Iowa Farmer Earns $30k Yearly from Wind Turbines, Calls it His 401(k)

Wind Energy: An Economic Lifeline for Iowa Farmers

Iowa, a state known for its abundance of farms, is also home to a significant number of wind turbines. In 2023, 59% of the state’s energy came from wind power, the largest share in the United States. Wind energy for many of the state’s farmers is less about politics or the environment, and more about an additional, reliable source of income.

Farmers and Wind Turbines: A Perfect Match

One such farmer is Dave Johnson, who leases part of his land in Northern Iowa to a utility company that has installed four wind turbines on his property. These turbines generate approximately $30,000 annually. Johnson, who breeds cattle and pigs, saw an opportunity for his farm to become more profitable. He told Vox, “I never had a 401(k). I farmed and stuck everything back into the farm. This is the 401(k) that I never had.” Johnson, a voted Trump supporter, considers the turbines primarily an economic decision providing a consistent income stream, especially during tough farming periods.

Johnson’s sentiment is shared by other farmers in the region, such as Fred Koschmeder, a corn and soybean farmer who also has wind turbines on his land. He told reporters that he never considered wind energy as a political issue and praised it for its economic benefits. He said, “It is economic development. If you’ve got a chance to participate in something that brings value, I think you’re kind of foolish not to do it. It adds a lot of value to your farm and extra income, too.”

Why Iowa Embraced Wind Energy

Several factors contributed to Iowa becoming a wind-energy powerhouse. Firstly, the state is blessed with strong winds. Secondly, and perhaps more importantly, Iowa is geographically closer to large urban centers such as Chicago, which require substantial amounts of electricity. Furthermore, Iowa was the first US state to establish a renewable portfolio standard in 1983, requiring utilities to contract or own at least 105 megawatts of renewable energy, a target it achieved by 1999. Additional state and federal tax incentives helped accelerate the expansion of wind energy.

Republicans have supported this growth, notably Senator Chuck Grassley, who helped establish a federal tax credit for building wind farms in the 1990s, leading to his nickname as the “father” of Iowa wind energy. The steady revenue provided by wind turbines, often amounting to thousands of dollars each year, offered farmers a new source of income, especially crucial when crop prices and yields fluctuate.

Wind Energy Alleviating Farming Difficulties

Farming in Iowa has grown increasingly difficult in recent years due to falling crop prices and rising expenses. Wind energy offers an additional income source that factors into the overall economic health of the state. According to Steve Guyer, senior energy policy counsel at the Iowa Environmental Council, wind power benefits the entire state through energy costs. He says, “All customers benefit from it. Although other costs may rise over time, the cost of the wind actually remains stable or lowers. When we factor that into the overall utility bill, it at least stabilizes the bill.”

Besides, the wind industry in Iowa employs approximately 4,000 individuals and brings in billions of dollars in capital investment. Mak Heddens, who heads the clean-energy coalition Power Up Iowa, highlighted that wind is the top taxpayer in a third of Iowa’s counties.

Politics and Wind Energy

Despite Iowa’s political inclination towards Republicans and their support for Donald Trump — who has long expressed his opposition to wind energy — the economic benefits of this renewable source have kept it popular in the state. Some farmers like Johnson, choose to dismiss Trump’s negative comments about wind power and believe that wind energy continues to have Republican backing.

The Future of Wind Energy in Iowa

Despite the success of wind energy in Iowa, the industry faces uncertainty due to changing federal policies. In January of the previous year, Trump signed an executive order pausing the approval of new and renewed federal leases for onshore and offshore wind projects. Potential tariffs on countries such as China could drive up the cost of wind turbines, as they often contain parts manufactured abroad. There’s also potential worry about a possible reduction in federal tax incentives for clean energy as part of the Inflation Reduction Act. Economist Ernie Goss from Creighton University questioned, “I think the subsidies are the biggest issue. If they are reduced, will wind energy survive?”