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Pennsylvania has introduced uniform local taxation of all wind farms in the state, resolving an issue of financial uncertainty for wind farm developers. Under a state law passed in December, taxation of wind plant is now based solely on land value and associated lease or royalty payments to landowners. Before the legislation was passed, counties and municipalities across the state took varying approaches, with some taxing the equipment.

The confusion caused trouble. Last year, FPL Energy, which owns and operates 129 MW in the state from five projects, was involved in litigation in Wayne County, home to its 64.5 MW Waymart project. Traditionally, power plant equipment is exempt from state taxes, but all building and structures are taxable as real estate property. Since wind projects have no buildings or structures, Wayne County had sought to tax the wind equipment instead.

FPL settled its 2004 and 2005 tax bill with Wayne County at just over $4,400 per turbine, says the company's Steve Stengel. By contrast, similar FPL turbines at a separate wind plant in Somerset County were taxed at $1,286 each, based on the usual Pennsylvania assessment that is now codified into state law. The FPL litigation in Wayne County was recently settled in the wake of the new law.

"Pennsylvania wisely defended the renewable energy industry. The intention of the state government is to have the same law for everybody, level the playing field, and stamp out all questions one might have about how this valuation should take place," says Michael Peck of Gamesa, whose US wind power operations are based in Pennsylvania. According to Tom Tuffey of environmental lobby group Pennfuture, a typical local community will earn about $100,000 a year in tax revenue from a 25 MW wind farm, though, depending on the rate applied that figure, could vary from $50,000 to $150,000.