on their eligibility criteria, be combined with 1 or more initiatives to provide 

duplicative support. Of the 10 initiatives, those at Treasury accounted for over 95 

percent of the federal financial support for wind in fiscal year 2011. 

Agencies implementing the 10 initiatives allocate support to projects on the basis 

of the initiatives’ goals or eligibility criteria, but the extent to which applicant 

financial need is considered is unclear. DOE and USDA—which have some 

discretion over the projects they support through their initiatives—allocate 

support based on projects’ ability to meet initiative goals such as reducing 

emissions or benefitting rural communities, as well as other criteria. Both 

agencies also consider applicant need for the support of some initiatives, 

according to officials. However, GAO found that neither agency documents 

assessments of applicant need; therefore the extent to which they use such 

assessments to determine how much support to provide is unclear. Unlike DOE 

and USDA, Treasury generally supports projects based on the tax code’s 

eligibility criteria and does not have discretion to allocate support to projects 

based on need. While the support of these initiatives may be necessary in many 

cases for wind projects to be built, because agencies do not document 

assessments of need, it is unclear, in some cases, if the entire amount of federal 

support provided was necessary. Federal support in excess of what is needed to 

induce projects to be built could instead be used to induce other projects to be 

built or simply withheld, thereby reducing federal expenditures. 

View GAO-13-136. For more information, 

contact Frank Rusco at (202) 512-3841 or 

ruscof@gao.gov. 
Page i GAO-13-136 Wind Energy

Letter 1 

Background 6

Multiple Federal Agencies Promoted Wind Energy in Fiscal Year 

2011 through Numerous Initiatives Mainly Supporting 

Deployment 10

Initiatives Were Fragmented and Had Overlapping Characteristics 

with Half Reporting Coordination, but Several Provided Some 

Duplicative Financial Support for Deployment 20

Agencies Support Projects on the Basis of Initiatives’ Goals or 

Eligibility Criteria, but the Extent to Which Agencies Assess 

Applicant Need Is Unclear 36

Conclusions 42

Recommendation for Executive Action 43

Agency Comments and Our Evaluation 44

Appendix I Objectives, Scope, and Methodology 46

Appendix II Federal Wind-Related Initiatives 53

Appendix III Estimated Revenue Losses for Treasury’s Wind-Related Tax 

Expenditures 80

Appendix IV GAO’s Questionnaire for Federal Agencies with Wind-Related 

Initiatives 81

Appendix V Comments from the Department of Energy 92

Appendix VI GAO Contact and Staff Acknowledgments 94

Contents 
Page ii GAO-13-136 Wind Energy

Tables

Table 1: Actual and Estimated Obligations for Activities 

Specifically Related to Wind, by Agency, in Fiscal Year 

2011 14

Table 2: Number and Percentage of Federal Wind-Related 

Initiatives Supporting Each Wind Issue in Fiscal Year 2011 15

Table 3: Number and Percentage of Federal Wind-Related 

Initiatives Supporting Each Technology Advancement 

Activity in Fiscal Year 2011 16

Table 4: Ten Initiatives That Have Provided or Could Provide 

Duplicative Financial Support for Deployment of Wind 

Facilities 29

Table 5: U.S. Department of Agriculture (USDA) Wind-Related 

Initiatives 53

Table 6: Department of Commerce Wind-Related Initiatives 58

Table 7: Department of Energy (DOE) Wind-Related Initiatives 61

Table 8: Department of the Interior Wind-Related Initiatives 67

Table 9: Department of the Treasury Wind-Related Initiatives 73

Table 10: Environmental Protection Agency (EPA) Wind-Related 

Initiatives 77

Table 11: Federal Energy Regulatory Commission Wind-Related 

Initiatives 78

Table 12: National Science Foundation (NSF) Wind-Related 

Initiatives 78

Table 13: Small Business Administration (SBA) Wind-Related 

Initiatives 79

Table 14: Estimated Revenue Losses for Treasury’s Wind-Related 

Tax Expenditures in Fiscal Year 2011 80

Figures

Figure 1: New Wind Energy Capacity Additions and Production Tax 

Credit Expirations, 1999 through 2012 8

Figure 2: Number of Federal Wind-Related Initiatives by Agency, in 

Fiscal Year 2011 11

Figure 3: Number of Federal Wind-Related Initiatives at Five Lead 

Agencies, by Agency and Technology Advancement 

Activity Supported 19
Page iii GAO-13-136 Wind Energy

Figure 4: Examples of Federal and State Initiatives Available in 

Fiscal Year 2011 to Provide Financial Support for 

Deployment of Utility-Scale Land-Based Wind Facilities by 

Energy Companies 23

Abbreviations

accelerated depreciation Accelerated Depreciation Recovery Periods

 for Specific Energy Property

BOEMRE Bureau of Ocean Energy Management, 

 Regulation and Enforcement

Commerce Department of Commerce

DOE Department of Energy

DSIRE Database of State Incentives for 

 Renewables and Efficiency

EERE Office of Energy Efficiency and Renewable 

 Energy

EIA Energy Information Administration

EPA Environmental Protection Agency

FERC Federal Energy Regulatory Commission

Interior Department of the Interior

IRS Internal Revenue Service

ITC Energy Investment Credit, also known as 
Page iv GAO-13-136 Wind Energy

 the Investment Tax Credit

LBNL Lawrence Berkeley National Laboratory

NSF National Science Foundation

PTC Energy Production Credit, also known as 

 the Production Tax Credit

REAP Rural Energy for America Program

Recovery Act American Recovery and Reinvestment Act 

 of 2009

RPS Renewable Portfolio Standard

SBA Small Business Administration

Section 1603 program Payments for Specific Energy Property in 

 Lieu of Tax Credits

Section 1703 program Title XVII Section 1703 Loan Guarantee 

 Program

Section 1705 program Title XVII Section 1705 Loan Guarantee 

 Program

Treasury Department of the Treasury

USDA U.S. Department of Agriculture

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-13-136 Wind Energy

United States Government Accountability Office

Washington, DC 20548

March 11, 2013

The Honorable Lamar Smith

Chairman

Committee on Science, Space, and Technology

House of Representatives

The Honorable Cynthia M. Lummis

Chairman

Subcommittee on Energy

Committee on Science, Space, and Technology

House of Representatives

The Honorable Paul Broun, M.D.

Chairman

Subcommittee on Oversight

Committee on Science, Space, and Technology

House of Representatives

Americans’ daily lives, as well as the economic productivity of the United 

States, depend on the availability of energy, the majority of which comes 

from fossil fuels. However, concerns over the nation’s reliance on 

imported oil, volatile energy costs, and fossil fuels’ emissions of 

greenhouse gases linked to global climate change have increased the 

focus on developing renewable energy resources to help meet future 

energy needs. One of these resources—wind energy—has been the 

fastest growing source of U.S. electric power generation in recent years, 

increasing at about 33 percent per year since 2001, according to the 

Department of Energy’s (DOE) Energy Information Administration (EIA), 

an independent statistical and analytical agency. In 2011, wind energy 

comprised 32 percent of all new additions to U.S. electric generating 

capacity and contributed 3.0 percent of our nation’s total electricity 

generation, the largest share of any nonhydroelectric renewable source. 

While helping meet the nation’s energy needs, wind energy may offer 

substantial environmental benefits as well, such as a reduction in 

greenhouse gas emissions, compared with traditional energy sources. 

However, wind energy as a source of electricity also faces numerous 

challenges related to its intermittent availability and historically higher 

costs compared with traditional energy sources.

In support of efforts to research, develop, and deploy wind energy 

technologies, the federal government provided nearly $5 billion in 

 
 

Page 2 GAO-13-136 Wind Energy

subsidies in fiscal year 2010—more than 75 percent of federal subsidies 

for all renewable sources of electricity, according to EIA estimates.1 Of 

this amount, about $4.9 billion was related to the American Recovery and 

Reinvestment Act of 2009 (Recovery Act).2 By contrast, in fiscal year 

2007—the previous year for which EIA analyzed these data—EIA 

estimated the federal government provided $476 million to support wind 

energy technologies.3 This funding has helped spur development of wind 

energy in the United States, helping to meet goals (e.g., for energy 

security) established by federal agencies and policymakers. DOE has a 

leading role in committing federal resources and expertise to research, 

develop, and deploy wind energy technologies, as part of its mission to 

address the nation’s energy and environmental challenges through 

science and technology. The Department of the Treasury (Treasury), 

meanwhile, provides large tax subsidies for wind energy technologies, 

through its administration of provisions in the federal Internal Revenue 

 

1

Although this report focuses on federal support for wind energy, the federal government 

has provided substantial support for other renewable and fossil energy sources as well as 

nuclear energy. We have recently examined support for some of these energy sources 

and have other ongoing work in the area that will address federal subsidies for energy. 

See GAO, Solar Energy: Federal Initiatives Overlap but Take Measures to Avoid 

Duplication, GAO-12-843 (Washington, D.C.: Aug. 30, 2012); GAO, Batteries and Energy 

Storage: Federal Initiatives Supported Similar Technologies and Goals but Had Key 

Differences, GAO-12-842 (Washington, D.C.: Aug. 30, 2012); GAO, Research and 

Development: DOE Could Enhance the Project Selection Process for Government Oil and 

Natural Gas Research, GAO-09-186 (Washington, D.C.: Dec. 29, 2008); GAO, Oil and 

Gas Royalties: The Federal System for Collecting Oil and Gas Revenues Needs 

Comprehensive Reassessment, GAO-08-691 (Washington, D.C.: Sept. 3, 2008).

2

Pub. L. No. 111-5, 123 Stat. 115 (2009).

3

The subsidies for wind energy reported in fiscal years 2007 and 2010 may not be directly 

comparable due to differences in available incentives during the 2 years. Specifically, 

beginning in 2009, Section 1603 of the Recovery Act, which created Treasury’s Payments 

for Specific Energy Property in Lieu of Tax Credits initiative (Section 1603 program), 

allowed recipients to choose a direct grant in lieu of the Energy Production Credit (also 

known as the Production Tax Credit or PTC). The Section 1603 program, which was 

unavailable in 2007, and was popular with investors in fiscal year 2010, front-loads the 

government’s support for projects in the year that the grant is awarded, as opposed to the 

PTC, which spreads out support over 10 years. Thus, while both incentives may provide 

the same overall level of support to recipients, the amount of support provided in a given 

year will differ based on which incentive is taken.
 

Page 3 GAO-13-136 Wind Energy

Code.4 Other agencies play a role in supporting wind energy technologies 

as well; in February 2012, we reported that 23 federal agencies had 

implemented nearly 700 renewable energy initiatives—programs or 

groups of agency activities that involved renewable energy through a 

specific emphasis or focus—in fiscal year 2010.5 Many of these initiatives 

supported wind energy technologies. In addition, states also play an 

important role in encouraging development of wind and other renewable 

energy sources through policies and financial incentives. For example, 

many states have renewable portfolio standards (RPS) that require public 

utilities to generate or buy a percentage of energy from renewable 

sources.

In the current fiscally constrained environment, effective allocation of 

resources is especially important. The increase in funding for wind energy 

technologies and the involvement of multiple agencies have raised 

questions that federal efforts to support these technologies may be 

fragmented, overlapping, or duplicative. Fragmentation occurs when more 

than one federal agency, or more than one organization within an agency, 

is involved in furthering the development of wind energy. For purposes of 

this report, overlap occurs when multiple initiatives support similar wind 

issues,6 similar technology advancement activities,7 similar recipients, and 

have similar goals. As we have previously reported, fragmentation and 

overlap among government programs can potentially lead to unnecessary 

 

4

For purposes of this report, “tax subsidies” refer to the benefits provided to taxpayers 

who take advantage of tax expenditures, and thus pay lower taxes than they would 

otherwise have had to pay. Tax expenditures are provisions of federal tax laws that (1) 

allow a special exclusion, exemption, or deduction from gross income or (2) provide a 

special credit, preferential tax rate, or deferral of tax liability. Tax expenditures result in 

revenue losses for the federal government, which forgoes some of the tax revenues that it 

would have otherwise collected. See GAO, Government Performance and Accountability: 

Tax Expenditures Represent a Substantial Federal Commitment and Need to Be 

Reexamined, GAO-05-690 (Washington, D.C.: Sept. 23, 2005). 

5

GAO, Renewable Energy: Federal Agencies Implement Hundreds of Initiatives, 

GAO-12-260 (Washington, D.C.: Feb. 27, 2012).

6

For the purposes of this report, wind issues covered by wind-related initiatives include 

utility-scale land-based wind, distributed land-based wind (also known as small wind), 

offshore wind, transmission, grid integration, and siting and permitting.

7

For the purposes of this report, technology advancement activities include basic 

research, applied research, demonstration, commercialization, and deployment.
 

Page 4 GAO-13-136 Wind Energy

duplication.8 For purposes of this report, duplication occurs when multiple 

initiatives provide financial support to the same recipient for a single wind 

project. Duplication as we have defined it may be necessary, in some 

cases, for specific wind projects to be built. However, in other cases, 

duplication may result in ineffective use of federal financial support—that 

is, it may result in some amount of support being provided for specific 

wind projects that is not needed for them to be built.

In this report, we examine federal initiatives that promoted wind energy, 

which we termed “wind-related initiatives.”

9 Our objectives for this report 

were to (1) identify wind-related initiatives implemented by federal 

agencies in fiscal year 2011 and their key characteristics; (2) assess the 

extent of fragmentation, overlap, and duplication, if any, among these 

initiatives, and the extent to which they were coordinated; and (3) 

examine how agencies allocate support to projects through their initiatives 

and the extent to which they assess applicant need for support.

To address these objectives, we collected and analyzed information from 

our previous work and conducted new work. Our review focused on those 

initiatives that promoted the research and development, 

commercialization, or deployment of wind energy technologies in fiscal 

year 2011, the most recent year for which data were available. To identify 

these initiatives, we relied, in part, on data from our February 2012 report 

on renewable energy initiatives, which identified and collected information 

from wind- and other renewable energy-related initiatives active in fiscal 

year 2010. Using these data, we focused our review on research and 

development, commercialization, or deployment initiatives for which wind 

energy was eligible for support. In addition, we excluded certain 

agencies—such as the Departments of Defense, Homeland Security, and 

State—which have initiatives generally focused on development of wind 

energy and other technologies for use in a military, border security, or 

 

8

GAO, Managing for Results: Using the Results Act to Address Mission Fragmentation 

and Program Overlap, GAO/AIMD-97-146 (Washington, D.C.: Aug. 29, 1997). For more 

information on fragmentation, overlap, and duplication in federal programs see GAO, 

Opportunities to Reduce Potential Duplication in Government Programs, Save Tax 

Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011).

9

For purposes of this report, we defined a wind-related initiative as a program or group of 

agency activities serving a similar purpose or function that promoted wind energy 

technologies through a specific emphasis or focus, even if wind energy was only one part 

of a broader effort.
 

Page 5 GAO-13-136 Wind Energy

international aid setting, rather than for use in the domestic commercial 

energy market.

For the remaining agencies, we developed a questionnaire to collect 

information from their officials regarding whether their fiscal year 2010 

initiatives were still active and whether wind energy still received or was 

eligible for support under the initiatives in fiscal year 2011. We also asked 

agency officials to identify any additional initiatives that were active and 

for which wind energy was eligible for support in fiscal year 2011. Using 

the responses from this questionnaire, we identified 82 wind-related 

initiatives at nine agencies. We then developed a second questionnaire 

and administered it to agency officials to collect additional data on the 

characteristics of these initiatives; potential fragmentation, overlap, or 

duplication among them; and efforts to coordinate the initiatives. 

Specifically, we asked questions regarding initiatives’ obligations, or 

revenue losses from tax expenditures;10 year in which the initiatives first 

supported wind energy; type of wind issues, technology advancement 

activities, and recipients supported; initiative goals; and efforts to 

coordinate with other wind-related initiatives. We received survey 

responses from all 82 initiatives and therefore had a response rate of 100 

percent. (For further information on our objectives, scope, and 

methodology, including the use of our questionnaire, see app. I. For a 

copy of our questionnaire, see app. IV.) We then analyzed the data 

collected from the questionnaire to categorize initiatives’ recipients and 

goals, and to determine the extent of potential fragmentation, overlap, 

and duplication of wind-related initiatives. For selected initiatives, we 

collected information from agency websites on financial support provided 

for projects, and we interviewed agency officials for information on their 

agencies’ efforts to assess applicants’ need for the support of their 

initiatives. We also reviewed studies of the initiatives by DOE’s national 

laboratories, the Congressional Research Service, and other experts. We 

interviewed financial professionals from several of the major financial 

institutions and legal firms active in wind energy project financing in 

recent years. To obtain additional information about the types of support 

 

10A revenue loss is the amount of revenue that the government forgoes as the result of 

each special provision in the tax code. Revenue loss is estimated for each tax expenditure 

separately by comparing the revenue raised under current law with the revenue that would 

have been raised if the provision did not exist (assuming that taxpayer behavior and all 

other tax and spending provisions remain constant). Revenue loss estimates do not 

incorporate any behavioral responses and thus do not necessarily represent the exact 

amount of revenue that would be gained if a specific tax expenditure were repealed. 
 

Page 6 GAO-13-136 Wind Energy

available to wind project developers, we collected and analyzed data from 

the Database of State Incentives for Renewables and Efficiency (DSIRE), 

a comprehensive source of information on state incentives and policies 

that promote renewable energy and energy efficiency, which is funded by 

DOE. We interviewed researchers who developed and maintain DSIRE 

and determined the data were sufficiently reliable for our purposes. We 

also interviewed agency officials and financial professionals for additional 

information on state initiatives.

We conducted this performance audit from February 2012 to March 2013 

in accordance with generally accepted government auditing standards.

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

Wind energy is generated when wind turbines convert the kinetic energy 

in the wind into mechanical power, which can be used to generate 

electricity or for specific tasks such as grinding grain or pumping water. 

Electricity generated from wind can be used for other stand-alone 

purposes, such as charging a battery, or can flow to consumers from the 

facilities where it is generated through the networks that carry electricity, 

including wires, substations, and transformers (i.e., the grid). For utilityscale sources of wind energy, a large number of turbines are usually built 

close together to form a wind farm that provides grid power.11 Stand-alone 

or distributed turbines are generally smaller scale turbines used for 

purposes such as powering communications equipment or generating 

electricity for local use by farmers. Areas with plentiful wind resources are 

often distant from consumer markets, and access to transmission is 

essential to bring electricity generated from wind to market. In addition, 

because of the intermittent availability of wind energy, integrating 

increasing amounts of wind energy into the electric grid while maintaining 

its reliable operation requires added efforts by federal agencies, electric 

 

11In the United States, all utility-scale wind farms currently in place are built on land. 

Offshore wind turbines are utility-scale turbines that capture wind resources over bodies of 

water and convert this wind into electricity. Although there are currently no offshore wind 

turbines in United States, there are federal, regional, and state-level efforts intended to 

facilitate their development.

Background 
 

Page 7 GAO-13-136 Wind Energy

grid operators, utilities, and regulators. Another important issue in the 

development of wind projects is the siting and permitting process, by 

which locations are chosen and permits are issued for wind turbines, 

while considering projects’ potential effects on the environment and the 

competing uses for the land, airspace, or waterways the projects may 

require.

Innovation in wind energy technology takes place across a spectrum of 

activities, which we refer to as technology advancement activities, and 

which include basic research, applied research, demonstration, 

commercialization, and deployment.12 For purposes of this report, basic 

research includes efforts to explore and define scientific or engineering 

concepts or to investigate the nature of a subject without targeting any 

specific technology; applied research includes efforts to develop new 

scientific or engineering knowledge to create new and improved 

technologies; demonstration includes efforts to operate new or improved 

technologies to collect information on their performance and assess 

readiness for widespread use; commercialization includes efforts to 

transition technologies to commercial applications by bridging the gap 

between research and demonstration activities and venture capital 

funding and marketing activities; and deployment includes efforts that 

facilitate or achieve widespread use of technologies in the commercial 

market.

Wind energy technology advancement activities are financed through 

both public and private investment. According to a Congressional Budget 

Office report,13 without public investment, the private sector’s investment 

in technology advancement activities is likely to be inefficiently low from 

 

12We developed definitions that could be applied broadly to make comparisons across 

agencies and that covered the full spectrum of advancement activities. Federal agencies 

use various definitions and categories for describing the stages of technology 

advancement. For example, DOE uses technology readiness level categories and 

definitions to measure and communicate technology readiness for first-of-a-kind 

technology applications. In addition, the Office of Management and Budget provides 

federal definitions for the terms basic research, applied research, and development in 

Office of Management and Budget Circular A–11, Section 84—Character Classification 

(Schedule C) but does not provide definitions for demonstration activities, 

commercialization, or deployment. During pretests of our questionnaire, agency officials 

were able to fit their initiatives’ activities within the categories that we defined.

13Congressional Budget Office, Federal Financial Support for the Development and 

Production of Fuels and Energy Technologies (Washington, D.C.: March 2012).
 

Page 8 GAO-13-136 Wind Energy

society’s perspective because firms cannot easily capture the “spillover 

benefits” that result, particularly at the early stages of developing a 

technology. In these stages, technology advancement activities can 

create fundamental knowledge leading to numerous benefits for society 

as a whole but not necessarily for the firms that invested in the activities. 

For example, basic research can create general scientific knowledge that 

is not itself subject to commercialization but that can lead to multiple 

applications that private companies can produce and sell. As activities get 

closer to the commercialization and deployment stages, the private sector 

may increase its support because its return on investment is likely to 

increase.

Federal investment and policies can have a significant impact on wind 

development. For example, a key tax incentive for the construction of 

wind projects—the Energy Production Credit (also known as the 

Production Tax Credit, or PTC)—has periodically expired and then been 

extended. In years following its expiration, new additions of wind energy 

capacity fell dramatically, as shown in figure 1 below.

Figure 1: New Wind Energy Capacity Additions and Production Tax Credit

Expirations, 1999 through 2012
 

Page 9 GAO-13-136 Wind Energy

a

These data reflect net summer capacity—the maximum output that generating equipment can supply 

during the period of summer peak demand from June 1 through September 30.

b

There was no expiration of the PTC immediately prior to 2010; however, the economic downturn and 

an uncertain regulatory environment (particularly relating to the renewal of production and investment 

tax credits) contributed to a lower level of wind capacity additions in 2010, according to EIA. 

c

Data for 2011 are preliminary. Final data were not available as of November 2012.

d

Data for 2012 are projected. Actual data were not available as of November 2012. New wind energy 

capacity installations may be considerably larger in 2012 than this projection shows. For example, the 

American Wind Energy Association reports that 4,728 MW of wind energy were installed through the 

first three quarters of 2012, and there were an additional 8,430 MW under construction as of the third 

quarter of 2012. In addition, according to DOE, new capacity additions in 2012 were anticipated to 

exceed 2011 levels and perhaps even 2009 levels as developers rushed to commission projects 

before the scheduled expiration of several federal tax incentives for wind energy at the end of 2012.

e

The PTC for wind projects was extended on January 2, 2013, by the American Taxpayer Relief Act 

of 2012 for facilities that begin construction by December 31, 2013.

Many states have also enacted policies affecting the development of wind 

energy, in part to attract investment within their borders. These policies 

include tax credits, grants, loans, and mandates such as RPSs requiring 

a portion of the electricity consumed or generated in a state to be from 

renewable sources.

Improvements in technology and external market factors also affect the 

development of wind energy. According to a report from DOE’s Office of 

Energy Efficiency and Renewable Energy (EERE), recent improvements 

in the cost and performance of wind energy technologies contributed to 

the growth of wind energy in 2011.14 For example, improvements such as 

taller towers and larger rotor diameters in wind turbines have improved 

their efficiency. However, according to the EERE report, continued low 

natural gas prices and modest growth in electricity demand, among other 

factors, may dramatically slow new installations of wind turbines in 2013.

In addition, wind energy must compete in the market with other energy 

sources—renewable and nonrenewable—that are also receiving 

subsidies. For example, in a 2011 report, EIA estimated that the federal 

government provided nearly $6.7 billion in subsidies for coal, natural gas, 

petroleum liquids, and nuclear energy in fiscal year 2010.15

 

14DOE, 2011 Wind Technologies Market Report (Washington, D.C.: 2012).

15DOE, Energy Information Administration, Direct Federal Financial Interventions and 

Subsidies in Energy in Fiscal Year 2010 (Washington, D.C.: 2011).
 

Page 10 GAO-13-136 Wind Energy

We identified 82 federal wind-related initiatives, with a variety of key 

characteristics, implemented by nine agencies in fiscal year 2011.16 Five 

agencies—DOE, the Department of the Interior (Interior), the Department 

of Agriculture (USDA), the Department of Commerce (Commerce), and 

Treasury—collectively implemented 73 of these initiatives. In fiscal year 

2011, wind-related initiatives incurred about $2.9 billion in obligations for 

activities specifically related to wind. In addition to initiatives that obligated 

funds, Treasury’s wind-related tax expenditure initiatives provided 

estimated tax subsidies of at least $1.1 billion for activities specifically 

related to wind, although complete data on wind-related tax subsidies 

were not available.17 The initiatives supported a range of wind issues, 

including siting and permitting, offshore wind, and, most commonly, utilityscale and distributed land-based wind. They also supported a range of 

technology advancement activities, from basic and applied research to, 

most commonly, deployment. The majority of initiatives provided funding 

or other direct support for energy providers, developers, or 

manufacturers, and less than half of the initiatives supported other types 

of recipients such as public and private researchers or individuals. 

Initiatives supporting deployment accounted for all tax subsidies and 

nearly all obligations related to wind in fiscal year 2011. In particular, a tax 

expenditure and a grant initiative, both at Treasury, accounted for nearly 

all federal financial support related to wind.

 

16Our review focused on initiatives that promoted the research and development, 

commercialization, or deployment of wind energy technologies in fiscal year 2011. In 

addition, we excluded certain agencies—such as the Departments of Defense, Homeland 

Security, and State—which have initiatives generally focused on development of wind 

energy and other technologies for use in a military, border security, or international aid 

setting, rather than for use in the domestic commercial energy market. We also excluded 

the Departments of Transportation and Housing and Urban Development because their 

initiatives focused on commercialization and deployment of renewable energy projects on 

buildings, projects that typically use solar energy.

17The federal obligations and tax subsidies for fiscal year 2011 presented here cannot be 

compared to the Energy Information Administration’s (EIA) estimate of $5 billion in total 

federal subsidies for wind in fiscal year 2010 because of differences in the time period and 

methods used in calculating these numbers. For instance, EIA measured subsidies on the 

basis of the cost of the programs to the federal budget as provided in budget documents 

from the Office of Management and Budget and the Joint Committee on Taxation. Our 

data and analysis of obligations and tax subsidies was based on agency questionnaire 

responses and interviews with officials.

Multiple Federal 

Agencies Promoted 

Wind Energy in Fiscal 

Year 2011 through 

Numerous Initiatives 

Mainly Supporting 

Deployment 
 

Page 11 GAO-13-136 Wind Energy

Of the nine agencies that implemented the 82 federal wind-related 

initiatives we identified in fiscal year 2011, five lead agencies—DOE, 

Interior, USDA, Commerce, and Treasury—were collectively responsible 

for 73 (89 percent) of the initiatives. (See app. II for a full list of the 

initiatives.) The remaining four agencies—the Environmental Protection 

Agency (EPA), the Federal Energy Regulatory Commission (FERC), the 

National Science Foundation (NSF), and the Small Business 

Administration (SBA)—each had three or fewer initiatives. Figure 2 shows 

the number of initiatives by agency. 

Figure 2: Number of Federal Wind-Related Initiatives by Agency, in Fiscal Year 2011

Around half of the initiatives—43 of 82—began supporting wind energy in 

fiscal year 2008 or before. For instance, the PTC, which provides an 

income tax credit based on the amount of energy produced at wind and 

other qualified facilities, was first enacted under the Energy Policy Act of 

1992. However, several key initiatives began supporting wind energy 

more recently as part of the Recovery Act or other recent legislation. For 

instance, Section 1603 of the Recovery Act created Treasury’s Payments 

for Specific Energy Property in Lieu of Tax Credits initiative (Section 1603 

program), which provides cash payments of up to 30 percent of the total 

eligible costs of wind and certain other renewable energy facilities, in lieu 

of tax credits for energy investment or production. Key initiatives such as 

these and the PTC for wind facilities have recently expired or are 

Five Agencies 

Implemented Nearly All 

Initiatives and Were 

Responsible for Several 

Billion Dollars in Federal 

Support Related to Wind
 

Page 12 GAO-13-136 Wind Energy

scheduled to expire at the end of 2013. (See app. II for a full list of 

initiatives, including information on their expiration dates.)

The majority of the wind-related initiatives we identified supported a range 

of renewable energy sources in addition to wind, as well as other 

activities such as energy efficiency projects or rural development projects. 

Specifically, 16 initiatives (20 percent) supported wind energy either 

exclusively or primarily, and 51 initiatives (62 percent) supported other 

renewable energy sources or other activities either primarily or equally 

with wind energy.18 For instance, initiatives that exclusively or primarily 

supported wind energy included several under EERE’s Wind Energy 

Program that focused on research, development, and testing to improve 

the performance, lower the costs, and accelerate the deployment of wind 

technologies, and several at Interior’s Bureau of Ocean Energy 

Management, Regulation, and Enforcement (BOEMRE) that focused on 

facilitating the development of offshore wind through resource 

assessments, environmental impact studies, and granting of leases and 

rights-of-way for projects.19 In contrast, wind-related tax expenditures 

such as the PTC, as well as several initiatives enacted or expanded 

under the Recovery Act such as Treasury’s Section 1603 program, 

supported a range of renewable energy sources and, in some cases, 

other sources such as nuclear energy; energy efficiency projects related 

to buildings or vehicles; or carbon capture and storage projects involving 

coal or other fossil fuel sources.20

 

18In addition, agency officials for 18 percent of initiatives were not able to determine to 

what extent their initiatives supported wind energy relative to other sources of renewable 

energy or other activities. In some cases, officials were unable to make these 

determinations because of data limitations. For example, several initiatives did not track 

program data separately for each energy source.

19On October 1, 2011, BOEMRE reorganized into two independent entities: the Bureau of 

Ocean Energy Management and the Bureau of Safety and Environmental Enforcement. 

The Bureau of Ocean Energy Management is responsible for managing development of 

the nation’s offshore resources in an environmentally and economically responsible way, 

and its activities include oversight of leasing, environmental studies, and economic 

analysis. The Bureau of Safety and Environmental Enforcement is responsible for 

enforcing safety and environmental regulations. However, given the time frame of our 

work, we refer to BOEMRE in this report. 

20Carbon capture and storage is a process of separating carbon dioxide from other gases 

produced in fuel combustion and other industrial processes, transporting the carbon 

dioxide via pipeline to an underground storage location, and injecting and storing it longterm in underground geologic formations.
 

Page 13 GAO-13-136 Wind Energy

In responding to our questionnaire, agency officials reported that they 

obligated around $2.9 billion through their initiatives in fiscal year 2011 for 

activities specifically related to wind.21 These obligations data represent a 

mix of actual obligations and estimates.22 Officials for 39 initiatives (about 

48 percent) reported actual obligations, officials for 13 initiatives (about 16 

percent) reported estimated obligations, and officials for 21 initiatives 

(about 26 percent) were not able to provide estimated or actual 

obligations.23 Officials who provided estimates or were unable to provide 

obligations data noted that the accuracy or the availability of the 

obligations data was limited because, for example, isolating the 

obligations for activities specifically related to wind can be difficult. In 

addition, among the 21 initiatives for which no wind-specific obligations 

data were reported, agency officials for several of them reported, for 

example, that they recovered their costs from power customers, or they 

provided loan guarantees whose costs were offset by fees paid by 

lenders. As shown in table 1, Treasury was responsible for nearly 94 

percent of the total reported obligations (about $2.7 billion of $2.9 billion), 

all of which were due to its Section 1603 program.

 

21Nearly all of these obligations were incurred by initiatives established under the 

Recovery Act. However, the Recovery Act initiatives with the most obligations for activities 

specifically related to wind—Treasury’s Section 1603 program and DOE’s Title XVII 

Section 1705 Loan Guarantee Program—were alternatives to initiatives that were 

established prior to the Recovery Act—the PTC and Energy Investment Credit (also 

known as the Investment Tax Credit, or ITC), as well as the Title XVII Section 1703 Loan 

Guarantee Program. Some projects the Recovery Act initiatives supported in fiscal year 

2011 could have instead received support from the ongoing initiatives that existed prior to 

the act.

22As previously noted, most wind-related initiatives supported a range of energy sources 

in addition to wind. We asked agency officials to provide actual or estimated obligations 

data for their initiative’s activities that were specifically related to wind. In addition, unlike 

spending data presented in the President’s budget—which are estimated for fiscal years 

that are not completed at the time the budget is prepared—the estimated obligations data 

presented here are for completed fiscal years.

23In addition to the 21 initiatives for which no obligations data were reported, 9 of the 

initiatives (about 11 percent) for which officials did not provide obligations data were 

Treasury’s wind-related tax expenditures, discussed below. Note that the percentages add 

to 101 due to rounding.
 

Page 14 GAO-13-136 Wind Energy

Table 1: Actual and Estimated Obligations for Activities Specifically Related to Wind, by Agency, in Fiscal Year 2011

Agencya

Number of wind-related 

initiatives for which 

data were provided Actual obligations Estimated obligations Total obligations

Treasury 1 $2,716,933,281 $0 $2,716,933,281

DOE 17 73,940,581 73,161,968 147,102,549b

Interior 15 10,206,170 15,778,339 25,984,509

USDA 9 4,850,539 56,000 4,906,539c

Commerce 4 2,332,038 415,462 2,747,500

NSF 2 2,104,544 0 2,104,544

EPA 2 30,000 210,000 240,000

Total 50 $2,810,397,153 $89,621,769 $2,900,018,922 

Source: GAO analysis of agency-provided data. 

Note: Because we summarize obligations data by agency, agency-level data typically reflect a mix of 

actual and estimated obligations. However, obligations reported for any specific initiative are either 

actual or estimated. For instance, EPA’s data on its two initiatives above reflect one initiative for 

which actual obligations of $30,000 were reported, and one for which estimated obligations of 

$210,000 were reported.

a

In addition to the 50 initiatives at the seven agencies listed here, FERC did not provide obligations 

data for its one wind-related initiative because it noted that all costs to the government associated 

with the initiative are recovered through charges to regulated entities. SBA did not provide obligations 

data for either of its two initiatives because, according to agency officials, one initiative provided loan 

guarantees whose costs were offset by fees, and the second initiative was in the early planning 

stages in fiscal year 2011. 

b

Of the $147 million obligated by DOE for activities specifically related to wind in 2011, about $51 

million was obligated for credit subsidy costs—the government’s estimated net long-term cost, in 

present value terms, of the loans it guarantees as part of the Title XVII Section 1705 Loan Guarantee 

Program. Credit subsidy costs exclude administrative costs and any incidental effects on 

governmental receipts or outlays. Present value is the worth of the future stream of returns or costs in 

terms of money paid immediately. In calculating present value, prevailing interest rates provide the 

basis for converting future amounts into their current equivalents.

c

This amount does not reflect a guarantee for a $204 million loan provided for a wind project in fiscal 

year 2011 through USDA’s Direct and Guaranteed Electric Loan Program. USDA officials said that 

based on the historical performance of the loans and the creditworthiness of applicants for the 

program, they estimate zero credit subsidy costs for the program.

In addition, Treasury’s nine other wind-related initiatives were tax 

expenditures that provided estimated tax subsidies totaling at least $1.1 

billion for activities specifically related to wind, according to available 

estimates. This amount is based almost solely on subsidies provided 

through the PTC, which was the only one of these nine initiatives for 

which complete estimates of wind-specific tax subsidies were available 
 

Page 15 GAO-13-136 Wind Energy

for 2011.24 Both Treasury and the Joint Committee on Taxation develop 

estimates of tax subsidies provided through these tax expenditure 

initiatives; however, the initiatives support a range of renewable and other 

energy sources, and wind-specific estimates are not available for most of 

them. (See app. III for a list of these tax expenditures and the available 

estimates of revenue losses related to wind energy.)

The 82 initiatives we identified supported a range of issues related to 

wind, and most initiatives supported more than one wind issue. The wind 

issues most commonly supported were utility-scale land-based wind (49 

initiatives) and distributed land-based wind (45 initiatives). See table 2 

below for the number and percentage of initiatives supporting each wind 

issue.

Table 2: Number and Percentage of Federal Wind-Related Initiatives Supporting 

Each Wind Issue in Fiscal Year 2011

Wind issue

Number

of initiatives

Percentage

of initiatives

Utility-scale land-based wind 49 60

Distributed land-based wind 45 55

Offshore wind 38 46

Grid integration 37 45

Transmission 33 40

Siting and permitting 28 34

Source: GAO analysis of agency-provided data. 

Note: Because many wind-related initiatives supported multiple wind issues, the percentage of 

initiatives does not total 100, and the number of initiatives does not total 82, the number of initiatives 

identified in our review.

 

24In addition to the PTC, which provided an estimated $1.1 billion in wind-specific tax 

subsidies in 2011, the ITC provided less than $50 million in subsidies in 2011 for small 

wind properties—properties using wind turbines of 100 kilowatts or less—according to the 

Joint Committee on Taxation. However, this estimate does not include ITC support for 

larger wind properties. See Joint Committee on Taxation, Estimates of Federal Tax 

Expenditures for Fiscal Years 2011-2015, JCS-1-12 (Washington, D.C.: Jan. 17, 2012).

Also, Treasury has developed wind-specific estimates of subsidies from the Credit for 

Residential Energy Efficient Property, but the most recent year for which data are 

available is 2009. Treasury officials said these estimates are typically reported 2 years 

after the subsidies are provided. 

Initiatives Supported a 

Range of Wind Issues, 

Technology Advancement 

Activities, and Recipients
 

Page 16 GAO-13-136 Wind Energy

Individual initiatives tended to support a range of wind issues. 

Specifically, 63 initiatives (77 percent) supported more than one wind 

issue, and 46 of these (56 percent of all initiatives) supported three or 

more wind issues.25 For instance, USDA’s High Energy Cost Grant 

Program provides grants for energy facilities and infrastructure serving 

rural communities with average home energy costs exceeding 275 

percent of the national average. Officials responding to our questionnaire 

reported that these grants can support utility-scale and distributed landbased wind, transmission, and grid integration. Similarly, DOE’s State 

Energy Program provides financial and technical assistance to state 

governments for a variety of renewable energy-related activities across all 

six wind issues, according to agency officials.

The 82 initiatives we identified also supported technology advancement 

activities ranging from basic and applied research through deployment, 

which was the most commonly supported technology advancement 

activity; 58 initiatives (71 percent) included support for deployment. See 

table 3 below for the number and percentage of initiatives supporting 

each technology advancement activity.

Table 3: Number and Percentage of Federal Wind-Related Initiatives Supporting 

Each Technology Advancement Activity in Fiscal Year 2011

Technology

advancement activity

Number

of initiatives

Percentage

of initiatives

Basic research 13 16 

Applied research 34 41 

Demonstration 29 35

Commercialization 24 29

Deployment 58 71

Source: GAO analysis of agency-provided data. 

Note: Because many wind-related initiatives supported multiple technology advancement activities, 

the percentage of initiatives does not total 100, and the number of initiatives does not total 82, the 

number of initiatives identified in our review. 

 

25In addition to the 63 initiatives supporting more than one wind issue, responses to our 

questionnaires for 15 initiatives indicated support for only one wind issue, and responses 

for 4 other initiatives indicated only an “other” wind issue. The numbers of initiatives 

supporting one or more than one wind issue does not reflect whether officials responded 

that initiatives supported “other” wind issues in addition to one of the six main wind issues. 
 

Page 17 GAO-13-136 Wind Energy

Our analysis showed that 39 (48 percent) of the 82 initiatives supported 

only one type of technology advancement activity. Another 39 initiatives 

(48 percent) supported more than one type of technology advancement 

activity, and of these, 5 initiatives supported all five.26 For example, 

Commerce’s Joint Wind Energy Program: Atmospheric Velocity Gradients 

initiative supports a single technology advancement activity—applied 

research—through studies focused on improving predictions of wind 

energy production from winds at various heights. In contrast, Commerce’s 

Green Technology Pilot Program supported all types of technology 

advancement activities except basic research. The program supported 

investment in wind and other “green” technologies through expedited 

reviews of patent applications, allowing for earlier intellectual property 

protection.

The majority of initiatives supported recipients, generally in the private 

sector, that provide electricity generated from wind to consumers, develop 

wind energy generation projects, or manufacture wind-related equipment, 

according to agency officials responding to our questionnaire. 

Specifically, 57 initiatives (70 percent) provided funding or other direct 

support to energy providers, developers, or manufacturers. Fewer than 

half of the initiatives provided funding or other direct support to recipients 

such as public and private researchers (35 initiatives), states and other 

governmental organizations (34 initiatives), and individuals (12 initiatives). 

Around half of the initiatives—44 initiatives (54 percent)—supported one 

type of recipient, while the remaining 38 initiatives supported multiple 

types of recipients.

In terms of federal financial support, deployment was the primary focus of 

federal efforts to promote wind energy. Of the reported $2.9 billion in 

actual and estimated obligations for wind-related activities in fiscal year 

2011, $2.86 billion (99 percent) was obligated by the 58 initiatives that 

included support for deployment. As previously noted, approximately 94 

percent of total wind-related obligations—just over $2.7 billion—was 

 

26In addition to the 39 initiatives supporting one type of technology advancement activity 

and the 39 initiatives supporting more than one, responses to our questionnaires for 2 

initiatives indicated only an “other” technology advancement activity, and responses for 2 

others did not indicate any technology advancement activity. The numbers of initiatives 

supporting one or more than one technology advancement activity do not reflect whether 

officials responded that initiatives supported “other” technology advancement activities in 

addition to one of the five main types of activities. 

Initiatives Supporting 

Deployment Accounted for 

Most Obligations and Tax 

Subsidies Related to Wind
 

Page 18 GAO-13-136 Wind Energy

obligated by Treasury’s Section 1603 program for the deployment of 

projects. Other initiatives that supported deployment activities obligated 

$147 million. In addition to obligations, all nine of Treasury’s wind-related 

tax expenditures—with estimated tax subsidies of at least $1.1 billion for 

activities specifically related to wind—included support for deployment. 

These tax subsidies were primarily provided through the PTC, which, in 

2011, provided an income tax credit of 2.2 cents per kilowatt hour for 

energy produced from wind and certain other renewable energy 

sources.27 In addition, deployment was the most commonly supported 

technology advancement activity at the five lead agencies.28 See figure 3 

below for the number of initiatives supporting each technology 

advancement activity at these agencies.

 

27The amount of the credit varies by energy source. For example, the amount of the credit 

is currently 1.1 cents per kilowatt hour for energy produced from a subset of qualified 

energy sources, including hydropower, landfill gas, and others. In addition, the amount of 

the credit is adjusted annually for inflation. For example, when it was first created under 

the Energy Policy Act of 1992, the amount of the credit was 1.5 cents per kilowatt hour for 

energy produced by wind facilities. 

28The number of DOE initiatives supporting deployment was equal to or greater than the 

number of its initiatives supporting any other technology advancement activity.
 

Page 19 GAO-13-136 Wind Energy

Figure 3: Number of Federal Wind-Related Initiatives at Five Lead Agencies, by 

Agency and Technology Advancement Activity Supported

Note: Agency initiatives often supported more than one technology advancement activity; therefore, 

the sum of initiatives shown in this figure for a given agency will not total the number of that agency’s 

initiatives in our review.

In addition to initiatives that support deployment of wind energy 

technologies by directly funding or providing tax subsidies for the 
 

Page 20 GAO-13-136 Wind Energy

construction or operation of wind facilities, some initiatives that we 

identified supported the deployment of these technologies indirectly. This 

indirect support includes facilitating the buying and selling of wind 

technologies or wind energy, or encouraging deployment through policies 

and regulations. Examples include the following:

• Commerce’s International Trade Administration implements an 

International Buyer Program, which supports U.S. companies at trade 

shows—including several major shows focused on renewable 

energy—by recruiting and escorting foreign buyer delegations to meet 

with U.S. companies.

• EPA’s Green Power Partnership supports deployment of wind and 

other renewable energy technologies by encouraging organizations 

and individuals to purchase renewable energy through outreach, 

education, and technical support.

• DOE’s Division of Permitting, Siting, and Analysis implements an 

initiative providing technical and financial assistance to state and 

regional entities, such as public utility commissions and state 

legislatures, to help develop renewable energy policies and portfolio 

standards, among other things.

The 82 wind-related initiatives we identified were fragmented across 

agencies, most had overlapping characteristics and, though half reported 

formally coordinating, several financing deployment of wind facilities have 

provided some duplicative financial support. The initiatives were 

fragmented because they were implemented across nine agencies and 

were involved in the same broad area of national need. Most initiatives 

overlapped to some degree with at least one other initiative because they 

had at least one wind issue, technology advancement activity, type of 

recipient, and type of goal in common, but such overlap did not 

necessarily lead to duplication of efforts because initiatives sometimes 

differed in meaningful ways. In addition, officials from about half of all 

initiatives reported formally coordinating with other wind-related initiatives. 

Such coordination can, in principle, reduce the risk of unnecessary 

duplication and improve the effectiveness of federal efforts. However, we 

identified seven initiatives that have provided duplicative support—

financial support from multiple initiatives to the same recipient for 

deployment of a single project. Specifically, wind project developers have, 

in many cases, combined the support of more than one Treasury initiative 

and, in some cases, have received additional support from smaller grant 

Initiatives Were 

Fragmented and Had 

Overlapping 

Characteristics with 

Half Reporting 

Coordination, but 

Several Provided 

Some Duplicative 

Financial Support for 

Deployment 
 

Page 21 GAO-13-136 Wind Energy

or loan guarantee programs at DOE or USDA. We also identified three 

other initiatives that did not fund any wind projects in fiscal year 2011 but 

that could, on the basis of the initiatives’ eligibility criteria, be combined 

with one or more initiatives to provide duplicative support. Of the 10 

initiatives, those at Treasury accounted for over 95 percent of the federal 

financial support for wind in fiscal year 2011.

The 82 wind-related initiatives we identified were fragmented because 

they were implemented across nine agencies and were involved in the 

same broad area of national need: promoting or enabling the 

development of wind energy. We found that initiatives supporting 

deployment in particular were spread about evenly across the five lead 

agencies—each had between 10 and 13 initiatives that supported 

deployment. In March 2011, we reported that fragmentation has the 

potential to result in duplication of resources.29 However, such 

fragmentation is, by itself, not an indication that unnecessary duplication 

of efforts or activities exists. For example, in our March 2011 report, we 

stated that there can be advantages to having multiple federal agencies 

involved in a broad area of national need—agencies can tailor initiatives 

to suit their specific missions and needs, among other things.

Across all initiatives, we found that 68 (83 percent) overlapped to some 

degree with at least one other initiative because they supported similar 

wind issues, technology advancement activities, and recipients, and had 

similar goals. The following are several examples of overlapping 

initiatives:

• Deployment of utility-scale land-based wind facilities by the energy 

industry. Seventeen initiatives provided financial support for the 

construction or use of utility-scale land-based wind facilities to energy 

companies. For instance, USDA’s Direct and Guaranteed Electric 

Loan Program provides loans and loan guarantees to establish and 

improve electric service in rural areas, including through utility-scale 

on-grid wind and other renewable energy systems. Similarly, the 

SBA’s Certified Development Company/Section 504 Loans initiative 

guarantees SBA loans to businesses for, among other things, energy 

 

29GAO-11-318SP. 

Initiatives Were 

Fragmented and Most Had 

Broadly Overlapping 

Characteristics
 

Page 22 GAO-13-136 Wind Energy

efficiency and renewable energy projects, including utility-scale landbased wind projects.

• Applied research to facilitate the integration of wind energy into the 

electric power grid. Five initiatives provided funding or support to 

public or private researchers to conduct applied research related to 

the integration of wind energy into the electric grid. For instance, 

DOE’s Grid-Scale Rampable Intermittent Dispatchable Storage 

program funds efforts to develop new technologies that enable 

widespread use of cost-effective grid-scale energy storage, 

particularly technologies that mitigate variability in energy generated 

from renewable sources such as wind and solar. Similarly, the 

National Science Foundation’s Emerging Frontiers in Research and 

Innovation initiative provides grants for interdisciplinary engineering 

research with the potential to create a significant impact in meeting 

national needs. Specifically, in fiscal year 2011, the initiative funded 

research on compressed air technology for storing excess energy 

from offshore wind turbines to alleviate power supply and demand 

imbalances on the electric grid during the day.30

• Deployment of offshore wind technologies by state, local, and other 

governmental organizations. Five initiatives helped address policy and 

regulatory barriers to deployment of offshore wind through support for 

state, local, and other governmental organizations. For instance, 

under Interior’s Renewable Energy Program there is a Development 

and Implementation initiative through which BOEMRE worked to 

authorize orderly, safe, and environmentally responsible renewable 

energy development on the outer continental shelf, while 

complementing ongoing state and local renewable energy efforts. 

BOEMRE’s efforts include assisting states in meeting goals 

established in RPSs through studies of potential development of 

particular states’ offshore areas, as well as coordination and 

information exchange with states and regional organizations. 

Similarly, Commerce’s MarineCadastre.gov initiative supports wind 

energy development and other uses of the outer continental shelf by 

providing mapping information for project planning and siting, which is 

intended to help developers identify and avoid potentially conflicting 

 

30Compressed air energy storage involves injecting compressed air into a geological 

formation such as an underground cavern within a salt dome. To recover the power, the 

air is released and used to help drive a turbine generator. Compressed air energy storage 

provides bulk energy storage for stationary power systems.
 

Page 23 GAO-13-136 Wind Energy

uses before creating development plans. Commerce’s efforts under 

this initiative in fiscal year 2011 included developing maps for a 

federal-state task force to facilitate decisions on wind energy 

development in federal waters.

In addition, we identified several types of state initiatives that encourage 

development of wind and other renewable energy sources and share key 

characteristics with federal wind-related initiatives. Along with federal 

agencies, state governments implement initiatives that help energy 

companies finance deployment of utility-scale land-based wind facilities. 

These initiatives include state tax incentives such as production and 

investment tax credits. They also include state grant and loan programs, 

some of which were federally funded, according to DSIRE data. See 

figure 4 below for examples of these state and federal initiatives available 

in fiscal year 2011.

Figure 4: Examples of Federal and State Initiatives Available in Fiscal Year 2011 to Provide Financial Support for Deployment

of Utility-Scale Land-Based Wind Facilities by Energy Companies

a

Though most of these programs are implemented by state governments, several are implemented by 

one or more utilities or local governments within a state.
 

Page 24 GAO-13-136 Wind Energy

States have also enacted a number of rules, regulations, or policies that 

encourage deployment of wind and other renewable energy sources, 

most notably RPSs. Such standards do not provide direct financial 

support to particular wind projects; however, by requiring or encouraging 

that a percentage of the electricity consumed in a state be generated from 

renewable sources, they are designed to create market demand for 

electricity from sources such as wind. Recent economic studies we 

reviewed suggest that certain RPSs have increased development of

renewable energy.31 Several financial professionals and agency officials 

with whom we spoke cited RPSs as strongly influencing wind energy 

development. They said that by creating demand for wind and other 

renewable energy, RPSs complement federal initiatives such as the PTC, 

which reduce the price of this energy. Currently, 37 states have RPSs 

that include wind.32 For instance in California—which led the nation in 

new wind capacity added in 2011—state law requires electric utilities in 

the state to have 33 percent of their retail sales derived from eligible 

renewable energy resources, including wind, by 2020. In Texas—which 

led the nation in total installed wind capacity in 2011—state law requires 

5,880 megawatts of total installed renewable energy capacity by 2015, 

including up to 5,380 megawatts of wind energy capacity.33

Overlap among initiatives does not necessarily lead to duplication 

because initiatives sometimes differ in meaningful ways. For instance, 

certain of Treasury’s tax expenditures that support deployment of utilityscale land-based wind facilities by the energy industry differ in the type of 

organization eligible for their support. Treasury’s Credit for Holding New 

 

31Gilbert Metcalf, Investment in Energy Infrastructure and the Tax Code, From the 

Selected Works of Gilbert E. Metcalf (2009); Sanya Carley, State Renewable Energy 

Electricity Policies: An Empirical Evaluation of Effectiveness, Energy Policy (2009); 

Gireesh Shrimali and Joshua Kniefel, Are Government Policies Effective In Promoting 

Deployment of Renewable Electricity Resources? Energy Policy (2011); Haitao Yin and 

Nicholas Powers, Do State Renewable Portfolio Standards Promote In-State Renewable 

Generation? Energy Policy (2010). 

32State RPS data are from DSIRE. Of the 37 states, 29 states have legally binding state 

standards, and 8 states have nonbinding RPS goals, according to DSIRE data. In addition 

to these states, Florida has a municipal utility that has signed a memorandum of 

understanding formalizing its commitment to generate at least 7.5 percent of its electric 

capacity from wind and other renewable energy sources by 2015. 

33Texas law established a target of 500 megawatts of the total required 5,880 megawatts 

to come from sources other than wind energy. As of the end of 2011, 10,394 megawatts of 

wind energy capacity had been installed in Texas according to DOE.
 

Page 25 GAO-13-136 Wind Energy

Clean Renewable Energy Bonds, for example, helps tax-exempt entities 

such as not-for-profit electric utilities or cooperative electric companies 

finance capital expenditures for wind and other renewable energy 

facilities by providing tax credits to holders of bonds issued by those 

entities. In contrast, the majority of Treasury’s other wind-related tax 

expenditures that support the deployment of utility-scale land-based wind 

facilities do so by providing taxable organizations with tax credits or other 

tax incentives for such projects. In addition, certain overlapping initiatives 

may provide a cumulative benefit for the deployment of wind projects but 

do not meet our definition of duplication because they do not provide 

financial support to the same recipient for a single wind project. For 

instance, Treasury officials noted that the Qualifying Advanced Energy 

Project Credit and the Section 1603 program could provide support 

across multiple stages of wind energy deployment if, for example, a 

manufacturing plant that produces wind turbines receives the credit and a 

wind facility that uses those turbines receives a Section 1603 grant. 

However, for purposes of our report, these initiatives do not provide 

duplicative support because they have different direct recipients.

Officials from 43 (52 percent) of the 82 initiatives reported coordinating 

formally with other federal wind-related initiatives.34 Coordination was 

most prevalent among initiatives that reported having wind-specific 

goals—such as reducing the cost of wind technologies or facilitating the 

siting, leasing, and construction of new offshore wind projects. 

Specifically, of the 25 initiatives that reported having such goals, officials 

from 20 initiatives (80 percent) reported coordinating with other windrelated initiatives. In contrast, of the 57 initiatives that did not report 

having wind-specific goals, officials from 23 initiatives (40 percent) 

reported such coordination. Most of the initiatives for which officials 

reported coordinating—36 of 43—included coordination efforts with windrelated initiatives in other federal departments and independent agencies. 

For example, officials from several agencies reported coordinating 

through the Interagency Rapid Response Team for Transmission, which 

was based on a 2009 joint memorandum of understanding between nine 

 

34We did not include informal coordination in the scope of this report. Our past work has 

shown that informal coordination mechanisms may be dependent on relationships among 

individual officials and that these informal relationships could end if personnel move to 

different assignments. See GAO, National Security: Key Challenges and Solutions to 

Strengthen Interagency Collaboration, GAO-10-822T (Washington, D.C.: June 9, 2010).

About Half the Initiatives 

Reported Formally 

Coordinating, in Some 

Cases Employing Key 

Practices for Enhancing 

and Sustaining Agency 

Collaboration 
 

Page 26 GAO-13-136 Wind Energy

federal agencies. This team aims to improve coordination of federal 

permitting and reviews of transmission infrastructure projects that will help 

integrate wind and other renewable energy sources into the electric grid. 

Officials from 22 initiatives also reported coordinating their wind-related 

initiatives with state governments.

As we have previously reported, coordination may reduce the risk of 

unnecessary duplication, and a lack of coordination can waste scarce 

funds and limit the overall effectiveness of the federal effort.35 We have 

also previously reported that while agencies face a range of barriers when 

they attempt to collaborate with other agencies—such as differing 

missions and incompatible processes—certain key practices can help 

agencies enhance and sustain federal collaboration.36 Several lead 

agencies implementing wind-related initiatives have formally coordinated 

overlapping initiatives, in some cases in a manner consistent with key 

practices, such as in the following examples:

• Identifying and addressing needs by leveraging resources: Agency 

officials reported leveraging resources such as the knowledge and 

expertise of other agencies in developing and implementing their own 

wind energy initiatives. For example, DOE has drawn on Treasury’s 

expertise through required consultations regarding the terms and 

conditions of loan guarantees DOE provides to applicants.37 In 

addition, USDA officials consulted with Treasury regarding the 

potential impact of tax laws on new provisions USDA was drafting for 

awarding certain grants. For some initiatives, agency officials reported 

leveraging the financial resources of other agencies to help ensure

prudent use of funds, particularly in the case of loan guarantee 

programs. For example, according to an official for DOE’s loan 

guarantee programs, if a project qualifies for a Treasury Section 1603 

 

35GAO, The Government Performance and Results Act: 1997 Governmentwide 

Implementation Will Be Uneven, GAO/GGD-97-109 (Washington, D.C.: June 2, 1997); 

GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, 

D.C.: Feb. 28, 2012).

36GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain 

Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005).

37See 42 U.S.C. § 16512; 10 C.F.R. §609.9 (d); and Office of Management and Budget 

Circular A-129 Revised (Nov. 2000), Policies for Federal Credit Programs and Non-Tax 

Receivables.
 

Page 27 GAO-13-136 Wind Energy

grant, it is typical for DOE to require that a portion of the grant 

proceeds be used to repay the DOE-guaranteed debt.38 In addition, a 

USDA official for the Business and Industry Guaranteed Loan 

Program—which provides guaranteed loans to rural borrowers for 

projects that improve the economic and environmental climate in rural 

communities—said that the program provides information to 

applicants regarding other sources of funding available for wind 

projects, such as SBA loans or grants, or state-level sources of 

funding.

• Developing mechanisms to monitor, evaluate, and report on results: 

Agencies also engaged in collaborative efforts to create the means to 

monitor and evaluate their wind-related initiatives and report on their 

activities. For example, USDA reported coordinating programs that 

provide loans, grants, and loan guarantees for projects in rural 

communities both internally and with other agencies such as 

Commerce, DOE, and EPA through USDA’s Energy Council 

Coordinating Committee. Agency officials participating in this council 

share general information on energy-related programs, which helps 

support common performance reporting and budgeting processes. In 

addition, USDA data on its grants, loans, and other awards are 

available to other agencies and the general public through a webbased mapping tool that shows agencies and potential recipients 

where USDA is supporting renewable energy projects.

 

38For instance, according to DOE officials, this type of arrangement can be made on a 

“pro rata” basis: that is, the percentage of the proceeds from the grant used to repay debt 

is the same as the percentage of a project’s cost financed by debt. For example, if 70 

percent of a project’s capital costs are financed by debt, then 70 percent of Section 1603 

grant proceeds will be used to pay down the debt. The percentage of debt financing varies 

from project to project.
 

Page 28 GAO-13-136 Wind Energy

We identified examples of utility-scale land-based wind projects that 

received duplicative support—financial support from multiple initiatives to 

the same recipient for a single project—from initiatives supporting 

deployment of wind facilities. Specifically, we identified 10 initiatives that 

have provided or could provide duplicative support, as follows:39

• Seven initiatives provided some duplicative support for wind projects, 

including three tax expenditures and a grant program implemented by 

Treasury, a loan guarantee program implemented by DOE, and two 

programs that provide grants, loans, and loan guarantees 

implemented by USDA. Although all seven of these initiatives cannot 

be combined to support the same project, each of them has been 

combined with one or more of the others, with some limitations, to 

support a single project.

• Three other initiatives did not actually fund any wind projects in fiscal 

year 2011 but could provide duplicative support for wind projects 

going forward, based on the types of projects eligible for their support. 

These three initiatives were DOE’s Section 1703 Loan Guarantee 

Program (Section 1703 program) and USDA’s Business and Industry 

Guaranteed Loan Program and High Energy Cost Grant Program.

Some of these 10 initiatives have recently expired, such as Treasury’s 

Section 1603 program and DOE’s Section 1705 Loan Guarantee Program 

(Section 1705 program), and several others are scheduled to expire for 

wind projects at the end of 2013, such as Treasury’s tax credits.40

However, the types of mechanisms these initiatives employ—tax 

expenditures, grants, and loan guarantees—are employed by other of the 

initiatives that are not expiring and may be considered by policymakers as 

a means for supporting wind energy through future initiatives. In addition, 

duplication of financial support among these initiatives may not be limited 

to wind projects because all of these initiatives supported a range of 

 

39We focused our analysis of duplication on initiatives at the five lead agencies (DOE, 

Interior, USDA, Commerce and Treasury) that provided financial support to energy 

industry recipients for the construction or operation of utility-scale land-based wind 

facilities. These initiatives represented the vast majority of actual and estimated windrelated obligations and tax subsidies in fiscal year 2011. For more detailed discussion of 

our methodology for identifying duplication, see app. I.

40Applications for Section 1603 grants must have been submitted before October 1, 2012, 

though Treasury officials noted that they anticipate significant awards to applicants will be 

made under the Section 1603 program over the next 4 years.

Several Initiatives That 

Financed Deployment of 

Wind Facilities Have 

Provided Some Duplicative 

Financial Support
 

Page 29 GAO-13-136 Wind Energy

renewable energy projects. Of the 10 initiatives, Treasury’s 4 initiatives 

accounted for over 95 percent of the total federal financial support for 

wind in fiscal year 2011. See table 4 for brief descriptions of these 

initiatives. (For more detailed descriptions of these initiatives, including 

information on their expiration dates, see app. II.)

Table 4: Ten Initiatives That Have Provided or Could Provide Duplicative Financial Support for Deployment of Wind Facilities 

Agency Initiative Description

DOE Title XVII Section 1703 Loan 

Guarantee Program (Section 

1703 program)a

Title XVII Section 1705 Loan 

Guarantee Program (Section 

1705 program)

According to DOE, the Section 1703 program provides loan guarantees to support 

innovative clean energy technologies that are typically unable to obtain conventional 

private financing due to high technology risks. The law requires that the technologies 

avoid, reduce, or sequester air pollutants or emissions of greenhouse gases. The 

Section 1705 program was a temporary program providing loan guarantees for both 

innovative and commercial technology energy projects that employ wind and other 

renewable energy systems, electric power transmission systems, or leading-edge 

biofuels that meet certain criteria. All Section 1705 projects were required to begin 

construction no later than September 30, 2011. Following the expiration of the 

Section 1705 program, Congress appropriated $170 million to pay the credit subsidy 

costs for Section 1703 projects that use renewable energy or efficient end‐use 

energy technologies. The law provides that this funding is also available to such 

projects that applied under the Section 1705 program prior to February 24, 2011. 

Treasury Energy Production Credit (PTC)

Energy Investment Credit (ITC)

Payments for Specific Energy 

Property in Lieu of Tax Credits 

(Section 1603 program)

The PTC provides an income tax credit based on the amount of energy produced at 

qualified facilities, including wind facilities. As an alternative to the PTC, the ITC 

provides an income tax credit of 30 percent of either the cost or fair market value of 

new equipment that produces electricity from wind and other renewable energy 

sources. The payments under the Section 1603 program, which can be taken in lieu 

of the PTC or ITC, provide cash grants worth 30 percent of a wind project’s cost or 

fair market value.

Accelerated Depreciation 

Recovery Periods for Specific 

Energy Property (accelerated 

depreciation)b

Allows wind energy technologies to be treated as 5-year property—that is, property 

whose costs are recovered through depreciation deductions from businesses’ taxable 

income over 5 years. The Joint Committee on Taxation generally classifies as tax 

expenditures cost recovery allowances that are more favorable than those provided 

under the alternative depreciation system (Internal Revenue Code Section 168(g)), 

which provides for straight-line recovery over tax lives that are longer than those 

permitted under the accelerated system. Accelerated depreciation, in effect, reduces 

the cost of acquiring wind and other properties by allowing businesses to deduct 

larger amounts from their taxable income sooner than they would be able to do under 

straight-line depreciation. Reducing tax liability earlier provides a benefit to the 

taxpayer because of the time value of money—having a lower tax payment today is 

worth more to the taxpayer than having the lower payment in the future.

USDA Business and Industry 

Guaranteed Loan Programa Provides guaranteed loans to borrowers in rural areas for a range of eligible projects 

that improve the economic and environmental climate in rural communities. Eligible 

activities include the development and construction of renewable energy systems.

Direct and Guaranteed Electric 

Loan Program

Provides loans and loan guarantees for a range of eligible projects that establish and 

improve electric service in rural areas, including renewable energy systems.
 

Page 30 GAO-13-136 Wind Energy

Agency Initiative Description

High Energy Cost Grant 

Programa Provides grants for energy generation, transmission, and distribution facilities serving rural communities with annual average home energy costs that exceed 275 percent 

of the national average. Eligible projects include on-grid and off-grid renewable 

energy systems.

Rural Energy for America 

Program (REAP)

Provides funding for grants and guaranteed loans to farmers, ranchers, and small 

businesses in rural areas to assist with purchasing and installing renewable energy 

systems, such as wind projects.

Source: GAO analysis of agency-provided data.

Note: Each of these 10 initiatives has been or could be used together with 1 or more other initiatives 

in this table; however, recipients can receive support from only 1 of the following 3 initiatives for a 

specific project: the PTC, ITC, or Section 1603 program.

a

The Section 1703 program has not funded any wind or other projects to date, though it has provided 

conditional commitments to guarantee over $10 billion in loans for nuclear energy projects. However, 

recipients of Section 1703 loan guarantees are not restricted from receiving support from tax

initiatives, such as Treasury’s tax credits, and may receive support from such initiatives in the future. 

In addition, neither the Business and Industry Guaranteed Loan Program nor the High Energy Cost 

Grant Program funded any wind projects in fiscal year 2011. However, both initiatives specify wind 

projects as eligible for funding, and USDA officials said that neither initiative restricts their recipients 

from receiving support under the DOE or Treasury initiatives listed here.

b

Depreciation—a normal business expense under an income tax system—is an annual deduction 

from income that allows taxpayers to recover the cost or other basis of certain property used in a 

business or other income-producing activity over the useful life of the property. In addition to the 

existing 5-year accelerated depreciation allowed for wind and other properties, 2008 legislation and 

subsequent laws have temporarily granted a 50 percent first-year bonus depreciation for properties 

placed in service before January 1, 2014. This allows businesses to deduct 50 percent of the 

depreciable basis of a broad set of tangible properties, including wind and other renewable energy 

facilities, from their taxable income in the first year after they are acquired. Furthermore, the Tax 

Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 allowed businesses 

to deduct 100 percent of the depreciable basis of eligible wind and other facilities from their taxable 

income after September 8, 2010 and before January 1, 2012. The 50 percent bonus depreciation 

allowed under the 2008 act narrowed any tax differences between eligible assets, and the 100 

percent bonus depreciation introduced in 2010 eliminated those differences altogether under the 

provision for allowing a full write-off of asset acquisition costs.

According to interviews with agency officials and financial professionals 

and information from agency websites, wind project developers have 

used various combinations of these initiatives to help finance specific 

wind projects. For instance, in many cases, developers combined the 

support of more than one Treasury initiative and, in some cases, they 

received additional support from smaller DOE or USDA grant or loan 

guarantee programs. Among Treasury initiatives, although the PTC, 

Energy Investment Credit (also known as the Energy Investment Tax 

Credit, or ITC), and Section 1603 program cannot be combined for a 

specific project, they all support wind projects for which developers also 

typically claim Accelerated Depreciation Recovery Periods for Specific 

Energy Property (accelerated depreciation), according to financial 

professionals and a Treasury official. In addition, DOE’s Section 1705 

program has provided loan guarantees for four utility-scale wind 

generation projects, all of which have received grants under Treasury’s 
 

Page 31 GAO-13-136 Wind Energy

Section 1603 program, and all of which are eligible to claim accelerated 

depreciation.41 Similarly, USDA’s grant and loan programs have 

supported projects that also received support under other initiatives. For 

example, USDA’s Direct and Guaranteed Electric Loan Program provided 

a loan guarantee for a $204 million loan for a wind project that was also 

awarded an $88 million grant under the Section 1603 program. In 

addition, USDA’s Rural Energy for America Program (REAP) provides 

grants and loan guarantees for renewable energy projects. A 2006 report 

by DOE’s Lawrence Berkeley National Laboratory (LBNL) found that 

nearly all wind projects with a capacity of over 100 kilowatts that received 

REAP grants from 2003 through 2005 also intended to claim tax credits 

under the PTC.42

Although these initiatives have, in some cases, provided duplicative 

support, their support may address different needs of wind project 

developers or the communities they serve, according to agency officials 

and financial professionals with whom we spoke, and analyses by DOE’s 

national laboratories.43 For example, unlike the PTC and ITC, the Section 

1603 program allows wind project developers to directly claim a cash 

grant regardless of their tax liability, thus avoiding the potential need to 

partner with financial institutions or other investors who provide tax 

 

41Grant, loan, and tax expenditure initiatives provide capital for wind and other eligible 

projects—that is, the funds or tax subsidies provided by the government are used to cover 

the costs of developing and building a project. In contrast, loan guarantees provided 

through initiatives such as DOE’s Section 1703 and Section 1705 programs lower the cost 

of capital for projects by helping companies obtain affordable financing because the 

federal government agrees to reimburse the lender for the guaranteed amount if a 

borrower defaults. Despite this difference between these forms of government support, 

both types of initiatives provide a financial benefit for developers of wind projects.

42Lawrence Berkeley National Laboratory, Avoiding the Haircut: Potential Ways to 

Enhance the Value of the USDA’s Section 9006 Program (Berkeley, CA: July 2006). 

43National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory, 

PTC, ITC, or Cash Grant? An Analysis of the Choice Facing Renewable Power Projects in 

the United States (Golden, CO and Berkeley, CA: March 2009); Lawrence Berkeley 

National Laboratory, Revealing the Hidden Value that the Federal Investment Tax Credit 

and Treasury Cash Grant Provide To Community Wind Projects (Berkeley, CA: January 

2010); Lawrence Berkeley National Laboratory, Community Wind: Once Again Pushing 

the Envelope of Project Finance (Berkeley, CA: January 2011).
 

Page 32 GAO-13-136 Wind Energy

equity.44 The Section 1603 program was created in part to address a 

perceived lack of tax equity following the recent financial crisis, according 

to Treasury guidance and financial professionals. Furthermore, by 

providing a cash grant, the program allows developers to receive the full 

amount of the government subsidy rather than sharing this subsidy with 

tax equity investors.45 DOE’s Section 1705 program, meanwhile, provided 

financing in many cases for innovative projects that were seen as too 

risky to obtain affordable financing from private lenders, according to 

DOE officials who administered the program. In addition, as with the 

Section 1703 program, Section 1705 loan guarantees can address 

projects’ needs for construction and long-term debt financing, while grants 

under the Section 1603 program and support from Treasury’s tax 

expenditures are available only when the related project has been 

constructed and is operational. Therefore, the loan guarantees helped 

support many projects that might not otherwise have reached the 

development stage—such as being placed in service or beginning to 

generate electricity—required to receive tax credits or Section 1603 

grants. In addition, USDA’s grant, loan, and loan guarantee initiatives are 

designed to encourage projects that serve the needs of rural 

communities, including by providing reliable, affordable electricity, and 

more generally stimulating rural economic development.

Moreover, although these initiatives can be used together in various 

combinations to help finance the same wind project, several include 

 

44Developers of wind projects can cover the costs of their projects using several sources 

of capital, including debt and equity. Tax equity is a form of capital provided for projects by 

investors in exchange for tax benefits—primarily the PTC and accelerated depreciation—

and a share of the revenues. Tax equity investors allow developers without sufficient tax 

liabilities to capture the benefit of tax credits and other tax subsidies. Using tax equity, a 

developer can convert its federal tax benefits into cash through an investor, at a discount, 

and use this cash to pay for a portion of project capital and installation costs.

45Project developers may not receive the full benefit of tax subsidies such as the PTC and 

accelerated depreciation, because the subsidies are often shared between the developers 

and financial or other institutions that invest tax equity in projects. Section 1603 grant 

payments go to whatever entity places the wind project into service, whether that is the 

developer or a tax equity investor. The Section 1603 program allows developers without 

sufficient tax liabilities to forgo the use of tax equity investors and directly receive the full 

amount of the government subsidy. However, developers may still partner with such 

investors who can take advantage of tax benefits such as depreciation, and who may also 

receive part of the subsidy provided through Section 1603 grants. According to financial 

professionals with whom we spoke, the rates of return on tax equity for such investors 

generally range from 7 to 9 percent for typical projects and can range up to twice that 

amount for riskier projects.
 

Page 33 GAO-13-136 Wind Energy

provisions—often referred to as antidouble-dipping provisions—that limit 

the amount of financial support provided to a wind project when combined 

with another initiative. For instance, the PTC includes a provision 

requiring that the amount of the credit be reduced for federal or state 

grants, tax-exempt bond financing, subsidized energy financing, or other 

federal tax credits received for use in connection with the project.46

LBNL’s financial modeling of wind projects for its 2006 report suggests 

that large wind projects receiving REAP grants and claiming the PTC 

would have seen the value of the PTC reduced by from 11 to 46 percent 

of the grant’s face value, depending on the project’s capital cost and 

capacity factor.47 Similarly, antidouble-dipping provisions reduce the value 

of the ITC and Section 1603 grants—through reductions to the portion of 

project costs on which they are calculated—for projects that also receive 

government grants that are not taxed as income,48 including, in some 

cases, REAP or other federal and state grants for wind projects.49 Grants 

not taxed as income also reduce a project’s depreciable basis, or the 

dollar amount that can be depreciated for tax purposes.50 In addition to 

limitations on combining Treasury’s tax expenditures with other sources 

of financial support, officials from USDA and DOE told us that their 

agencies consider some other sources of federal support a wind project 

 

4626 U.S.C. § 45 (b)(3). This provision includes an exception for certain closed-loop 

biomass facilities. Loan guarantees provided under DOE’s Section 1703 and Section 1705 

programs are not treated as subsidized energy financing under this provision. The amount 

of the credit is not reduced by any state tax credits received in connection with a project.

See Rev. Rul. 2006-9, 2006-9 I.R.B. 519.

47Capacity factors represent the electricity generated by a facility as a percentage of that 

facility’s maximum capacity to generate electricity.

48According to officials, Treasury determines on a case-by-case basis whether grants 

under REAP or other federal grant programs must be taxed as income. For instance, 

officials said grants are generally not taxed if they meet the criteria of the “general welfare 

exclusion.” This exclusion applies to payments made under social benefit programs for the 

promotion of general welfare based upon the recipient’s need. Such payments include 

federally provided mortgage assistance payments to low-income homeowners, or certain 

government payments to victims of a natural disaster.

49The Recovery Act eliminated the provision reducing the value of the ITC and Section 

1603 program grants for government-subsidized, low-interest loans, though such a 

provision remains for the PTC. 

50The Recovery Act allows a partial exception to this provision for projects receiving 

Section 1603 grants along with accelerated depreciation. In this case, a project’s 

depreciable basis is reduced by half of the grant’s value—15 percent of project costs—

rather than the full 30 percent of project costs that Section 1603 grants are worth.
 

Page 34 GAO-13-136 Wind Energy

has received or will receive in determining whether or how much to award 

under their grant, loan, and loan guarantee programs. The officials for 

some of these programs said that they limit the value of support they 

provide, while officials from other programs, by law, must deny support 

altogether when applicants are receiving funding from other federal 

sources. For instance, the appropriations laws applicable to the Section 

1703 program prohibit the issuance of loan guarantees for projects that 

are expected to receive certain other sources of federal support. Such 

sources of support include grants from certain USDA initiatives and 

federal “off-take arrangements,” whereby federal agencies agree to 

purchase power from the projects.51 Similarly, USDA officials said that, 

under REAP, the total amount of grants provided for projects from REAP 

and other federal sources generally cannot exceed 25 percent of project 

costs. However, this limit does not apply to grants provided under 

Treasury’s Section 1603 program, according to USDA officials.

In addition to these 10 federal initiatives, the state tax credits, grant 

programs, and loan programs previously discussed can be used, in some 

cases, to provide financial support for deployment of a wind project in 

combination with one or more federal initiatives. For instance, it is 

possible for a single wind project to receive federal support from a 

Section 1603 grant, accelerated depreciation, and a DOE loan guarantee, 

along with state support from tax incentives and indirect subsidies due to 

a state RPS. Furthermore, DSIRE staff and a financial professional with 

whom we spoke said that states may often structure their initiatives so 

that recipients can fully leverage sources of federal support, such as by 

designing the initiatives to avoid triggering federal antidouble-dipping 

provisions. In addition, under Treasury’s published guidance on the PTC 

provision reducing the amount of the credit for certain other sources of 

federal or state support, state or local tax credits do not trigger a 

reduction in the value of the PTC.52

 

51DOE officials told us that, under applicable provisions of the appropriations laws, the 

Office of Management and Budget is required to certify compliance with this restriction. 

The restriction appears in the fiscal year 2009 Omnibus Appropriations Act (Pub. L. No. 

111-8), as well as the Department of Defense and Full-Year Continuing Appropriations 

Act, 2011, (Pub. L. No. 112-10) and provides that DOE may not provide loan guarantees 

based on its authority under that act to projects that benefit from other federal grants or 

support (other than tax benefits, federal leases, insurance, and transmission facilities).

52Rev. Rul. 2006-9, 2006-9 I.R.B. 519.
 

Page 35 GAO-13-136 Wind Energy

Even with antidouble-dipping provisions and other limitations on 

combining financial support from multiple initiatives for the same project, 

federal initiatives have provided cumulative financial support worth about 

half of project costs for many wind projects according to financial 

professionals. For instance, financial professionals we spoke with 

estimated that the PTC and accelerated depreciation together provide 

nearly half of the capital costs required for a typical wind farm.53 Of this 

amount, 30 percent or more of the total capital costs is due to the PTC, 

according to financial professionals’ estimates.54 For projects receiving 

support from other federal grant or loan initiatives in addition to the PTC 

and accelerated depreciation, the value of federal financial support would 

comprise a larger portion of project costs. Also, as noted earlier, wind 

projects may receive financial support from state initiatives. For instance, 

according to a briefing memorandum from White House staff, the total 

estimated federal and state financial support for a large wind project in 

Oregon—including a Section 1705 loan guarantee, a Section 1603 grant, 

accelerated depreciation at the federal and state level, state tax credits, 

and an estimated premium paid for power due to a state RPS—are worth 

65 percent or more of the project’s capital costs. In another example, 

estimates developed by management consultants for the energy industry 

 

53As noted above, project developers may not receive the full benefit of tax subsidies such 

as the PTC and accelerated depreciation, because the subsidies are often shared 

between the developers and financial or other institutions that provide tax equity for 

projects. In addition, regardless of whether the tax subsidies are provided to developers or 

tax equity investors, the full benefit of these subsidies may not always be achieved 

because either (1) the taxpayer may have insufficient taxable income to fully use the 

credits or depreciation deductions over the period of years they are provided, or (2) the 

taxpayer may be required to pay the Alternative Minimum Tax due to the use of the credits 

and deductions.

54Financial professionals’ estimates for accelerated depreciation ranged from 10 percent 

to 30 percent of projects’ capital costs. Estimates in the low end of this range accounted 

for only the incremental value provided for wind properties by 5-year accelerated 

depreciation, above the value of straight-line depreciation. Under the straight-line method, 

annual depreciation expenses are calculated by dividing the purchase price of the asset 

(less its estimated salvage or residual value) by the estimated useful life of the asset. 

Estimates in the high end of the range included the full amount of deductions permitted 

under accelerated depreciation. Treasury officials noted that these estimates of 

accelerated depreciation reflect its tax value in absolute terms, but do not reflect whether 

depreciation allowances granted to wind projects provide a greater benefit than do 

depreciation allowances for other industries. As noted above, the 50 percent bonus 

depreciation allowed under current law narrows any tax differences between eligible 

assets, and the 100 percent bonus depreciation allowed under previous legislation 

eliminated those differences altogether by allowing a full write-off of asset acquisition 

costs.
 

Page 36 GAO-13-136 Wind Energy

and other clients suggest that federal financial support for a New 

Hampshire wind farm—including a Section 1603 grant, a Section 1705 

loan guarantee, and accelerated depreciation—in combination with 

financial support from state initiatives is worth over half of the project’s 

capital costs.55

Agencies implementing the 10 initiatives that have provided or could 

provide duplicative support allocate support to projects on the basis of the 

initiatives’ goals or eligibility criteria, but the extent to which agencies 

assess applicant need for the support is unclear because we found they 

do not document assessments.56 DOE and USDA—which have 

discretion, to the extent allowed by their statutory authority, over the 

projects they support through 6 of the 10 initiatives—allocate support to 

projects based on the projects’ ability to meet initiative goals such as 

reducing emissions or benefitting rural communities, as well as other 

criteria such as financial and technological feasibility. Treasury, 

meanwhile, provides support to projects through the remaining 4 

initiatives based on the eligibility criteria in the tax code. DOE and USDA 

consider applicant need for the financial support of some initiatives, 

according to officials. However, we found that neither agency documents 

assessments of applicant need for any of their initiatives; therefore, the 

extent to which they use such assessments to determine how much 

support to provide is unclear. Treasury does not generally have discretion 

in allocating support to projects and, as such, does not assess need for 

the support of its initiatives. While the support of these initiatives may be 

necessary, in many cases, for wind projects to be built, because the 

agencies do not document assessments of need, it is unclear, in some 

cases, whether the entire amount of federal support provided was 

necessary to build wind projects. In the event that some wind projects 

receive more federal funding than is required to induce them to be built, 

this additional funding could potentially be used to induce additional 

 

55Booz & Company Inc.—a global management consulting firm for businesses, 

governments, and other organizations—developed these estimates using a proprietary 

economic model that it uses to advise its clients in the energy industry. We did not 

independently verify the model’s calculations.

56We focused our analysis of agencies’ allocation of support to projects and assessment 

of applicant need on the 10 initiatives we identified that have provided or could provide 

duplicative support. As noted above, these initiatives provided almost all the federal 

financial support we identified related to wind in fiscal year 2011. 

Agencies Support 

Projects on the Basis 

of Initiatives’ Goals or 

Eligibility Criteria, but 

the Extent to Which 

Agencies Assess 

Applicant Need Is 

Unclear 
 

Page 37 GAO-13-136 Wind Energy

projects to be built or simply withheld, thereby reducing federal 

expenditures.

Through their six initiatives, DOE and USDA allocate support to projects 

based on projects’ ability to meet initiative goals, along with other criteria 

such as financial and technological feasibility. For instance, DOE’s loan 

guarantee solicitation for its Section 1703 program set forth initial 

screening criteria for projects including that they employ new or 

significantly improved technology compared to commercially available 

technologies, and that they be ready to proceed through the loan 

approval process (i.e. equity has been committed to the project, 

construction and other contracts have been negotiated, and permits have 

been secured). For evaluating and scoring projects that meet the initial 

screening criteria, DOE’s solicitation also set forth two equally weighted 

criteria related to the program’s goals: a project’s expected reduction or 

avoidance of greenhouse gas emissions relative to its cost, and a 

project’s support for clean energy jobs and manufacturing. In line with 

program goals, USDA allocates the support of its four initiatives to 

projects based on their expected benefits for rural and other eligible 

communities, along with other factors such as technological feasibility and 

expected performance. For instance, under its High Energy Cost Grant 

Program, USDA evaluates which projects to support based on their 

abilities to address community needs such as those related to economic 

hardships, their technological design and feasibility, their expected 

performance measures including the amount of renewable energy they 

will produce, and other factors. Similarly, USDA evaluates applications for 

REAP grants or loan guarantees based on factors such as projects’ 

support for small agricultural producers or businesses, expected energy 

production, and technical merit. As with DOE’s Section 1703 program, 

USDA’s loan guarantee programs also allocate support to projects based 

on their ability to repay their debt. Unlike DOE and USDA, Treasury 

generally does not have any discretion regarding which projects receive 

the support of its initiatives.57 Taxpayers who are eligible for support 

under the Internal Revenue Code are generally entitled to that support.

 

57One exception to this, according to Treasury officials, is Treasury’s Qualifying Advanced 

Energy Project Credit, under which there is a limit on the total amount of support available. 

According to officials, DOE evaluates and ranks projects based on several criteria 

including their potential to create domestic jobs and reduce air pollution.

DOE and USDA Allocate 

Support to Projects Based 

on Initiative Goals and 

Other Criteria while 

Treasury Supports Projects 

Based on Eligibility under 

the Tax Code
 

Page 38 GAO-13-136 Wind Energy

According to agency officials and program guidance, DOE and USDA 

consider applicant need for the financial support of some of their 

initiatives.58 For instance, the solicitation for loan guarantee applications 

under DOE’s Section 1703 program states that DOE will view unfavorably 

applications for projects that could be fully financed on a long-term basis 

by commercial banks or others without a federal loan guarantee. DOE 

officials told us they require applicants to provide a letter stating whether 

their projects can be financed without a federal loan guarantee, although 

this self-certification by applicants does not require they document any 

efforts to obtain private financing.59 In addition to these letters, DOE 

officials said their conversations with wind project developers, along with 

their broader understanding of the lending community and project risks, 

allow them to determine whether projects would likely be able to obtain 

private financing without a loan guarantee. USDA also considers 

applicants’ need for support from some of its initiatives according to 

agency officials. For example, application guidance for USDA’s High 

Energy Cost Grant Program states that the program assesses project 

information including other sources of funding expected for the project to 

determine its financial viability, the level of community support for the 

project, and the community’s need for funds. Similarly, officials from the 

Direct and Guaranteed Electric Loan Program said that prior to loan 

approval they assess projects’ financial information to determine their 

financial feasibility and to avoid lending more than is necessary for project 

completion. However, unlike DOE’s Section 1703 program, we did not 

identify program documents for USDA’s initiatives—such as guidance for 

applicants or criteria for evaluating projects—stating that applicant need is 

a factor in allocating support. Treasury generally does not have any 

 

58As we have previously reported, federal agencies conduct similar assessments to guard 

against the potential for duplication or excessive support provided through subsidies for 

other types of projects. In particular, developers of affordable housing awarded multiple 

sources of public funding often must undergo subsidy layering reviews, which are a 

statutory requirement to assure that federal resources are neither duplicative nor wasteful 

when applied to affordable rental housing. See GAO, Housing Assistance: Opportunities 

Exist to Increase Collaboration and Consider Consolidation, GAO-12-554 (Washington, 

D.C.: Aug. 16, 2012).

59We have previously reported in another context that relying exclusively on applicants’ 

self-certification of eligibility does not prevent ineligible firms from receiving program 

support. See GAO, Service-Disabled Veteran-Owned Small Business Program: 

Vulnerability to Fraud and Abuse Remains, GAO-12-697 (Washington, D.C.: Aug. 1, 

2012).

It Is Unclear to What 

Extent Agencies Assess 

Applicant Need for the 

Financial Support of Their 

Initiatives Because We 

Found Such Assessments 

Are Not Documented
 

Page 39 GAO-13-136 Wind Energy

discretion in allocating support to projects and, as such, does not assess 

applicant need for the support of its initiatives.

Even with these DOE and USDA efforts, it is unclear to what extent DOE 

and USDA assess applicant need for the financial support of their 

initiatives because we found they do not document such assessments. 

The federal standards for internal control include control activities—such 

as documentation of significant transactions—which are essential for 

proper stewardship and accountability for government resources.60

Because, as we found, the agencies do not document these 

assessments, it is unclear to outside parties how they considered the 

financial need of applicants when determining what amount of support to 

provide. Moreover, it is unclear if the incremental support some initiatives 

provided was always necessary to build projects. In the event that some 

wind projects receive more federal funding than is required to induce 

them to be built, this additional funding could potentially be used to induce 

additional projects to be built or simply withheld, thereby reducing federal 

expenditures. The following are examples where it was unclear whether 

initiatives’ incremental support was needed for projects to be built61: 

• According to the White House briefing memorandum noted above, 

because of the tax subsidies and other federal and state support for 

the Oregon wind project, the return on the private equity invested in 

the project was estimated to be relatively high—around 30 percent.62

 

60GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(“Green Book”) (Washington, D.C.: November 1999).

61It was beyond the scope of our work to independently analyze the financing of specific 

wind projects in order to corroborate estimates of investors’ returns or to determine 

whether or not federal support for such projects was necessary in order for the projects to 

be built. The estimates of returns and statements related to the projects’ financial viability 

presented here do not necessarily indicate whether developers or investors would have 

committed their financial resources to these projects without the accompanying federal 

support. In commenting on a draft of this report, DOE noted that the Oregon wind project 

was of a significantly larger scale than other wind projects that had recently been 

financed, and that DOE’s support mobilized a group of private investors to enter into a 

risk-sharing partnership with the federal government at a time when long-term capital for 

large-scale renewable energy projects was scarce.

62According to DOE officials, this estimate represents the internal rate of return for the 

private equity invested in the project and is based on several favorable assumptions. The 

officials said these assumptions—including high quality wind resources and no equipment 

malfunctions or construction delays—could have changed since the estimate was 

developed in September 2010, reducing the actual rate of return for the project.
 

Page 40 GAO-13-136 Wind Energy

The memorandum further stated that this estimated return suggests 

the project would “likely move without the [Section 1705] loan 

guarantee,” and “the alternative of private financing would not make 

the project non-viable.” It is unclear from our review whether the loan 

guarantee was needed for the project to be built because we found 

DOE made no documented assessment of need. In addition, a 

separate analysis of the same wind project by DOE suggested that 

officials concluded, given the amount of the project’s debt, it would 

have sufficient cash flow to repay its guaranteed loan without the 

incremental support of a Section 1603 grant, which it later received. 

Specifically, DOE approved a loan guarantee for the project in part 

based on its credit analysis, which was made under the assumption 

that the project would not need to make use of a Section 1603 grant

to repay debt, and that neither DOE nor lenders for the project would 

have any claim on the grant. However, it is unclear whether the 

Section 1603 grant was needed for the project to be built because we 

found no documented assessment of need was made.63 Though the 

analyses from the White House memorandum and DOE question the 

project’s need for the combined support of the Section 1705 loan 

guarantee and Section 1603 grant, neither analysis questioned 

whether the project would have been built without either source of 

support.

• In another example, a developer of a wind project in Maine provided 

documentation in 2011 that it had sufficient funds to complete 

construction of the project without any additional source of capital, 

though it subsequently received a Section 1603 grant and a Section 

1705 loan guarantee and was eligible for accelerated depreciation. 

Specifically, the developer provided this information to document its 

financial capacity in support of its permit application to the Maine 

Department of Environmental Protection, which later approved the 

permit for the project. However, because we found no documented 

assessments of need were made for the federal support this project 

received, it is unclear whether it could have been built with less 

support.

Nonetheless, the incremental support agencies’ initiatives provide may be 

necessary for wind projects to be built, according to agency officials and 

 

63Treasury does not have discretion in awarding these grants; taxpayers who are eligible 

for support under the Internal Revenue Code are entitled to that support.
 

Page 41 GAO-13-136 Wind Energy

financial professionals. For instance, concerning DOE’s initiatives, its loan 

guarantees allow developers to leverage federal resources to attract 

sources of equity and debt that would otherwise not be invested, 

according to DOE. Officials from the loan guarantee programs said that, 

without loan guarantees, wind project developers can have difficulty 

obtaining private loans due to the relatively long term of the fixed rate 

loans they use to finance their projects. Title XVII of the Energy Policy Act 

of 2005 allows DOE to provide guarantees for loans with terms of up to 

30 years. According to DOE officials, there are constraints on the supply 

of private financing for large projects, and private lenders may consider 

such long-term loans to have greater risks and may be less likely to lend 

to such projects in the amounts required to fully finance the transactions. 

In addition, in commenting on a draft of this report, DOE officials said that 

long-term financing is necessary in order for debt payments to align with 

projects’ proceeds from agreements to sell their power over the long term, 

and is also necessary to avoid risks associated with changing interest 

rates and other risks that can arise from using shorter-term financing. For 

instance, they said that the Maine wind project developer’s filings with the 

state did not address any long-term financing needs for the project 

beyond its construction phase.

With respect to USDA’s initiatives, USDA officials for some initiatives told 

us that their incremental support may be necessary for wind projects to 

be built, and for the projects to fully benefit rural communities. For 

instance, officials noted that, although well-qualified projects can 

generally find the financing they need in the private market, the cost of 

private financing would be higher than the cost of financing available 

through USDA’s loan and loan guarantee programs, which would likely 

impact electric utility rates for rural ratepayers. They also said that 

projects receiving support from the High Energy Cost Grant Program may 

not be built without its support, as it tends to serve isolated communities 

where available funding for such projects may be limited. 

Regarding the PTC and other Treasury initiatives, several financial 

professionals with whom we spoke said that the initiatives provide 

financial support for many projects that would likely not be built otherwise. 

For instance, they said that the PTC is necessary in order for many wind 

projects to be financially viable. Furthermore, although it was extended in 

2013, prior to this extension, the financial professionals said the PTC’s 

scheduled expiration at the end of 2012 had caused developers and 
 

Page 42 GAO-13-136 Wind Energy

investors to suspend plans for future construction of or investment in wind 

projects.64 This expected slowdown in deployment of new wind projects is 

in line with historical evidence of prior PTC expirations being followed by 

decreases in new wind energy capacity additions. Treasury’s Section 

1603 program has also been shown to support wind projects that would 

otherwise likely not have been built. According to an LBNL analysis, the 

program supported projects that would likely not have been built using the 

PTC if the grant were not available—projects that added as much as 

2,400 megawatts of wind energy capacity in 2009.65

More broadly, according to financial professionals, wind project 

developers and investors evaluate the returns they could make on a 

range of potential projects. If the expected returns for wind projects are 

lower due to a decrease in federal support, developers and investors are 

more likely to pursue other types of projects—including solar or other 

renewable energy projects, as well as nonenergy projects—that benefit 

from federal subsidies and could provide higher returns.66

Faced with concerns about the nation’s reliance on imported oil, as well 

as fossil fuels’ contribution to global climate change, among other things, 

federal policymakers have increased the federal focus on and support for 

development of renewable energy sources, especially wind energy.

 

64The American Taxpayer Relief Act of 2012, Pub. L. No. 112-240, 126 Stat. 2313 (2013), 

retroactively extended the deadline for wind facilities to claim the PTC by one year, from 

December 31, 2012 to December 31, 2013. In addition, it changed the definition of eligible 

facilities to those that begin construction prior to the deadline, rather than those that are 

placed in service prior to the deadline. Although the PTC was retroactively extended, 

according to financial professionals, a slowdown in wind deployment is expected in 2013 

because wind project developers were uncertain about the future status of the PTC. As it 

can take 18 to 24 months to develop a new wind farm, investment decisions made in 2012 

will impact future deployment levels.

65Lawrence Berkeley National Laboratory, Preliminary Evaluation of the Impact of the 

Section 1603 Treasury Grant Program on Renewable Energy Deployment in 2009

(Berkeley, CA: April 2010).

66In addition, federal support for the construction of wind and other renewable energy 

projects is important because, according to studies by DOE’s national laboratories, these 

projects are capital-intensive to build but have no ongoing fuel costs. In contrast, fossil fuel 

projects are less capital-intensive (per unit of production) but have higher fuel costs. Also, 

whereas federal tax incentives for fossil fuel projects are often distributed throughout the 

fuel cycle (e.g., from exploration and extraction to transportation and power production), 

tax incentives for wind projects are generally used to finance capital and generation costs. 

Conclusions 
 

Page 43 GAO-13-136 Wind Energy

At the same time, states have created demand for energy from renewable 

sources through initiatives such as RPSs, supplementing support 

provided by federal agencies.

In fiscal year 2011, wind-related initiatives implemented by federal 

agencies were fragmented and, in many cases, overlapping. Further, we 

identified 10 initiatives that have provided or could provide duplicative 

support to deploy wind facilities. Though some of the 10 initiatives have 

recently expired or are scheduled to expire, other initiatives employing 

similar mechanisms such as tax expenditures, grants, and loan 

guarantees remain in place, and similar initiatives may be considered in 

the future as a means for supporting wind and other renewable energy 

sources.

In the current fiscally constrained environment, it is especially important to 

allocate scarce resources where they can be most effective. In this 

context, it is important that agencies with discretion in implementing 

initiatives that have provided or could provide duplicative support—DOE 

and USDA—ensure that they allocate support through these initiatives to 

projects that would not be built otherwise. However, these agencies do 

not make documented assessments of whether or how much of their 

initiatives’ financial support is needed for projects to be built and, as a 

result, it is unclear to what extent they assess need in order to determine 

what amount of support to provide. Moreover, it is unclear whether the 

incremental support some initiatives provided was always necessary for 

wind projects to be built.

To support federal agencies’ efforts to effectively allocate resources 

among wind projects, we recommend that the Secretaries of Energy and 

Agriculture, to the extent possible within their statutory authority, formally 

assess and document whether the incremental financial support of their 

initiatives is needed in order for applicants’ projects to be built and take 

this information into account in determining whether, or how much, 

support to provide. Such assessments could include, for example, 

information on the investors’ and developers’ projected rates of return on 

these projects, or documentation of applicants’ inability to secure private 

financing for projects. In addition, such assessments should consider the 

financial support available or provided to projects from other federal 

sources including tax expenditures and, to the extent practical, from state 

sources. In the event agencies lack discretion to consider this information 

in determining what financial support to provide, they may want to report 

this limitation to Congress.

Recommendation for 

Executive Action
 

Page 44 GAO-13-136 Wind Energy

We provided a draft of this report to the Secretaries of Energy, 

Agriculture, and the Treasury for review and comment. DOE provided 

written comments, in which it agreed with our recommendation; these 

comments are summarized below and reprinted in appendix V. USDA’s 

Rural Development provided comments by e-mail on February 11, 2013, 

stating that USDA generally concurred with the information in our report 

related to its initiatives. In addition, DOE, USDA, and Treasury provided 

technical and clarifying comments, which we incorporated as appropriate.

DOE stated in its written comments that it will now formally document its 

evaluation of applicants’ assertions regarding their inability to finance their 

projects without a federal loan guarantee, and it will clarify how it 

considers the financial need of applicants when determining what amount 

of support to provide. With regard to financing wind projects, DOE noted 

that Section 1603 grants do not provide capital for developers to use to 

construct projects, but rather the proceeds from the grants are only 

available when the related project construction is complete and the 

project is operational. In contrast, DOE noted that its loan guarantees 

provide construction and long-term debt financing. As we note in the 

report, these initiatives may address different needs of wind project 

developers, including the need for project financing prior to reaching the 

development stage required to receive tax credits or grants under the 

Section 1603 program. To emphasize DOE’s point, however, we added 

language to the report to make it clear that grants do not provide project 

sponsors with capital to construct their projects.

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Secretaries of Energy,

Agriculture, and the Treasury; the appropriate congressional committees; 

and other interested parties. In addition, the report will be available at no

charge on the GAO website at http://www.gao.gov.

If you or your staff members have any questions about this report, please 

contact me at (202) 512-3841 or ruscof@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

Agency Comments 

and Our Evaluation
 

Page 45 GAO-13-136 Wind Energy

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix VI.

Frank Rusco

Director, Natural Resources and Environment
Appendix I: Objectives, Scope, and 

Methodology

Page 46 GAO-13-136 Wind Energy

Our objectives were to (1) identify wind-related initiatives implemented by 

federal agencies in fiscal year 2011 and their key characteristics; (2) 

assess the extent of fragmentation, overlap, and duplication, if any, 

among these initiatives, and the extent to which they were coordinated; 

and (3) examine how agencies allocate support to projects through their 

initiatives and the extent to which they assess applicant need for support.

To inform our objectives, we reviewed our February 2012 report that 

identified federal agencies’ renewable energy initiatives and examined the 

federal roles the agencies’ initiatives supported in fiscal year 2010.1 That

report identified nearly 700 initiatives that were implemented across the 

federal government, of which 296 initiatives supported wind energy.2 For 

purposes of this report, we generally only included those wind-related 

initiatives categorized under the research and development or 

commercialization and deployment federal roles in our February 2012 

report. However, we included some initiatives categorized under the 

regulation, permitting, and compliance federal role if they had a clear 

focus on deployment of wind energy, such as through streamlining 

regulatory processes or fast-tracking permitting or other processes for 

wind projects.3 From this list of initiatives, we excluded those at certain 

 

1

GAO-12-260. 

2

For purposes of GAO-12-260 and, therefore, this report, we defined an initiative as a 

program or group of agency activities serving a similar purpose or function. For purposes 

of this report, we considered initiatives to be wind-related if they could or did promote or 

enable wind energy development, either exclusively or as part of a broader initiative. For 

instance, we considered initiatives with a focus on broader electricity issues—such as 

transmission or grid integration activities—to be wind-related if they encouraged or 

promoted wind energy, even if doing so was not an explicitly stated goal of the initiative.

Similarly, for initiatives such as basic science research programs that did not directly 

promote development of wind-specific technologies, we considered them to be windrelated if they included research that could promote the future development of wind 

energy.

3

For purposes of GAO-12-260, research and development includes efforts that further the 

knowledge of or the ability to create, develop, or improve technologies, including 

technology demonstrations; commercialization and deployment includes activities that 

provide incentives for the implementation or promote the competitiveness of renewable 

energy technologies in the commercial marketplace; and regulation, permitting, and 

compliance include activities that ensure compliance with federal laws and regulations 

regarding renewable energy production, use, technologies, or facilities. In addition, we 

included some initiatives categorized under the “other” federal role—which includes other 

types of efforts related to renewable energy that, for example, provide information, 

services, or other types of support—if the initiatives included some specific focus on 

promoting the development of wind energy.

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology

Page 47 GAO-13-136 Wind Energy

agencies—such as the Departments of Defense, Homeland Security, and 

State—whose initiatives generally focused on development of wind 

energy and other technologies for use in a military, border security, or 

international aid setting, rather than for use in the domestic commercial 

energy market.

For the remaining agencies and initiatives, we developed an initial 

questionnaire to collect information from officials regarding whether the 

fiscal year 2010 initiatives were still active and whether wind energy still 

received or was eligible for support under the initiatives in fiscal year 

2011.4 We also asked officials to identify any additional initiatives that 

were active and for which wind energy was eligible for support in fiscal 

year 2011. If officials wanted to remove an initiative from our list, we 

asked for additional information to support the removal. Using the 

responses from this questionnaire, we identified 82 wind-related initiatives 

at nine agencies.

To identify and describe the key characteristics of wind-related initiatives 

implemented by federal agencies, we developed a second questionnaire 

to collect information from officials responsible for the 82 initiatives. The 

questionnaire was prepopulated with information that was obtained from 

the agencies for GAO’s report on fiscal year 2010 renewable energy 

initiatives, including the initiative name, description, recipient type, and 

expiration or sunset date. We asked officials to confirm or modify this 

information as appropriate for fiscal year 2011. We requested additional 

information on the initiatives including their obligations, or revenue losses 

from tax expenditures5 for activities specifically related to wind;6 year in 

 

4

For the purposes of this report, we considered an initiative “active” if it was authorized, 

planned, funded, or implemented in the fiscal year. For example, if funds for an initiative 

were obligated in a previous fiscal year, but its activities were still ongoing in fiscal year 

2011, we considered it to be active in fiscal year 2011. Similarly, if funds for an initiative 

had not yet been obligated but the initiative was authorized or in the planning stages in 

fiscal year 2011, we considered it to be active in fiscal year 2011.

5

Tax expenditures are reductions in federal tax liabilities that result from provisions of the 

federal tax laws that (1) allow a special exclusion, exemption, or deduction from gross 

income or (2) provide a special credit, preferential tax rate, or deferral of tax liability. Tax

expenditures result in revenue losses for the federal government, which forgoes some of 

the tax revenues that it would have otherwise collected, while the taxpayers that take 

advantage of the tax expenditures pay lower taxes than they would otherwise have to pay. 

See also GAO-05-690. 
Appendix I: Objectives, Scope, and 

Methodology

Page 48 GAO-13-136 Wind Energy

which they first supported wind energy; type of wind issues and 

technology advancement activities supported; initiative-wide and windspecific goals; and efforts to coordinate with other wind-related initiatives. 

For a copy of our questionnaire, see appendix IV. We conducted pretests 

with officials from 12 initiatives across three agencies to ensure that 

respondents interpreted our questions in the way we intended (e.g., the 

questions were clear and unambiguous and terminology was used 

correctly), that the questionnaire was comprehensive and unbiased, and 

that respondents had the necessary information and ability to respond to 

the questions. An independent GAO reviewer also reviewed a draft of the 

questionnaire prior to its administration. On the basis of feedback from 

these pretests and independent review, we revised the questionnaire in 

order to improve its clarity. After completing the pretests, we sent the 

finalized questionnaires to the appropriate agency liaisons, who in turn 

sent the questionnaires to the appropriate officials. We received 

questionnaire responses for each of the 82 initiatives, resulting in a 

response rate of 100 percent. After reviewing the responses, we 

conducted follow-up e-mail exchanges or telephone discussions with 

agency officials when responses were unclear or conflicting. When 

necessary, we used the clarifying information provided by agency officials 

to update answers to questions to improve the accuracy and 

completeness of the data. To assess the reliability of obligations data, our 

questionnaire included questions on the data systems used to generate 

that data and any methodologies agencies used to develop estimates of 

obligations for their initiatives. In addition, to assess the reliability of data 

on tax subsidies provided by wind-related tax expenditures, we 

interviewed officials from the Department of the Treasury regarding the 

how the data were developed, and compared the data between the two 

publicly available sources from the Joint Committee on Taxation and the 

Office of Management and Budget. We determined that the obligations 

and tax subsidy data used in this report were of sufficient quality for our 

purposes. Because this effort was not a sample survey, it has no 

sampling errors. However, the practical difficulties of conducting any 

survey may introduce errors, commonly referred to as nonsampling 

errors. For example, difficulties in interpreting a particular question, 

sources of information available to respondents, or entering data into a 

database or analyzing them can introduce unwanted variability into the 

survey results. However, we took steps to minimize such nonsampling 

 

6

Most wind-related initiatives supported a range of energy sources in addition to wind. We 

asked agency officials to provide actual or estimated obligations data for their initiative’s 

activities that were specifically related to wind. 
Appendix I: Objectives, Scope, and 

Methodology

Page 49 GAO-13-136 Wind Energy

errors in developing the questionnaire—including using a social science 

survey specialist to help design and pretest the questionnaire. We also 

minimized the nonsampling errors when analyzing the data, including 

using a computer program for analysis, and using an independent analyst 

to review the computer program. Finally, we verified the accuracy of a 

small sample of keypunched records by comparing them with their 

corresponding questionnaires, and we corrected the errors we found. 

Less than 0.5 percent of the data items we checked had random 

keypunch errors that would not have been corrected during data 

processing.

To assess the extent of fragmentation, overlap, and duplication of windrelated initiatives, we first defined these terms based on definitions 

established in our prior reports. Specifically, for purposes of this report, 

fragmentation, overlap, and duplication, were defined as follows:

• Fragmentation occurs when more than one federal agency, or more 

than one organization within an agency, is involved in the same broad 

area of national need.

• Overlap occurs when multiple initiatives support similar wind issues, 

similar technology advancement activities, and similar recipients, as 

well as having similar goals.

• Duplication occurs when multiple initiatives provide financial support 

to the same recipient for a single wind project.7 Duplication as we 

have defined it may be necessary in some cases for specific wind 

projects to be built. However, in other cases, duplication may result in 

ineffective use of federal financial support—that is, it may result in 

some amount of support being provided for specific wind projects that 

is not needed for them to be built.

To determine the extent of fragmentation, we used agencies’ 

questionnaire responses to confirm the number of federal agencies that 

supported wind-related initiatives. To determine the extent of overlap, we 

 

7

When multiple initiatives provide financial support to the same recipient for a single 

project, we consider that financial support to be duplicative. However, for the purposes of 

this report, we do not consider the initiatives themselves to be duplicative if they also 

support other recipients aside from those who have received duplicative financial support.
Appendix I: Objectives, Scope, and 

Methodology

Page 50 GAO-13-136 Wind Energy

first analyzed the questionnaire responses to categorize initiatives’ 

recipient types into four categories, as follows8

: 

• Energy providers, developers, and manufacturers. This category 

includes organizations in the energy industry that provide electricity 

produced by wind energy, develop wind energy generation projects, 

or manufacture equipment associated with wind turbines or other 

wind-related technologies.

• Public and private researchers. This category includes researchers 

employed by or associated with federal, state, or other governmental 

entities (such as national laboratories), academic institutions, 

nonprofit organizations, or private companies.

• State, local, tribal, and other governmental organizations. This 

category includes nonfederal governmental organizations, such as 

state and local governments and quasi-governmental entities, and 

federally recognized American Indian tribes.

• Individuals. This category includes members of the general public who 

produce, develop, or use wind energy, and who receive support 

independently of their affiliation with a private, governmental or other 

organization.

We then analyzed information on the initiatives’ descriptions and goals 

provided in the questionnaire responses and categorized initiatives into all 

applicable categories that we developed for types of goals. These 

categories included initiatives that facilitated the assessment of wind 

resources; initiatives that fostered technological improvements or costreduction in wind technologies; initiatives that financed the construction or 

use of wind facilities; and initiatives that addressed policy and regulatory 

barriers to wind energy development. Once these categories were 

defined, two staff independently read through each initiative’s description 

and goals and identified all categories that likely applied to the initiative. 

They then discussed the categorizations about which they disagreed and 

came to agreement about whether or not the category applied to the 

initiative. Using agency-provided data on wind issues and technology 

 

8

In addition, we categorized certain recipients as “other” if they did not fit under any of the 

four main categories. Such recipients included federal agencies that develop or regulate 

wind resources, or private entities that did not fit under the energy industry or researcher 

categories.
Appendix I: Objectives, Scope, and 

Methodology

Page 51 GAO-13-136 Wind Energy

advancement activities supported, and our categorizations of the 

initiatives’ recipients and types of goals, we identified overlapping 

initiatives as those sharing at least one common wind issue, technology 

advancement activity, recipient type, and type of goal.

To identify duplication of federal support, we focused our review on those 

initiatives with the largest estimated obligations or revenue losses in 2011 

for activities specifically related to wind. Specifically, we first focused our 

analysis on the five lead agencies, which implemented 89 percent of 

initiatives comprising 99.9 percent of estimated obligations and all 

estimated revenue losses in 2011—the Departments of Energy (DOE), 

the Interior, Agriculture (USDA), Commerce, and the Treasury. Second, 

we focused our analysis on initiatives that included support for 

deployment, which were responsible for 99 percent of obligations and all 

estimated revenue losses in 2011. Third, because of the relatively large 

number of and variety in the initiatives that supported deployment, we 

further focused our analysis on those deployment initiatives that provided 

financial support for construction or operation of wind facilities. Fourth, we 

narrowed our focus to initiatives that included a focus on utility-scale landbased wind—the most commonly supported wind issue—and fifth, we 

narrowed our focus to initiatives with recipients that included energy 

providers, developers, or manufacturers—the most commonly support 

recipient type. Applying all of these criteria resulted in a list of 15 

initiatives, which represented 96 percent of estimated obligations and all 

revenue losses, according to best available estimates. From this list of 15 

initiatives, we reviewed agencies’ questionnaire responses, agency 

documents, and laws and regulations related to the initiatives, and spoke 

with agency officials and outside experts about them. Based on this 

review, we determined that there was only a small potential that 

duplicative support was provided by the four Treasury initiatives because 

eligibility for their support was explicitly limited to tax-exempt entities, 

which were generally not supported by other initiatives such as Treasury’s 

other tax expenditures. In addition, on the basis of our review of 

documents and discussions with agency officials and others, we 

determined that there was only a small potential for duplication of another 

initiative on our list—Treasury’s Qualifying Advanced Energy Project 

Credit—because its eligibility criteria limit its support to manufacturing 

facilities, rather than the energy generation facilities that are generally 

supported by the other initiatives we identified that have provided or could 

provide duplicative support. In addition, all available credits under the 

initiative were allocated by the end of 2010.
Appendix I: Objectives, Scope, and 

Methodology

Page 52 GAO-13-136 Wind Energy

For initiatives we identified that have provided or could provide duplicative 

support, we collected information from agency websites on financial 

support provided for projects, and we interviewed agency officials and 

reviewed program guidance and regulations for information on how 

agencies allocate support to projects through the initiatives, and efforts by 

the agencies to assess applicant need for the support of their initiatives. 

We also reviewed studies of the initiatives by DOE’s national laboratories, 

the Congressional Research Service, and other experts. In addition, we 

interviewed six financial professionals from several of the major financial 

institutions and legal firms active in wind energy project financing in 

recent years regarding the support for wind projects provided by the 

initiatives. We identified these individuals based on their presentations at 

the annual national wind industry conference held by the American Wind 

Energy Association and through reviews of industry reports, newsletters, 

and other publications. To obtain additional information about the types of 

support available to wind project developers from state governments, we 

collected and analyzed data from the Database of State Incentives for 

Renewables and Efficiency (DSIRE), a comprehensive source of 

information on state incentives and policies that promote renewable 

energy and energy efficiency, which is funded by DOE. We interviewed 

researchers who developed and maintain DSIRE regarding their 

methodology for collecting and summarizing information on state 

incentives and policies and their processes for ensuring the data are 

accurate and up-to-date, and we determined the data were sufficiently 

reliable for our purposes. We also interviewed agency officials and 

financial professionals for additional information on state initiatives.

We conducted this performance audit from February 2012 to March 2013 

in accordance with generally accepted government auditing standards.

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Federal Wind-Related Initiatives

Page 53 GAO-13-136 Wind Energy

Tables 5 through 13 below provide descriptions, by agency, of the 82 

federal wind-related initiatives we identified. The tables also provide 

information reported by agencies on initiatives that will or have expired, in 

full or in part, due to an expiration of legislative authority, depletion of 

available appropriations, or some other expiration under the law as of fall 

of 2012.

Table 5: U.S. Department of Agriculture (USDA) Wind-Related Initiatives

Initiative name

and implementing subagency Description Expiration information

Agricultural Research Service

Bioenergy National Program The mission of this Agricultural Research Service 

research program is to develop technologies for the 

sustainable commercial production of biofuels by the 

agricultural sector in ways that enhance natural resources 

without disrupting existing food, feed, and fiber markets.

Agricultural Research Service efforts under this initiative 

include a research project involving wind energy.

Wind component will be phased 

out completely by fall of 2014.

U.S. Forest Service

Landownership Management 

Program 

Under this program, the U.S. Forest Service manages 

over 193 million acres of forests and grasslands and 

provides approximately 70,000 land use authorizations 

annually for a wide variety of purposes, including rights-ofway for roads, pipelines, communication and navigation 

sites, and electric transmission and distribution facilities.

To help meet USDA’s strategic goals of assisting rural 

communities and federal energy goals, the U.S. Forest 

Service is working to diversify the energy projects for 

which it issues land use authorizations to include projects 

that produce energy from renewable sources such as 

wind, solar, and hydroelectric power.

None

National Institute of Food and Agriculture

Small Business Innovation Research 

Program: Rural Development Topic 

Area 

As part of USDA’s Small Business Innovation Research 

Program, grants awarded under this topic area develop 

new technologies or apply existing technologies to 

address concerns facing rural America. Efforts focus on 

environmental enhancement, disaster resilience, service 

delivery, and entrepreneurial and workforce skills. Topics 

may include technologies and services that promote rural 

tourism, protect the ecosystem, conserve energy, and 

develop alternative energy sources such as wind and 

solar energy (excluding biofuels).

The Small Business Innovation 

Research program has been 

reauthorized through September 

30, 2017. 

Appendix II: Federal Wind-Related Initiatives
Appendix II: Federal Wind-Related Initiatives

Page 54 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Small Business Innovation Research 

Program: Small and Mid-Size Farms 

Topic Area

As part of USDA’s Small Business Innovation Research 

Program, grants awarded under this topic area develop 

new technologies and information that will help improve 

the viability and profitability of small and mid-sized farms 

and ranches. Efforts include developing enterprises 

focused on specialty farm products, enhancing the 

efficiency and profitability of small farms, developing 

farming methods for small farms that use natural 

resources more efficiently, and developing new 

educational tools to ensure that small farmers have the 

information they need to operate their farms on a 

sustainable and profitable basis. Particular emphasis is 

placed on research to utilize renewable energy sources, 

such as wind, solar, and geothermal energy, and to 

promote improved energy efficiency and conservation in 

farming operations.

The Small Business Innovation 

Research program has been 

reauthorized through September 

30, 2017. 

Natural Resources Conservation Service

Conservation Innovation Grant 

Program 

This program, authorized under the Food, Conservation 

and Energy Act of 2008, provides grants to tribes, state or 

local governments, nongovernmental organizations, or 

individuals to develop, evaluate, implement, and monitor 

conservation approaches, incentive systems, or 

technologies. The purpose of these grants is to stimulate 

the development and adoption of innovative conservation 

approaches and technologies. The Natural Resources 

Conservation Service expects these projects to lead to the 

transfer of conservation technologies, systems, and 

approaches into agency policy, technical manuals, and 

guidance, or to the private sector. Among other areas of 

focus, the Natural Resources Conservation Service 

awards grants for projects that focus on innovative tools to 

estimate the energy and fossil fuel implications of 

cropland and conservation practices; innovative on-farm 

applications of renewable energy production technologies; 

and sustainable biomass production, harvesting, and 

handling technologies. 

Authorization for this program 

expires with the end of the Food, 

Conservation, and Energy Act of 

2008. However, the Department of 

Agriculture reported that, should 

funding remain available after the 

expiration of the act, it has the 

authority to continue program 

operations based upon existing 

regulations.

Conservation Security Program This program was not reauthorized in the 2008 Farm Bill 

and is no longer available; however, contracts written 

while the program was still authorized can span up to 10 

years and some contracts were still being implemented in 

fiscal year 2011. This provided financial and technical 

assistance to promote the conservation and improvement 

of soil, water, air, energy, plant, and animal life, and other 

conservation purposes on tribal and private lands. The 

Natural Resources Conservation Service established 

contracts for two types of renewable energy-related 

efforts: (1) payments for the bio-based portion of eligible 

blended fuel; and (2) payments for electricity generated 

from renewable sources, including wind energy.

This program no longer exists.
Appendix II: Federal Wind-Related Initiatives

Page 55 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Conservation Stewardship Program This program, authorized under the Food, Conservation 

and Energy Act of 2008, provides financial and technical 

assistance to help agricultural and forestry producers 

conserve and enhance soil, water, air, and related natural 

resources on their land by (1) undertaking additional 

conservation activities and (2) improving and maintaining 

existing conservation systems. One such conservation 

activity that is eligible for assistance under the program is 

for pumping plants powered by renewable energy—wind 

or solar—to supply water for irrigation, drainage, livestock 

watering, or wildlife. 

None

Environmental Quality Incentives 

Program 

This program, authorized under the Food, Conservation 

and Energy Act of 2008, provides financial and technical 

assistance through contracts with agricultural producers to 

implement conservation practices to address 

environmental natural resource problems. The Natural 

Resources Conservation Service reported that, while the 

program does not fund projects for the sole purpose of 

energy production, in cases of remote livestock where no 

source of electricity is available, eligible producers may 

pursue wind or solar power to support the pumping of 

water for livestock in remote regions of rangeland and 

where multiple resource concerns are addressed.

Authorization for this program 

expires with the end of the Food, 

Conservation, and Energy Act of 

2008. However, the Department of 

Agriculture reported that, should 

funding remain available after the 

expiration of the act, it has the 

authority to continue program 

operations based upon existing 

regulations.

Office of the Chief Economist

Energy and Bioenergy Research The Office of the Chief Economist advises the Secretary 

of Agriculture on economic issues related to agriculture, 

such as commodity trends and issues, as well as specific 

topics like renewable energy. The Office of the Chief 

Economist’s Office of Energy Policy and New Uses 

assists the Secretary of Agriculture in developing and 

coordinating USDA energy policy, programs, and 

strategies. The mission of this research program is to 

conduct economic analyses and evaluate policies and 

strategies concerning biomass feedstocks for renewable 

energy production. Efforts under this program have largely 

focused on liquid transportation fuels and energy sources 

used to produce heat and power, including wind.

None
Appendix II: Federal Wind-Related Initiatives

Page 56 GAO-13-136 Wind Energy

Office of the Secretary

USDA / Navy Memorandum of 

Understanding Project

Through this effort, USDA is working with the Navy to 

reduce energy consumption derived from fossil fuels, 

increase clean energy production from renewable energy 

sources to meet transportation needs, help meet the 

Secretary of the Navy’s goal of sailing the “Great Green 

Fleet,” and to support the President’s “Blueprint for a 

Secure Energy Future.” To accomplish this, USDA is 

engaging other departmental programs. USDA has 

established a memorandum of understanding with the 

Navy in support of this effort under which the departments 

agreed to share technical, program management, and 

financial expertise, and to cooperate in developing 

strategies and plans to implement renewable energy 

projects and initiatives. USDA and the Navy also agreed 

to collaborate on the funding of projects, and to support 

development of advanced biofuels and renewable energy 

processes that are sustainable from an economic, social, 

and environmental perspective. Wind energy would have 

been eligible for support through this initiative in fiscal 

year 2011, in that the initiative complements other USDA 

efforts that support wind energy, such as the Rural Energy 

for America Program, as well as the Navy and Marine 

Corps’ existing renewable energy programs. However, the 

initiative did not fund any wind projects in 2011, and no 

future funding is planned for wind projects.

This initiative is implemented 

through other programs that were 

set to expire at the end of the 

Food, Conservation, and Energy 

Act of 2008. Many programs 

under that act were extended by 

the American Taxpayer Relief Act 

of 2012, including biofuel and 

other renewable energy 

provisions.

Rural Business-Cooperative Service

Business and Industry Guaranteed 

Loan Program

The purpose of this program is to improve, develop, or 

finance business, industry, and employment, and the 

economic and environmental climate in rural communities 

by providing guaranteed loans to borrowers in rural areas.

Eligible project proposals include those that will provide 

employment; improve the economic or environmental 

climate; promote the conservation, development, and use 

of water for aquaculture; or reduce reliance on 

nonrenewable energy resources by encouraging the 

development and construction of renewable energy 

systems, including wind energy systems. Loan amounts 

are generally limited to $10 million per borrower except 

under certain circumstances, and the percentage amount 

of the loan guarantee varies depending upon the value of 

the loan.

None
Appendix II: Federal Wind-Related Initiatives

Page 57 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Rural Energy for America Program 

(formerly the Renewable Energy 

Systems and Energy Efficiency 

Improvements Program)

This program, authorized under the Food, Conservation 

and Energy Act of 2008, provides funding for guaranteed 

loans and grants to farmers, ranchers, and small 

businesses in rural areas to assist with purchasing and 

installing renewable energy systems, such as wind energy 

projects, and energy efficiency improvements.

Guaranteed loans under the program encourage the 

commercial financing of renewable energy and energy 

efficiency projects by guaranteeing between 60 and 85 

percent of the loan (depending upon the amount of the 

loan). Loans may be guaranteed up to 75 percent of a 

project’s cost or $25 million. Grants under the program are 

awarded on a competitive basis and can be up to 25 

percent of total eligible project costs or $500,000 for 

renewable energy systems and $50,000 for renewable 

energy feasibility studies. At least 20 percent of the 

renewable energy system grant funds awarded must be 

for grants of $20,000 or less. In addition, the program 

provides grants for energy audits.

Authorization for this program was 

set to expire with the end of the 

Food, Conservation, and Energy 

Act of 2008. On January 2, 2013, 

the American Taxpayer Relief Act 

of 2012 authorized discretionary

funding for the program for fiscal 

year 2013. The Department of 

Agriculture reported that, should 

funding remain available after the 

expiration of the act, it has the 

authority to continue program 

operations based upon existing 

regulations.

Rural Utilities Service

Direct and Guaranteed Electric Loan 

Program 

This program, authorized under the Rural Electrification 

Act of 1936, provides loans and loan guarantees to 

establish and improve electric service in rural areas and to 

assist electric borrowers to implement demand side 

management, energy efficiency and conservation 

programs, and on-grid and off-grid renewable energy 

systems including wind energy systems. These loans and 

loan guarantees provide financing to eligible nonprofit 

utility organizations, such as electric co-ops and public 

utility districts, as well as for-profit entities. The Rural 

Utilities Service reported that providing loans for 

renewable energy is one of the primary purposes of the 

Rural Electrification Act and, to advance this purpose, the 

agency gives priority to completed renewable energy 

project loan applications in its annual processing queue.

In addition, Rural Utilities Service reported that it is 

reviewing its policies and regulations to initiate, as 

appropriate, additional accommodations to support 

renewable energy project lending to a wider range of 

applicants consistent with the underlying statutory 

requirements for prudent lending and adequate loan 

security.

None
Appendix II: Federal Wind-Related Initiatives

Page 58 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

High Energy Cost Grant Program This program, authorized under the Rural Electrification 

Act of 1936, provides grants for energy generation, 

transmission, and distribution facilities serving rural 

communities with annual average home energy costs that 

exceed 275 percent of the national average. Applicants

may receive grants for on-grid and off-grid renewable 

energy systems, such as wind energy systems, as well as 

energy conservation and efficiency projects. In addition, 

the Rural Utilities Service reported that the Rural 

Electrification Act also includes loan authority, but that no 

funds have been appropriated for loans under this 

program.

None

Source: GAO analysis of agency-provided data.

Table 6: Department of Commerce Wind-Related Initiatives

Initiative name

and implementing subagency Description Expiration information

Economic Development Administration

Environmentally-Sustainable 

Development Investment Priority

Economic Development Administration awards grants that 

are intended to advance the administration’s key 

investment priorities, one of which is environmentally 

sustainable development. This priority focuses the 

Economic Development Administration’s existing placebased grant programs (planning, technical assistance, 

and infrastructure construction) in support of promoting 

economic development projects that, among other things, 

enhance environmental quality. Eligible projects include 

wind and other renewable energy economic development 

projects.

None

Global Climate Change Mitigation 

Incentive Fund

The Global Climate Change Mitigation Incentive Fund was 

established to strengthen the linkages between economic 

development and environmental quality. It finances 

economic development projects that create jobs and 

increase private capital investment in efforts to limit the 

nation’s dependence on fossil fuels, enhance energy 

efficiency, curb greenhouse gas emissions, and protect 

natural systems. Eligible projects include economic 

development projects that support wind and other sources 

of renewable energy.

The Global Climate Change 

Mitigation Incentive Fund is not a 

standing program, but rather a 

congressionally directed funding 

stream, which requires annual 

submission of a report/spending 

plan to Congress summarizing 

how the funds will be used.
Appendix II: Federal Wind-Related Initiatives

Page 59 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

International Trade Association

International Buyer Program The International Buyer Program is an initiative that 

supports U.S. companies at U.S. trade shows by 

recruiting and escorting foreign buyer delegations to the 

shows to meet with U.S. companies to participate in 

business-to-business matchmaking activities. These 

shows often include one-on-one meetings between U.S. 

companies and the international buyers. The initiative 

supported several major shows focused on renewable 

energy, including the WINDPOWER 2012 Conference & 

Exhibition featuring 51 foreign buyer delegates.

None

Market Development Cooperator 

Program 

Under this initiative, industry groups—such as trade 

associations and chambers of commerce—compete for 

International Trade Association-awarded grants that fund 

projects to enhance their industry’s competitive position in 

innovative ways. The selected groups establish 

partnerships with the International Trade Association, 

which provides financial and technical assistance to 

enhance global competitiveness of U.S. industries. 

Partnerships have included several related to renewable 

energy, such as the Green Export Enabler program and 

the Colorado Export of Innovative and Sustainable 

Technologies program.

None

Renewable Energy and Energy 

Efficiency Export Initiative

This initiative represents the first-ever national effort to 

coordinate export promotion of renewable energy and 

energy efficiency technologies, including wind energy 

technologies. It is led by the Department of Commerce, 

and includes commitments from eight U.S. government 

agencies—including the Departments of Agriculture, 

Energy, and State—to help tailor financing products to the 

needs of U.S. renewable energy and energy efficiency 

companies, enhance market access and trade promotion 

for their products, and improve the delivery of U.S. 

government services to these companies. An example of 

projects supported by the initiative includes the 

commitment to lead several trade policy missions to key 

potential markets for U.S. companies.

None

National Institute of Standards and Technology

National Institute of Standards and 

Technology Smart Grid Program

The National Institute of Standards and Technology’s 

efforts in this area involve coordinating the development of 

interoperability standards needed to accelerate 

implementation of a smart grid system. The smart grid is a 

planned nationwide electric transmission and distribution 

network that uses information technology to deliver 

electricity efficiently, reliably, and securely. Conceptually, 

a smart grid system will enable integration of wind and 

other renewable and alternate energy sources into the 

electric grid.

None
Appendix II: Federal Wind-Related Initiatives

Page 60 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

National Oceanic and Atmospheric Administration

Joint Wind Energy Program: 

Atmospheric Velocity Gradients

Through a cooperative agreement, the National Oceanic 

and Atmospheric Administration’s Air Research 

Laboratory is working with the private sector to conduct 

wind energy research to demonstrate the potential for 

significantly improving the prediction of winds at various 

heights. These efforts will help improve short-term 

predictions of wind farm energy production.

None

Program Development This initiative explores ways to leverage the National 

Oceanic and Atmospheric Administration Earth Systems 

Research Laboratory’s ongoing research for renewable 

energy purposes. For example, while another National 

Oceanic and Atmospheric Administration program collects 

wind data for atmospheric research, this initiative explores 

how that same data could be used for renewable energy 

purposes.

None

Renewable Energy Research The purpose of this initiative is to conduct research in four 

areas: (1) wind power observations and forecasting, (2) 

solar power observations and forecasting, (3) climate 

analyses to assess wind and solar resources, and (4) 

climate change impacts on wind and solar resources. For 

instance, a study has been under way to determine wind 

and solar resource availability over the continental United 

States, and a comparison of the estimated wind and solar 

power that could be produced against energy load during 

the years 2006 through 2008. Researchers will present 

their results to academia, industry, and others.

None

MarineCadastre.gov The purpose of this program is to support wind energy 

development and other uses of the outer continental shelf 

by providing mapping information on locations for project 

planning and siting. This information is intended to help 

renewable energy developers in initial planning stages to 

identify multiple uses and avoid conflicts before producing 

plans for development. This initiative is managed jointly by 

the National Oceanic and Atmospheric Administration and 

the Department of the Interior’s Bureau of Ocean Energy 

Management, Regulation and Enforcement.

None

U.S. Patent and Trademark Organization

Green Technology Pilot Program This initiative supports investment in renewable energy, 

including wind energy, by spurring inventive activity with 

the prospect of early intellectual property protection. Such 

protection is often critical in the ability to raise the venture 

capital for development and commercialization of the 

technology. The U.S. Patent and Trademark 

Organization’s Patent Office reviews applications 

pertaining to green technologies—such as development of 

renewable energy resources—on an expedited basis, 

which allows for earlier acquisition of patent protection.

The Green Technology Pilot 

Program expired in February 

2012.

Source: GAO analysis of agency-provided data.
Appendix II: Federal Wind-Related Initiatives

Page 61 GAO-13-136 Wind Energy

Table 7: Department of Energy (DOE) Wind-Related Initiatives

Initiative name

and implementing subagency Description Expiration information

Advanced Research Projects Agency – Energy

Agile Delivery of Electrical Power 

Technology 

This initiative supports Advanced Research Projects 

Agency-Energy’s efforts to invest in materials—such those 

used in power converters—that facilitate key advances in 

electrical power technology, including those that enable 

solar photovoltaics and wind turbine generators.

The Advanced Research Projects 

Agency-Energy’s authorizing 

legislation, the America Creating 

Opportunities to Meaningfully 

Promote Excellence in 

Technology, Education, and 

Science Act of 2010, was recently 

reauthorized until 2013.

Advanced Research Projects AgencyEnergy Funding Opportunity 

Announcement 1 

Under this initiative, Advanced Research Projects AgencyEnergy provides funding to support research on a variety 

of energy ideas and technologies. This research funding is 

focused on applicants with well-formed research and 

development plans for potentially high-impact concepts or 

new technologies, including wind and other renewable 

technologies.

The Advanced Research Projects 

Agency-Energy’s authorizing 

legislation, the America Creating 

Opportunities to Meaningfully 

Promote Excellence in 

Technology, Education, and 

Science Act of 2010, was recently 

reauthorized until 2013.

Grid-Scale Rampable Intermittent 

Dispatchable Storage 

This initiative supports Advanced Research Projects 

Agency-Energy’s efforts to develop new technologies that 

enable widespread use of cost-effective grid-scale energy 

storage. Specifically, it focuses on developing 

technologies that can be widely implemented across the 

power grid to mitigate variability in energy generated from 

renewable sources such as wind.

The Advanced Research Projects 

Agency-Energy’s authorizing 

legislation, the America Creating 

Opportunities to Meaningfully 

Promote Excellence in 

Technology, Education, and 

Science Act of 2010, was recently 

reauthorized until 2013.

Office of Energy Efficiency and Renewable Energy (EERE)

Energy Efficiency and Conservation 

Block Grants 

The Energy Efficiency and Conservation Block Grant 

Program provides assistance to cities, counties, states, 

territories, and tribes to develop and implement projects 

and programs that reduce fossil fuel emissions; reduce 

the total energy use of the eligible entities; improve energy 

efficiency in various economic sectors; and create and 

retain jobs. Most of the funding provided under this 

program supports formula grants, although some funding 

supports competitively awarded grants or is used to 

develop technical assistance tools. Program funds may be 

used for a variety of energy efficiency and conservation 

programs and projects, as well as for renewable energy 

projects including wind projects. Renewable energy 

projects that generate electricity and are installed on or in 

a government building are expressly eligible under the 

statute. Other renewable energy activities may be eligible 

as part of a comprehensive energy efficiency program. 

DOE reported that a significant number of grantees have 

used program funding to implement projects that include 

renewable energy elements.

This program was funded through 

American Recovery and 

Reinvestment Act of 2009 funding, 

and no additional appropriations 

were granted. The Recovery Act 

funds were required to be 

obligated by September 30, 2010, 

and expended by September 30, 

2013.
Appendix II: Federal Wind-Related Initiatives

Page 62 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Hydrogen and Fuel Cell Technologies 

Crosscutting Activities

This initiative focuses on crosscutting functions for 

hydrogen and fuel cell technologies such as 

manufacturing, technology validation, safety codes and 

standards, and education. It also analyzes technologies to 

identify gaps and help direct future research and 

development. Hydrogen and fuel cell technologies include 

those produced from renewable resources such as 

biomass, solar, wind, etc.

The Energy Policy Act of 2005 

and the Energy Independence and 

Security Act of 2007 provide 

authorization for these activities 

through fiscal year 2015 or 2020, 

depending upon the activity.

Hydrogen Fuel R&D This initiative focuses on research and development to 

develop hydrogen production, delivery, and storage 

technologies, including those from hydrogen produced 

using renewable energy sources such as biomass, solar, 

wind, etc.

The Energy Policy Act of 2005 

and the Energy Independence and 

Security Act of 2007 provide 

authorization for these activities 

through fiscal year 2015 or 2020, 

depending upon the activity.

State Energy Program The State Energy Program provides financial and 

technical assistance to grantees through formula and 

competitive grants for the deployment of energy efficiency 

and renewable energy technologies, including wind 

energy technologies. States use their formula grants, plus 

a 20 percent match that they provide, to develop state 

strategies and goals to address their energy priorities. In 

designing their programs, grantees choose a list of eligible 

activities to fund with their grant, including a variety of 

renewable energy-related activities. DOE reported that a 

significant number of grantees have incorporated 

renewable energy activities into their state energy 

programs. Competitive grants awarded under the State 

Energy Program assist grantees with the adoption of 

energy efficiency/renewable energy products and 

technologies.

None

Tribal Energy Program This program promotes energy self-sufficiency, economic 

development, and employment on Tribal lands through the 

use of renewable energy and energy efficiency 

technologies, including wind energy technologies. Under 

this program, DOE provides competitively-awarded 

funding and technical assistance to Tribes to evaluate and 

develop their renewable energy resources and reduce 

their energy consumption through efficiency and 

weatherization. In addition, DOE provides training and 

outreach to Tribal governments, including student 

internships; regional workshops and Webinars to learn 

about renewable energy and energy efficiency and how to 

develop those resources; and renewable energy short 

courses covering renewable energy and efficiency 

options, business development, and project financing.

None
Appendix II: Federal Wind-Related Initiatives

Page 63 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Wind Energy - Offshore Wind Through this initiative, EERE seeks to promote and 

accelerate the deployment of offshore wind power 

technologies in U.S. waters. Under this initiative, DOE 

plans to develop innovative technologies to reduce the 

cost of offshore wind energy. DOE will work with Interior 

and other agencies to shorten the timeline for deploying 

these technologies, and will partner with industry to 

demonstrate commercially and technically viable offshore 

wind technology. Efforts include research, development, 

demonstration, education, outreach, and interagency 

coordination.

None

Wind Energy - Technology 

Application

Under this initiative, EERE helps prepare and accelerate 

the market adoption of wind technologies. It includes two 

components: (1) systems integration and (2) technology 

acceptance. The systems integration component focuses 

on planning and operating wind energy projects, and 

anticipating and overcoming technical issues associated 

with interconnecting large amounts of wind and other 

renewable energy to the electricity grid. The technology 

acceptance component addresses opportunities for and 

barriers to the use of wind energy systems such as 

mitigating wind-radar interference; providing state and 

regional energy sector education and outreach; and 

investigating and mitigating social, environmental, and 

wildlife issues associated with wind energy development.

None

Wind Energy - Technology Viability This initiative’s activities focus on research, development, 

and testing to improve the performance, costeffectiveness, manufacturing, and reliability of large and 

distributed wind energy systems. It has three components: 

(1) low wind speed technology, (2) distributed wind 

technology, and (3) supporting research and testing.

Distributed wind technology, which leverages transmission 

availability off the main grid, enables community 

ownership and builds support for wind in general.

None
Appendix II: Federal Wind-Related Initiatives

Page 64 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Loan Programs Office

Title XVII Section 1703 Loan 

Guarantee Program

Under Section 1703 of Title XVII of the Energy Policy Act 

of 2005, DOE provides loans to support innovative energy 

technologies that are typically unable to obtain 

conventional private financing due to high technology 

risks. In addition, the technologies must avoid, reduce, or 

sequester air pollutants or emissions of greenhouse 

gases. Eligible technologies under this initiative included 

biomass, solar, wind, hydropower, and alternative fuel 

vehicles, among others. Under Section 1703, borrowers 

were to pay DOE for the credit subsidy costs. However, 

DOE noted that once the Section 1705 Loan Guarantee 

Program (under which the credit subsidy cost is paid with 

appropriated funds) was established under the Recovery 

Act specifically to support renewable energy and certain 

other projects, renewable energy projects were supported 

under the Section 1705 Loan Guarantee Program rather 

than the Section 1703 Loan Guarantee Program. DOE 

now has $170 million in appropriated funds to pay the 

credit subsidy cost for renewable energy and energy 

efficiency projects under Section 1703.

None

Title XVII Section 1705 Loan 

Guarantee Program

The Recovery Act added Section 1705 to the Energy 

Policy Act of 2005. Section 1705 authorized a temporary 

program to provide loan guarantees for certain renewable 

energy systems, electric power transmission systems and 

innovative biofuel projects that began construction no later 

than September 30, 2011. To help implement this 

authority, DOE established the Financial Institution 

Partnership Program, a risk-sharing partnership between 

DOE and qualified finance organizations. Through this 

program, DOE pays the credit subsidy costs of loan 

guarantees using funds appropriated for this purpose, and 

guarantees up to 80 percent of a loan provided for a 

renewable energy generation project by qualified financial 

institutions. In addition, under the 1705 authority, DOE 

funded eligible innovative wind and other renewable 

energy projects through the Federal Financing Bank.

The American Recovery and 

Reinvestment Act of 2009 added 

Section 1705 to the Energy Policy 

Act of 2005. The initiative expired 

on September 30, 2011.

Multiple

Small Business Innovation 

Research/Small Business Technology 

Transfer - Wind Energy Technology 

Development Topic Area

Under this initiative, DOE provides grant funding to 

stimulate technological innovation in small businesses to 

meet federal agency research and development needs. 

The solicitation contains technical topics in a number of 

research areas of interest to DOE. Grants awarded under 

this topic area promote the development of wind energy 

technologies. Efforts focus on manufacturing and 

assembly, component reliability, and monitoring.

Continuation of the Small 

Business Innovation 

Research/Small Business 

Technology Transfer programs is 

contingent upon their 

reauthorization.
Appendix II: Federal Wind-Related Initiatives

Page 65 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Office of Electricity Delivery & Energy Reliability

Clean Energy Transmission and 

Reliability

This initiative focuses on developing tools and techniques 

to address system reliability issues, including challenges 

that renewable energy sources such as wind and solar 

power pose to electricity grid operators, who need to 

incorporate these variable generation sources without 

compromising reliability. The Office of Electricity Delivery 

& Energy Reliability’s efforts under this initiative also 

include communications, education, and outreach.

None

Funding of five interconnection-wide 

transmission planning & associated 

projects

Through this initiative, the Office of Electricity Delivery & 

Energy Reliability aims to facilitate the development or 

strengthening of capabilities in each of the three 

interconnections (Western, Eastern, Texas) serving the 

lower 48 states of the United States by preparing analyses 

of transmission requirements under a broad range of 

alternative futures and developing long-term 

interconnection-wide transmission expansion plans. This 

includes efforts to identify renewable resources such as 

wind that are suitable for near-term development to supply 

electricity to meet state renewable portfolio standards. 

None

Office of Electricity Delivery & Energy 

Reliability Energy Storage

The goal of this initiative is to develop advanced energy 

storage technologies and systems that will increase the 

reliability, performance, and competitiveness of electricity 

generation and transmission in the electric grid and in 

stand-alone systems. These efforts also facilitate 

integration of renewable energy sources such as wind into 

the electricity grid. Through the initiative, DOE works to 

build a community around this goal in collaboration with 

industry, academia, and government institutions to ensure 

that technology development meets all stakeholder needs 

and interests. The initiative also provides grants to private 

companies to encourage commercialization and 

deployment.

None

Office of Electricity Delivery & Energy 

Reliability Permitting, Siting, and 

Analysis – various projects

This initiative provides technical and financial assistance 

to states and regional entities to help develop 

infrastructure required to utilize renewable energy, among 

other resources. For example, the initiative assists state 

public utility commissions, state legislatures, regional state 

associations, and governors’ offices on renewable energy 

policies and portfolio standards, among other topics. 

Among other things, DOE issued its second electric 

transmission congestion study, which includes 

consideration of remote renewable resources including 

wind to comply with provisions of the Recovery Act.

None
Appendix II: Federal Wind-Related Initiatives

Page 66 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Office of Indian Energy Policy and Programs

Strategic Technical Assistance 

Response Team Program

The Strategic Technical Assistance Response Team 

initiative is a project of the DOE Office of Indian Energy 

Policy and Programs aimed at advancing next-generation 

energy development in Indian Country. Through the 

Strategic Technical Assistance Response Team Program, 

early-stage project development technical assistance is 

provided to 10 selected projects—5 in Alaska and 5 in the 

48 contiguous states.

None

Power Marketing Administrations

Bonneville Power Administration 

Wind Integration

The Bonneville Power Administration is a federal entity 

that is also one of the largest transmission providers in the 

West. The Bonneville Power Administration has played an 

active role in facilitating the development of wind energy in 

the Pacific Northwest, and its area of operation has 

become a test bed for management of large and growing 

amounts of intermittent wind energy to peak electricity 

load. The Bonneville Power Administration is piloting and 

implementing operational practices to manage the 

intermittent wind resource in a variety of key areas. The 

Bonneville Power Administration works to help the region 

meet its energy and environmental goals while 

simultaneously providing reliable load service and 

satisfying multiple nonpower constraints, such as 

protection of endangered fish.

None

Western Area Power Administration—

Operations

Western Area Power is participating in the Western 

Interconnection Joint Initiatives projects intended to 

facilitate the integration of variable energy resources, 

including wind energy. These initiatives include tools or 

processes such as Intra-hour Scheduling, Dynamic 

Scheduling System, and Intra-hour Transaction 

Accelerator Platform.

None
Appendix II: Federal Wind-Related Initiatives

Page 67 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Western Area Power Administration—

Transmission Services

The Western Area Power Administration began its 

Transmission Infrastructure Program in 2009 under 

section 402 of the Recovery Act, for the purpose of 

constructing, financing, facilitating, planning, operating, 

maintaining, or studying construction of new or upgraded 

electric power transmission lines and related facilities with 

at least one terminus within the area served by Western, 

and for delivering or facilitating the delivery of power 

generated by renewable energy resources constructed or 

reasonably expected to be constructed after the date 

section 402 was enacted. The program uses authority 

granted under this section to borrow up to $3.25 billion 

from the U.S. Department of the Treasury to accomplish 

these purposes. Pursuant to the Recovery Act, projects 

under the program must (1) be in the public interest; (2) 

not adversely impact system reliability or operations, or 

other statutory obligations; (3) offer reasonable 

expectation that proceeds will be adequate to meet 

Western’s repayment obligations; (4) use a public process 

to set transmission rates; (5) have the necessary 

capability to obtain and deliver generation-related ancillary 

services; and (6) provide proceeds to repay principal and 

interest of the loan from the Treasury. 

None

Source: GAO analysis of agency-provided data.

Table 8: Department of the Interior Wind-Related Initiatives

Initiative name

and implementing subagency Description Expiration information

Bureau of Land Management

Recovery Act Renewable Energy 

Efforts

These efforts are intended to support the Bureau of Land 

Management’s portfolio of renewable energy work, 

through studies related to wind and solar energy right-ofway authorizations on the bureau’s lands. Projects funded 

under the Recovery Act included resource assessments 

and studies on environmental impacts of wind and solar 

development.

These are one-time activities 

authorized under the American 

Recovery and Reinvestment Act 

of 2009.
Appendix II: Federal Wind-Related Initiatives

Page 68 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Renewable Energy Coordination 

Offices Implementation

To facilitate the development of wind and solar energy 

projects on Bureau of Land Management lands, the 

bureau has increased dedicated teams of staff to 

streamline the review and approval of applications and 

conduct analysis required by the National Environmental 

Policy Act. In particular, this initiative facilitated further 

development of the Renewable Energy Coordination 

Offices through staffing of the Renewable Energy Support 

personnel in Colorado, Idaho, Montana, New Mexico, 

Oregon/Washington, and Utah. Support personnel provide 

additional capacity and resources in those states with 

lower volume workload but significant renewable energy 

workloads. 

None

Wind Energy Authorizations and 

Operations on Bureau of Land 

Management Public Lands

The purpose of this initiative is to regulate wind energy 

development on Bureau of Land Management lands. The 

bureau processes and approves developers’ applications, 

and collects land rents and other fees as projects are built 

and operated.

None

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE)a

Environmental Studies Program Through this program, BOEMRE provides information 

needed for prediction, assessment, and management of 

impacts on the human, marine, and coastal environments 

of the outer continental shelf and nearshore areas that 

may be affected by oil and gas, wind and other renewable 

energy, or other development. Specific research activities 

focus on establishing baseline information for assessing 

environmental impacts, constructing models to predict 

impacts, and environmental monitoring to provide trend 

data on significant changes in the environment.

None 

Renewable Energy Program 

Development and Implementation 

Through these efforts, BOEMRE implements and 

manages its program to authorize orderly, safe, and 

environmentally responsible renewable energy 

development on the outer continental shelf, as established 

in 2009 by the department’s renewable energy regulatory 

framework document. The bureau also coordinates these 

efforts with ongoing state and local renewable energy 

efforts, as required by the Energy Policy Act of 2005. 

Specific efforts include renewable energy resource 

assessment and transmission studies; environmental 

studies; public stakeholder meetings; and support for 

intergovernmental and interagency meetings and 

information exchange. These efforts support the bureau’s 

efforts to grant leases, easements, and rights-of-way for 

wind and other renewable energy development activities 

on the outer continental shelf. 

None
Appendix II: Federal Wind-Related Initiatives

Page 69 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Renewable Energy Program: Ensure 

Fair Return for Renewable Energy 

Resources 

By statute, renewable energy leases must be issued 

competitively unless the Secretary determines, after public 

notice of a proposal, that there is no competitive interest.

BOEMRE is responsible for ensuring the public will 

receive a fair return for the competitive and 

noncompetitive award of renewable energy leases. The 

regulations authorize a range of auction formats that have 

not been used previously by BOEMRE. These formats 

may be implemented under appropriate circumstances to 

encourage competitive auctions. BOEMRE’s ability to set 

reasonable commercial lease terms and auction 

parameters necessary to earn a fair return is directly 

related to its ability to conduct accurate wind resource 

assessments and economic modeling of projects within a 

given wind energy area. The initiative supports BOEMRE 

on these issues.

None

Renewable Energy Program: 

Environmental Compliance 

Through this program, BOEMRE works to ensure that the 

bureau’s renewable energy activities comply with all 

applicable laws and regulations, including the National 

Environmental Policy Act. To facilitate siting, leasing, and 

construction of new projects, the bureau prepares 

environmental assessments and environmental impact 

statements to inform decisions on lease and grant 

issuance, and plan approval. The bureau has focused 

these efforts on supporting the Secretary of the Interior’s 

“Smart form the Start” initiative to facilitate the 

development of wind energy on the Atlantic Outer 

Continental Shelf.

None

Renewable Energy Program: 

Multipurpose Marine Cadastre 

This program supports wind energy development, and 

coastal and marine spatial planning on the outer 

continental shelf in general, by providing mapping 

information on locations for project planning and siting. 

The bureau provides data, data services, and a geospatial 

viewer with information on state and federal areas of 

jurisdiction over marine and coastal property, as well as 

other nonjurisdictional data sets. This information is 

intended to help renewable energy developers in initial 

planning stages to identify multiple uses and avoid 

conflicts before producing plans for development. The 

National Oceanic and Atmospheric Administration 

provides in-kind support as the technical lead agency for 

this program.

Authority for this initiative will 

expire at the end of fiscal year 

2014.
Appendix II: Federal Wind-Related Initiatives

Page 70 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Renewable Energy Program: Safety 

Program and Inspections 

The current focus of this program is to identify the critical 

components of an offshore wind turbine, how it might fail, 

and what inspection techniques should be followed. The 

bureau has conducted studies to identify this information 

and used it to develop detailed guidance for agency 

inspectors for the inspection of offshore wind energy 

installations. The office has also commissioned a study by 

the National Academy of Science to determine best 

practices for the design, fabrication, and installation of 

offshore wind turbines, and is collaborating with the 

American Wind Energy Association to develop a 

consensus industry guideline on appropriate standards for 

these turbines.

None

Resource Evaluation Program: 

Economic Analysis 

BOEMRE has a responsibility to conduct economic 

analyses for the evaluation of resources on tracts offered 

for development, to ensure the public receives a fair 

return. BOEMRE conducts financial analysis of the fees to 

be included in commercial leases, provides semiannual 

renewable energy revenue and activity projections to the 

Office of Management and Budget, and conducts benefitcost analysis of proposed legislative and regulatory 

policies, which will also address regional economic 

assessments as the program evolves.

None

Resource Evaluation Program: 

Resource Evaluation 

Resource evaluation is necessary to ensure a fair return 

and to assess the offshore renewable energy resource 

potential in areas that are being considered for leasing. 

Presently, this initiative is primarily focused on the 

collection and quantification of wind resource data 

developed by the DOE, as well as the development of inhouse capabilities with respect to the collection and 

quantification of wind, current, and wave resources. Other 

objectives of this initiative include use of the information 

by BOEMRE to determine minimum bid amounts for 

competitive lease sales, providing review of potentially 

dangerous conditions related to the placement of facilities 

on the seabed, and generating other information 

necessary to support lease sales.

None

Technology Assessment and 

Research Program 

Under this program, the bureau seeks to ensure that 

industry operations on the outer continental shelf 

incorporate the use of the best available and safest 

technologies, as required by federal laws including the 

Outer Continental Shelf Lands Act Amendments of 1978 

and the Energy Policy Act of 2005. There are two 

components to the Technology Assessment and 

Research Studies Program: operational safety and 

engineering research, and renewable energy research. 

Within the renewable energy research component, the 

office has funded industry researchers to study offshore 

wind technologies.

None
Appendix II: Federal Wind-Related Initiatives

Page 71 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Bureau of Reclamation

Desalination and Water Purification 

Research and Development Program

This program is intended to address the needs for water 

desalination and purification in locations that do not have 

adequate traditional sources of water by lowering the 

costs of desalination and purification technologies and 

understanding and minimizing associated environmental 

impacts. Through the program, the Bureau of Reclamation 

provides financial assistance to water utilities, state and 

local governments, industry, and other parties, and 

emphasizes the application of renewable energy 

technologies such as wind, particularly for minimizing 

environmental impacts of desalination and purification.

This initiative ended at the end of 

fiscal year 2011.

Science and Technology Program This program provides funding on a competitive basis to 

Bureau of Reclamation researchers to improve the 

operations, efficiency, and maintenance of the bureau’s 

hydropower resources. The bureau also provides funding 

to support research on other renewable energy generation 

systems, such as wind systems, to understand how they 

can improve the bureau’s ability to carry out its mission.

This office also funds an interagency agreement with the 

National Renewable Energy Laboratory to assist 

Reclamation in developing both facility- and utility-scale 

renewable installations.

None

Bureau of Indian Affairs

Minerals & Mining Program: 

Renewable Energy Projects

This program funds a broad range of renewable energy 

projects on tribal lands, with the goal of enabling tribes to 

take over the federal government’s role of oversight and 

development of resources on tribal lands. Indian Affairs 

funds projects through an annual competitive grant award 

process, and projects have included economic analyses, 

feasibility studies, resource assessments, marketing of 

resources, and construction of facilities. These projects 

have involved a wide range of renewable resources, 

including woody biomass, waste conversion, geothermal, 

hydroelectric, solar, and wind.

None
Appendix II: Federal Wind-Related Initiatives

Page 72 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Office of Insular Affairs

Insular Plan for Alternative and 

Renewable Energy

As part of a broader strategic planning effort for the 

islands required by the Assistant Secretary of Insular 

Affairs, the Governors of the Pacific territories of American 

Samoa, Guam, and the Commonwealth of the Northern 

Mariana Islands each established energy steering 

committees to guide the development of energy on their 

islands. In addition, the Office of Insular Affairs funds 

DOE’s National Renewable Energy Laboratory to conduct 

renewable energy assessments and develop draft 

strategic energy plans for each territory. Among other 

things, these plans have identified opportunities for the 

territories to develop wind, solar, geothermal, biomass, 

power system upgrades, improvements to existing diesel 

generators, and the implementation of island-wide energy 

efficiency and conservation programs. The Office of 

Insular Affairs recently expanded the laboratory’s scope of 

work to include addressing the needs of the U.S. freely 

associated states, which include the Republic of the 

Marshall Islands, the Republic of Palau, and the 

Federated States of Micronesia. Working with the island 

leadership, local utilities, and other stake holders, the 

laboratory is examining realistic, cost-effective ways of 

employing renewable energy to solve the biggest 

economic challenge facing the islands, i.e., their 100 

percent dependence on imported fossil fuels. 

None

Source: GAO analysis of agency-provided data.

a

On October 1, 2011, BOEMRE reorganized into two independent entities: the Bureau of Ocean 

Energy Management and the Bureau of Safety and Environmental Enforcement. The Bureau of 

Ocean Energy Management is responsible for managing development of the nation’s offshore 

resources in an environmentally and economically responsible way, and its activities include oversight 

of leasing, environmental studies, and economic analysis. The Bureau of Safety and Environmental 

Enforcement is responsible for enforcing safety and environmental regulations. However, given the 

time frame of our work, we refer to BOEMRE in this report.
Appendix II: Federal Wind-Related Initiatives

Page 73 GAO-13-136 Wind Energy

Table 9: Department of the Treasury Wind-Related Initiatives

Initiative name

and implementing subagency Description Expiration information

Internal Revenue Service (IRS)

Accelerated Depreciation Recovery 

Periods for Specific Energy Property

Under the federal Modified Accelerated Cost-Recovery 

System, businesses may recover the costs of investments 

in certain property through depreciation deductions from a 

taxpayer’s taxable income. The system sets the period of 

time over which various types of property may be 

depreciated from 3 to 50 years, and classifies a number of 

renewable energy technologies as 5-year property, 

including wind. The Joint Committee on Taxation 

generally classifies as tax expenditures cost recovery 

allowances that are more favorable than those provided 

under the alternative depreciation system (Internal 

Revenue Code Section 168(g)), which provides for 

straight-line recovery over tax lives that are longer than 

those permitted under the accelerated system. However, 

the Economic Stimulus Act of 2008 included a 50 percent 

first-year bonus depreciation provision for a wide range of 

eligible properties including renewable energy systems. 

This provision was extended by the American Recovery 

and Reinvestment Act of 2009, and by the Creating Small 

Business Jobs Act of 2010. Bonus depreciation was 

further extended through 2012 by the Tax Relief, 

Unemployment Insurance Reauthorization, and Job 

Creation Act of 2010, with a 100 percent deduction 

allowed for property acquired after September 8, 2010, 

and before January 1, 2012. The American Taxpayer 

Relief Act of 2012 extended 50 percent expensing for

qualifying property purchased and placed in service 

before January 1, 2014. The 50 percent bonus 

depreciation narrowed any tax differences between 

eligible assets based on cost recovery provisions, and the 

100 percent bonus depreciation eliminated those 

differences altogether under the provision for allowing a 

full write-off of asset acquisition costs.

Bonus depreciation was extended 

by the American Taxpayer Relief 

Act of 2012 through 2013 for 

qualifying property placed in 

service before January 1, 2014 (or 

January 1, 2015 for certain other 

assets).
Appendix II: Federal Wind-Related Initiatives

Page 74 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Credit for Holding New Clean 

Renewable Energy Bonds

New Clean Renewable Energy Bonds help tax-exempt 

entities finance capital expenditures for new facilities that 

produce electricity from renewable sources, including wind 

energy. Bond holders receive tax credits at 70% of the tax 

credit interest rate, in lieu of interest payments. New 

Clean Renewable Energy Bonds may be issued by a 

public power provider, a cooperative electric company, a 

governmental body, a clean renewable energy bond 

lender or a not-for-profit electric utility which has received 

a loan or loan guarantee under the Rural Electrification 

Act. The Department of the Treasury publicly solicited 

applications for an initial volume cap, set by Congress at 

$800 million, and awarded allocations based on criteria 

and applications received. An additional $1.6 billion in 

New Clean Renewable Energy Bond authorization was 

provided under the Recovery Act.

None

Credit for Holding Qualified Energy 

Conservation Bonds

Qualified Energy Conservation Bonds provide an 

opportunity for tax-exempt entities to issue bonds for 

which bondholders can receive an income tax credit in lieu 

of interest payments from the issuers of the bonds.

Qualified Energy Conservation Bonds can be issued to 

help finance projects that produce or conserve electricity, 

including capital expenditures incurred for rural 

development involving the production of electricity from 

renewable energy resources, as well as qualified facilities, 

including wind facilities, under Internal Revenue Code 

Section 45(d). Qualified Energy Conservation Bonds can 

be used for a broad array of purposes, including 

expenditures for certain research facilities, grants, and 

demonstration projects. Similar to the New Clean 

Renewable Energy Bonds, the tax credit rate for Qualified 

Energy Conservation Bonds is 70 percent of the tax credit 

interest rate. Congress established an initial volume cap 

of $800 million in Qualified Energy Conservation Bonds 

that could be issued. The cap was raised to $3.2 billion 

under the Recovery Act. IRS allocated the authority to 

issue the bonds to U.S. states and territories according to 

a population-based formula, and the states and territories 

further allocated the bond issuance authority for individual 

projects.

None

Credit for Residential Energy Efficient 

Property 

The Internal Revenue Code provides an income tax credit 

to homeowners of up to 30 percent of the costs of eligible 

energy efficiency equipment, which creates an incentive 

for homeowners to make such improvements. To be 

eligible for the credit, the energy efficiency equipment 

installed by the homeowner must meet certain standards; 

small wind turbines, solar electric and hot water systems, 

and geothermal heat pumps are included among the 

eligible types of equipment. Also, the equipment must be 

placed in service by December 31, 2016.

Property must be placed in service 

by December 31, 2016.
Appendix II: Federal Wind-Related Initiatives

Page 75 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Direct Payment in Lieu of a Credit for 

Holding New Clean Renewable 

Energy Bonds

Through the Hiring Incentives to Restore Employment Act 

of 2010, Congress permitted issuers of New Clean 

Renewable Energy Bonds the option to receive a direct 

payment equivalent to and in lieu of the amount of the tax 

credit that would otherwise go to the bondholder. This 

option applied to New Clean Renewable Energy Bonds 

issued after March 18, 2010. In cases where bond issuers 

elect to receive a direct payment, this option helps taxexempt entities finance projects that produce electricity 

from renewable sources, including wind energy, because 

it provides an incentive for investors to purchase the 

bonds since the investors’ returns would not depend upon 

having sufficient tax liability to utilize a tax credit.

None

Direct Payment in Lieu of a Credit for 

Holding Qualified Energy 

Conservation Bonds

Through the Hiring Incentives to Restore Employment Act 

of 2010, Congress permitted issuers of Qualified Energy 

Conservation Bonds the option to receive a direct 

payment equivalent to and in lieu of the amount of the tax 

credit that would otherwise go to the bondholder. This 

option applied to Qualified Energy Conservation Bonds 

issued after March 18, 2010. In cases where bond issuers 

elect to receive a direct payment, this option helps taxexempt entities finance projects that produce or conserve 

electricity, including electricity produced from renewable 

sources such as wind energy, because it provides an 

incentive for investors to purchase the bonds since the 

investors’ returns would not depend upon having sufficient 

tax liability to utilize a tax credit.

None

Energy Investment Credit The Internal Revenue Code provides an income tax credit 

based on a percentage of either the cost or fair market 

value in new equipment that produces electricity and/or 

heat from renewable energy sources, including wind 

energy. This credit provides an incentive for businesses to 

make such investments. Wind, solar, geothermal, and 

certain other investments qualify for a credit of 30 percent 

of the investment. Also, the credit is limited based on the 

date the equipment is placed in service, the production 

capacity of the equipment, or other factors. Facilities 

qualifying for the investment tax credit could instead claim 

a cash grant under Section 1603 of the Recovery Act for 

facilities placed in service in 2009, 2010, or 2011. For 

wind facilities placed in service after 2011, taxpayers 

could claim the investment credit or Section 1603 cash 

grant if construction of the facility began in 2009, 2010, or 

2011, and the property is placed in service before 2013.

Wind projects must begin 

construction before January 1, 

2014, in order to claim the credit.
Appendix II: Federal Wind-Related Initiatives

Page 76 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Energy Production Credit The Internal Revenue Code provides an income tax credit 

to businesses and agricultural cooperatives based on the 

amount of energy they produce at qualified facilities. The 

credit provides an incentive for electricity production from 

a variety of renewable energy sources; although, in 

calendar year 2011, it was primarily taken by wind energy 

producers. The amount of the credit varies somewhat 

depending upon the source and is adjusted annually for 

inflation. Among other limitations, a taxpayer may 

generally claim the credit only during the 10-year period 

commencing with the date the production facility is placed 

in service, and the credit phases out as the market price 

of electricity exceeds certain levels. For example, for 

calendar year 2011, the credit amount was 2.2 cents per 

kilowatt hour for certain resources (e.g., wind, geothermal, 

and certain biomass electricity production). For wind 

facilities placed in service after 2011, taxpayers could 

claim the cash grant in lieu of the production credit if 

construction of the facility began in 2009, 2010, or 2011, 

and the property is placed in service before 2013, or 

taxpayers could claim the investment credit for facilities 

placed in service in 2012.

Wind projects must begin 

construction before January 1, 

2014, to be eligible.

Qualifying Advanced Energy Project 

Credit

The Internal Revenue Code provided an income tax credit 

of up to 30 percent of the costs to establish, reequip, or 

expand U.S. domestic manufacturing facilities, which 

created an incentive to invest in advanced energy 

equipment manufacturing facilities. Qualified facilities 

included those that produce equipment designed to 

produce energy from wind, the sun, geothermal, other 

renewable resources, as well as other types of energy 

production and conservation equipment. This credit was 

established under the Recovery Act, with an initial cap of 

$2.3 billion in credit allocations. All available amounts 

were allocated in 2010 but, if some of those credits were 

forfeited, it may be possible to reallocate them through 

2013. A taxpayer claiming this credit was not allowed to 

also claim the energy investment tax credit.

The application period for the first 

round of credit certification ended 

on December 31, 2010. All 

available amounts were allocated 

in 2010. Property certified in the 

first round must be placed in 

service within 3 years of 

certification (generally in 2014). If 

some credits which were allocated 

are forfeited, it may be possible to 

reallocate them through 2013.
Appendix II: Federal Wind-Related Initiatives

Page 77 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Office of Domestic Finance

Payments for Specific Energy 

Property in Lieu of Tax Credits

Section 1603 of the Recovery Act established a cash 

grant program to provide payments to eligible applicants 

who place specified energy property in service for use in a 

trade or business. Applicants could take the payment in 

lieu of either an energy production or investment credit.

These payments provide an incentive for investment in 

property for electricity and heat production, particularly for 

applicants without sufficient tax liability to utilize a tax 

credit. Initially, the program provided cash grants for 

renewable energy projects and production placed in 

service as of December 31, 2010, or which began 

construction in 2009 or 2010. However, the program was 

extended for 1 year as part of the Tax Relief, 

Unemployment Insurance Reauthorization, and Job 

Creation Act of 2010. For projects placed in service as of 

the end of 2011, wind energy projects received the 

majority of funding, while solar energy project applicants 

submitted the largest number of funding requests.

Applications must have been 

submitted before October 1, 2012.

Source: GAO analysis of agency-provided data.

Table 10: Environmental Protection Agency (EPA) Wind-Related Initiatives

Initiative name

and implementing subagency Description Expiration information

Office of Air and Radiation

Green Power Partnership Through this initiative, EPA supports renewable energy 

development by increasing community and organizational 

demand for renewable electricity. EPA educates 

prospective partners about green power and offers expert 

advice, technical support, tools, and resources to 

encourage organizations to use green power. The 

program encourages its over 1,000 partnering 

organizations to use renewable electricity from any and all 

eligible sources, including wind.

None

Office of Research and Development

People, Prosperity, and the Planet 

Award Program

Under this initiative, EPA provides competitive grant 

funding for college student research on sustainable 

design. Selected teams are awarded $15,000 to develop 

an idea and demonstrate it at the annual National 

Sustainable Design Expo in Washington, D.C., where they 

compete for a $90,000 grant to take their design to 

market. Research proposals have included projects 

related to several renewable energy sources, including 

wind energy.

None
Appendix II: Federal Wind-Related Initiatives

Page 78 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Office of Solid Waste and Emergency Response

RE-Powering America’s Land Under this initiative, EPA encourages renewable energy 

development on current and formerly contaminated land 

and mine sites. EPA has screened over 11,000 sites to 

determine their potential for renewable energy resources, 

including wind energy, and provides this information in a 

Google Earth tool. EPA also provides technical assistance 

and information on environmental issues related to land 

contamination and liability for communities, developers, 

industry, state and local governments, and others 

interested in reusing these sites for renewable energy 

development.

None

Source: GAO analysis of agency-provided data.

Table 11: Federal Energy Regulatory Commission Wind-Related Initiatives

Initiative name

and implementing subagency Description Expiration information

Integration of Variable Energy 

Resources - Market and Regulatory 

Reforms to Remove Unduly 

Discriminatory Practices and Ensure 

Just and Reasonable Rates

This program implements market reforms that allow all 

resources, including wind energy, to compete on a level 

playing field in jurisdictional markets. These efforts include 

amendments to market rules and the implementation of 

operational tools that support the reliable integration of 

renewable resources.

None

Source: GAO analysis of agency-provided data.

Table 12: National Science Foundation (NSF) Wind-Related Initiatives

Initiative name

and implementing subagency Description Expiration information

Directorate for Engineering

Energy for Sustainability Program The program funds fundamental academic research and 

education activities through grants to enable innovative 

processes for the sustainable production of electricity and 

transportation fuels. While the program emphasizes two 

primary fuel sources—biofuels/bioenergy and photovoltaic 

solar energy—it also supports research in wind and wave 

energy, sustainable energy technology assessment, and 

fuel cells.

None
Appendix II: Federal Wind-Related Initiatives

Page 79 GAO-13-136 Wind Energy

Initiative name

and implementing subagency Description Expiration information

Energy, Power, and Adaptive 

Systems

The program provides grants for academic researchers to 

design and study intelligent and adaptive engineering 

networks with an emphasis on electric power electronics, 

networks, and grids. This focus includes generation, 

distribution, transmission and integration of renewable 

energy systems and alternative energy technologies, 

including wind, solar cells, ocean waves, and hydropower. 

The program also supports laboratory and curriculum 

development to integrate research and education.

None

Directorate for Engineering - Directorate for Mathematical and Physical Sciences

Emerging Frontiers in Research and 

Innovation

The initiative funds grants for interdisciplinary engineering 

research with the potential to create a significant impact or 

meet national needs. Under the program, NSF has 

coordinated with DOE to call for proposals that help 

address the need for wind and solar energy storage. 

None

Source: GAO analysis of agency-provided data.

Table 13: Small Business Administration (SBA) Wind-Related Initiatives

Initiative name

and implementing subagency Description Expiration information

Office of Capital Access

Certified Development Company / 

Section 504 Loans

These loan guarantees supplement SBA loans to 

businesses investing in energy efficient equipment, 

renewable energy sources—such as wind energy—or 

equipment, or green buildings. SBA allows green building 

and energy efficient activities to qualify as broader public 

policy goals, allowing for larger loans and lower job 

creation goals for eligible companies.

None

Office of Investment

Energy Saving Debenture This initiative provides a financing tool for Small Business 

Investment Companies licensed after 2008 to invest in 

small businesses with products or services that are 

directed toward energy saving activities, including 

renewable energy. Energy Saving Debentures provide a 

financing option for Small Business Investment 

Companies to make energy saving qualified investments 

in these small businesses.

None

Source: GAO analysis of agency-provided data.
Appendix III: Estimated Revenue Losses for 

Treasury’s Wind-Related Tax Expenditures

Page 80 GAO-13-136 Wind Energy

Table 14 below reflects the fiscal year 2011 revenue loss estimates for 

Treasury’s wind-related tax expenditures—both their total estimated 

revenue losses and their estimated revenue losses for activities 

specifically related to wind.1

Table 14: Estimated Revenue Losses for Treasury’s Wind-Related Tax Expenditures in Fiscal Year 2011

Initiative name

Estimated revenue 

losses

Estimated revenue losses for

activities specifically related to winda

Accelerated Depreciation Recovery Periods for Specific 

Energy Property

Up to $350 millionb Estimates are not available

Credit for Holding New Clean Renewable Energy Bonds $70 million Estimates are not available

Credit for Holding Qualified Energy Conservation Bonds $10 million Estimates are not available

Credit for Residential Energy Efficient Property $840 million Estimates are not available

Direct Payment in Lieu of a Credit for Holding New Clean 

Renewable Energy Bonds

$20 million Estimates are not available

Direct Payment in Lieu of a Credit for Holding Qualified 

Energy Conservation Bonds

$30 million Estimates are not available

Energy Investment Credit (ITC)c $700 million Less than $50 million for small wind 

properties—properties using wind turbines of 

100 kilowatts or lessb

Energy Production Credit (PTC)d $1,560 million $1,100 millionb

Qualifying Advanced Energy Project Credit $430 million Estimates are not available

Sources: GAO analysis of Office of Management and Budget and Joint Committee on Taxation documentation.

Note: Revenue losses and outlay effects reflect Treasury estimates from the President’s Fiscal Year 

2013 budget unless otherwise specified. Revenue loss estimates do not incorporate any behavioral 

responses and thus do not reflect the exact amount of revenue that would be gained if a specific tax 

expenditure were repealed. In addition, while sufficiently reliable as a gauge of general magnitude, 

summing individual tax expenditures’ revenue loss estimates does not take into account interactions 

between individual provisions. 

a

The Office of Management and Budget—which uses revenue loss estimates developed by 

Treasury—does not publish energy source-specific revenue loss estimates.

b

The revenue loss estimate is reported by the Joint Committee on Taxation only.

c

Firms can take a cash grant under Treasury’s Payments for Specific Energy Property in Lieu of Tax 

Credits initiative (Section 1603 program) instead of the ITC for facilities placed in service in 2009, 

2010, and 2011, or if their construction began in 2009, 2010, or 2011.

d

Firms can take a cash grant under Treasury’s Section 1603 program instead of the PTC for facilities 

placed in service in 2009, 2010, or 2011, or if their construction began in 2009, 2010, or 2011.

 

1

The majority of wind-related initiatives, including all tax expenditures listed here, 

supported a range of energy sources in addition to wind.

Appendix III: Estimated Revenue Losses for 

Treasury’s Wind-Related Tax Expenditures 
Appendix IV: GAO’s Questionnaire for Federal 

Agencies with Wind-Related Initiatives

Page 81 GAO-13-136 Wind Energy

Appendix IV: GAO’s Questionnaire for 

Federal Agencies with Wind-Related 

Initiatives
Appendix IV: GAO’s Questionnaire for Federal 

Agencies with Wind-Related Initiatives

Page 82 GAO-13-136 Wind Energy
Appendix IV: GAO’s Questionnaire for Federal 

Agencies with Wind-Related Initiatives

Page 83 GAO-13-136 Wind Energy
Appendix IV: GAO’s Questionnaire for Federal 

Agencies with Wind-Related Initiatives

Page 84 GAO-13-136 Wind Energy
Appendix IV: GAO’s Questionnaire for Federal 

Agencies with Wind-Related Initiatives

Page 85 GAO-13-136 Wind Energy
Appendix IV: GAO’s Questionnaire for Federal 

Agencies with Wind-Related Initiatives

Page 86 GAO-13-136 Wind Energy
Appendix IV: GAO’s Questionnaire for Federal 

Agencies with Wind-Related Initiatives

Page 87 GAO-13-136 Wind Energy
Appendix IV: GAO’s Questionnaire for Federal 

Agencies with Wind-Related Initiatives

Page 88 GAO-13-136 Wind Energy
Appendix IV: GAO’s Questionnaire for Federal 

Agencies with Wind-Related Initiatives

Page 89 GAO-13-136 Wind Energy
Appendix IV: GAO’s Questionnaire for Federal 

Agencies with Wind-Related Initiatives

Page 90 GAO-13-136 Wind Energy
Appendix IV: GAO’s Questionnaire for Federal 

Agencies with Wind-Related Initiatives

Page 91 GAO-13-136 Wind Energy
Appendix V: Comments from the Department 

of Energy

Page 92 GAO-13-136 Wind Energy

Appendix V: Comments from the Department 

of Energy
Appendix V: Comments from the Department 

of Energy

Page 93 GAO-13-136 Wind Energy
Appendix VI: GAO Contact and Staff 

Acknowledgments

Page 94 GAO-13-136 Wind Energy

Frank Rusco (202) 512-3841 or ruscof@gao.gov

In addition to the individual named above, Dan Haas, Assistant Director; 

Krista Anderson; Keya Chateauneuf; Cindy Gilbert; Miles Ingram; Cynthia 

Norris; Jerome Sandau; MaryLynn Sergent; Maria Stattel; Anne Stevens; 

Barbara Timmerman; and Jack Wang made key contributions to this 

report.

Appendix VI: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(361379)
The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO’s website (http://www.gao.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

and correspondence. To have GAO e-mail you a list of newly posted 

products, go to http://www.gao.gov and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts. 

Visit GAO on the web at www.gao.gov. 

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations 

Public Affairs

Please Print on Recycled Paper.