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Tax cuts for a wind farm expansion
Published on 15 May 2020
Italy
This is the good practice's implementation level. It can be national, regional or local.
About this good practice
The Tula Municipality (Sardegna Region, Italy) hosts the biggest wind farm owned by ENEL Greenpower, located on a hillside 700m above sea-level. The farm, called Sa Turrina Manna, began construction in 2003 and finished in 2009.
When an extension of the wind farm was announced, citizens and the community called for a more equal distribution of financial benefits of the farm. Through a participatory and constructive approach, the developer, the local authority, Legambiente (a National Environmental NGO) and the local community came together and successfully overcame the barriers at hand. These namely came through contributions by the developer to the municipal budget (2% of the gross income achieved each year would be given to the municipality, accounting for approx. 12% of the local municipalities budget), as well as listening to and acting upon the environmental and landscape concerns of the local population. The allocation of the budget was done in a highly participatory way and the increased revenue meant that local residents had to pay lower proportions of local council tax.
When an extension of the wind farm was announced, citizens and the community called for a more equal distribution of financial benefits of the farm. Through a participatory and constructive approach, the developer, the local authority, Legambiente (a National Environmental NGO) and the local community came together and successfully overcame the barriers at hand. These namely came through contributions by the developer to the municipal budget (2% of the gross income achieved each year would be given to the municipality, accounting for approx. 12% of the local municipalities budget), as well as listening to and acting upon the environmental and landscape concerns of the local population. The allocation of the budget was done in a highly participatory way and the increased revenue meant that local residents had to pay lower proportions of local council tax.
Expert opinion
Wind farms can often face resistance from local communities, with fears raised about impacts on health and the environment, as well as degradation of views. Further resistance can also come from a feeling of being imposed upon – that large companies benefit whilst the local community manages the perceived downsides. This is an interesting practice for building community support, with financial benefit for the community, resulting in lower taxes for citizens. Participatory approaches should be encouraged in all projects, engaging with community concerns, but this financial model is promising, resulting in a clear benefit for the community. It could be transferred to other regions in co-operation with wind farm owners and operators and can be considered when new farms are established or existing farms expanded.
Works at
Interreg Europe Policy Learning Platform
Resources needed
Minimal resources (i.e., staff to manage the engagement and negotiation process) in respect to the considered investment costs and revenues per year
Evidence of success
2% of annual gross revenue per kWh produced and fed to the network is given to the municipality, which resulted in a contribution of 400,000 EUR per year.
This resulted in a tax reduction for 1600 households (no rise in the garbage tax paid for many years; municipal part of the Personal Income Tax (IRPEF) eliminated; municipal real estate tax (IMU) eliminated for main dwellings) and more than 20 types of local social interventions.
This resulted in a tax reduction for 1600 households (no rise in the garbage tax paid for many years; municipal part of the Personal Income Tax (IRPEF) eliminated; municipal real estate tax (IMU) eliminated for main dwellings) and more than 20 types of local social interventions.
Potential for learning or transfer
It is certainly financially feasible for other wind energy developers to also allocate a small share of the income to the local municipality which their installations affect.
This is one of the good practices identified by the H2020 WinWind project.
This is one of the good practices identified by the H2020 WinWind project.
Further information
Website
Good practice owner
You can contact the good practice owner below for more detailed information.
Organisation
Tula Municipality
Italy
Sardegna
Contact
Managing director