Wind Project Financing Structures: A Review & Comparative Analysis

This report surveys the seven principal financing structures through which most new utility-scale wind projects in the United States have been financed from 1999 to the present, excluding projects owned by investor-owned and publicly-owned utilities where the project becomes part of the utilities' internal generating portfolio and rate base. The report defines utility-scale wind projects as those designed to sell electricity directly to utilities or into power markets on a wholesale basis. The report does not cover financing structures used for smaller community-based wind power projects, though it may have some indirect utility for parties considering such projects, as several financing options used for smaller projects are derived from structures first conceived for larger projects. Finally, this report is relevant only to the U.S. market, since the presence and structure of the Tax Benefits have driven the development of financing structures in ways not applicable for other national markets. The report has three primary objectives:

1. to survey recent trends in the financing of utility-scale wind projects in the United States,
2. to describe the seven principal financing structures through which most utility-scale wind projects have been financed from 1999 to the present, and
3. to explain each structure's relative impact on the levelized cost of wind energy.

The year 1999 is used as a starting point because it marks the recent upsurge in wind power growth in the United States.