This memorandum discusses the renewable portfolio standard that previously existed in Kansas, wind energy generation, property tax exemptions, production tax credits, Inflation Adjustment Act, and community wind and solar projects.
Renewable Portfolio Standard
The 2015 Legislature enacted House Sub. for SB 91, which created a voluntary renewable energy goal, known as a renewable portfolio standard or RPS, and reduced the lifetime property tax exemption for new renewable resources to ten years after December 31, 2016.
The bill established a voluntary goal that 20 percent of a utility’s peak demand within the state be generated from renewable energy resources by the year 2020. This voluntary goal became effective on January 1, 2016, as did the repeal of the current renewable energy portfolio standard and the corresponding rule and regulation authority enacted by the 2009 Legislature. Kansas’ RPS was in effect through December 31, 2015, and required utilities to obtain net renewable generation capacity constituting at least the following portions of each affected utility’s peak demand based on the average of the three prior years:
- 10 percent for calendar years 2011 through 2015;
- 15 percent for calendar years 2016 through 2019; and
- 20 percent for each calendar year beginning in 2020.
Renewable energy may be generated by wind, solar thermal sources, photovoltaic cells and panels, dedicated crops grown for energy production, cellulosic agricultural residues, plant residues, methane from landfills or from wastewater treatment, clean and untreated wood products such as pallets, hydropower, fuel cells using hydrogen produced by one of the other renewable energy resources, and energy storage connected to renewable generation by means of energy storage equipment.
As of October 2023, according to the Berkeley Lab and DSIRE, 29 states, the District of Columbia, and 3 territories adopted RPS, while another 7 states adopted non-binding renewable portfolio goals. While the specific guidelines of each state’s legislation vary, the most common forms of renewable energy cited in RPS legislation are wind, solar, geothermal, biomass, and hydropower.
More information about individual states can be found at http://www.dsireusa.org, the website for the Database of State Incentives for Renewables & Efficiency and http://www.eia.gov, for the U.S. Energy Information Administration.
Wind-generated Electricity
Nearly all of Kansasʼ renewable generation of electricity comes from wind power. Kansas ranks second in the nation for wind energy potential, but fourth in power capacity installations. In 2022, wind energy accounted for 47 percent of Kansas’ electricity net generation, which was the third-highest share of wind power for any state after Iowa and South Dakota.
At the beginning of 2023, Kansas had nearly 8,250 megawatts of installed wind generating capacity. An additional 814 megawatts of wind power capacity is scheduled to come online in 2023, including the state’s largest wind farm, the High Banks Wind Project in Washington and Republic Counties, with 604 megawatts, at the end of the year.1
Kansas Property Tax Exemption
After December 31, 2016, exemptions granted for property primarily used for wholesale sale of renewable energy resources for which applications were filed after December 31, 2016, will be limited to ten years.
Production Tax Credit and the Inflation Reduction Act
Production tax credit (PTC) is a federal, per kilowatt-hour (kWh) tax credit for electricity generated by certain energy sources2. Generally, facilities are eligible for the PTC for ten years after being placed into service. The PTC ranges from 1.3 cents to 2.6 cents per kWh, depending upon the type of renewable energy source. The amount of the credit was established at 1.5 cents per kWh in 1993 dollars (indexed for inflation) for some technologies and half of that amount for others. The first PTC was created by the Energy Policy Act of 1992, and the PTC has been allowed to expire for short periods of time since 1992.
To qualify for the credit, the renewable energy produced must be sold by the taxpayer to an unrelated person during the taxable year. While the credit is the primary financial policy for the wind industry, other renewable energies also qualify. Eligible renewable sources include landfill gas, wind energy, biomass, hydroelectric energy, geothermal electric energy, municipal solid waste, hydrokinetic power, anaerobic digestion, small hydroelectric energy, tidal energy, wave energy, and ocean thermal energy.
On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law, establishing new wage and apprenticeship requirements for systems more than 1 megawatt (MW) in size. Projects less than 1 MW in size are eligible if construction begins after December 31, 2021, and is completed before January 1, 2025. According to the U.S. Environmental Protection Agency (EPA), the tax credit for these projects starts at a base of 0.5 cents per kWh but may qualify for full credit if the labor-related requirements are met. Additionally, the IRA provides two extra credits for projects of any size, one related to use of domestic steel/iron materials and the other dependent on project location within an “energy community.”
Community Solar
Midwest Energy and Clean Energy Collective broke ground on a 3,960-panel, 1 MW community solar array on August 25, 2014, in a pasture north of Colby, Kansas. Construction began in September 2014, and the array began producing energy on February 1, 2015. The array was the first and largest solar community in Kansas, selling out to 134 individual Midwest Energy customers in March 2016. Array owners receive monthly credits on their residential, commercial, oil, irrigation, and agricultural accounts. Midwest Energy stated the array should result in a roughly 30 percent efficiency gain over traditional roof-mounted panels.
Additionally, the Kansas City Board of Public Utilities (KCBPU) has a Community Solar program which allows every KCBPU residential and commercial customer to harness the power and savings of solar energy for themselves. Currently, the KCBPU Solar Farm includes 3,780 photovoltaic panels capable of producing 1,000 kW of power. This solar farm is the first municipal utility solar farm in the state of Kansas.
Community Wind
Kansas electric cooperatives have built a collective total of 16 1 MW wind farms around the state in recent years.
- U.S. Energy Information Administration – Kansas ↩︎
- Geothermal Electric, Solar Thermal Electric, Solar Photovaltaics (PV), Wind, Hydroelectric, Municipal Solid Waste, Landfill Gas, Tidal, Wave, Ocean Thermal, and Biomass. ↩︎
by Kate Smeltzer
Research Analyst
785-296-4407