Press Releases

Press Releases
Mar. 25, 2021

Wind Energy Pays $65 Million in Sales & Use Taxes

Contractor’s Excise Taxes add $16 Million

Pierre, S.D., (March 25, 2021) – According to the most recent American Clean Power report, South Dakota has 2,305 megawatts of installed wind capacity and is among the top 10 states in the country with the most under construction and advance wind development activity in 2020. A total of 774 megawatts of wind capacity were installed in South Dakota in 2020. In addition, there are 773 megawatts of wind under construction, and another 328 megawatts in advanced stages of development.  

South Dakota’s rich natural resources, friendly business environment and the completion of recent transmission projects are helping drive renewable energy development. In turn, that development is contributing to a significant increase in the amount of revenue flowing to state coffers. According to the recent South Dakota Bureau of Finance and Management report, the significant growth of wind energy development in the state has contributed $65 million in Sales and Use taxes in 2020, a 103 percent increase from 2019. Revenue from contractor’s excise taxes was $16 million in 2020, an increase of 60 percent over 2019.

“The renewable energy boom we’ve seen in South Dakota is not only related to the excellent wind resource, it’s also the result of the transmission line project in Brookings County, which was completed by CapX2020 in 2017,” said Clean Grid Alliance Regional Policy Manager, Peder Mewis. “However, transmission capacity is already filled. Going forward, new transmission infrastructure will be needed to accommodate more renewable energy development.

The cost of wind energy has fallen 70 percent in the last decade, and the cost of utility-scale solar has fallen 90 percent since 2009. As a result, more utilities and corporate purchasers are adding renewable energy to their portfolios to help keep the cost of energy low for consumers. At the same time, the growing demand for low-cost renewable energy is providing opportunities for rural communities to benefit from the jobs and economic benefits that come from such projects.

“Since small, rural communities are not likely to attract large employers, renewable energy projects are a great fit for communities looking to give their local economies a boost,” said Mewis. “They offer good-paying local jobs that attract or retain young families. The land-lease payments really help landowners diversify their income stream and can even help keep the farm in the family. And, now we’re seeing how much the state as a whole benefits from these projects.”

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Clean Grid Alliance (CGA) is a 501(c)(3) nonprofit organization based in St. Paul, Minn., whose mission is to advance renewable energy in the Midwest. Launched in 2001, CGA has been an active stakeholder in the MISO process at the state and regional levels. CGA’s membership includes industry representatives working in wind, solar and storage as well as environmental nonprofit organizations, public interest groups, clean energy advocates, farm groups, and businesses providing goods and services to the renewable energy industry who come together to reduce carbon and deliver a renewable energy future. Learn more at cleangridalliance.org.