DOE study finds wind farms have no economic impact on neighbors

Source: Daniel Cusick, E&E reporter • Posted: Thursday, September 5, 2013

A new study from the Lawrence Berkeley National Laboratory finds that wind farms have no measurable effect on real estate prices in communities where turbines are built within 10 miles of homes.

But the analysis, prepared for the Energy Department’s Office of Renewable Energy and Energy Efficiency, is unlikely to quell ongoing debate over wind farms’ effects on property values, especially at the local level.

The latest LBNL research, which builds on a 2009 study, evaluates more than 50,000 home sales near 67 wind farms in nine states. All of the sales were within 10 miles of a wind farm, according to the study, and nearly 1,200 sales were within 1 mile of a turbine, according to the report’s authors.

In part due to the rapid expansion of wind energy over the last decade, the United States now hosts an estimated 45,000 turbines spread across hundreds of counties, and current projections show that developers will add an estimated 2,750 turbines annually over the coming years.

The industry’s robust growth has had a profound effect on the view in some communities where turbines are often the tallest structures on the land and can be seen over long distances, particularly in the Midwest and Great Plains.

In some areas, wind power developers have met resistance to new projects on grounds that the turbines are unsightly, that their spinning blades are excessively noisy or that industrial-scale wind farms drive down local property values. Organized critics of the wind industry have capitalized on such claims, charging that the presence of wind turbines has depressed local property values in some communities by as much as 25 percent.

No decline in real estate values

But LBNL scientists, working with independent experts in Missouri, Texas and California, concluded that such claims do not withstand rigorous statistical analysis and that notions of declining real estate values in regions with high concentrations of wind turbines are based more on perception than reality.

“This is the second of two major studies we have conducted on this topic, and in both studies [using two different data sets] we find no statistical evidence that operating wind turbines have had any measureable impact on home sales prices,” Ben Hoen, the report’s lead author, said in a statement announcing the findings.

Hoen, a researcher in LBNL’s Environmental Energy Technologies Division, said the study’s findings on wind turbines are consistent with other research examining other negative amenities — also called “disamenities” — such as high-voltage transmission lines, landfills and noisy roads. The study also accounted for shifts in real estate markets before, during and after the wind energy projects were constructed.

“Although there have been claims of significant property value impacts near operating wind turbines that regularly surface in the press or in local communities, strong evidence to support those claims has failed to materialize in all of the major U.S. studies conducted thus far,” he said.

“That doesn’t mean an individual single home won’t be impacted,” Hoen added in a telephone interview. “But where such effects do occur, they tend to be small and sporadic.”

Critic remains critical

But some critics take issue with LBNL’s study, which relies on what’s known as a “spatial hedonic analysis,” a type of regression analysis that is common in real estate economics.

Lisa Linowes, executive director of the Industrial Wind Action Group, which has been critical of the wind industry’s growth and government policies promoting wind energy, noted that the study relies on what she described as an “oversized and overly generalized” data set that downplays key factors, such as the length of time a property was on the market, price reductions over the selling period, or the rate of home foreclosures in areas close to turbines versus homes at a greater distance.

More importantly, she said, the study relies heavily on information about home sales that occurred 3 to 10 miles from a wind turbine, while less than 1 percent of the home sales studied occurred within a half-mile of a turbine.

“There’s simply no way that they can draw this conclusion about home prices when they have a data set that is so dominated with houses that have few or no effects from wind farms,” she said.

Hoen, however, vigorously defended the analysis, saying critics like Linowes are misrepresenting or misinterpreting LBNL’s methodology and conclusions. “[Linowes] has brought up an issue that is fully explained in the document and is a bit of a red herring,” he said.

In fact, Hoen said, the analysis does factor for the high degree of variability in real estate markets, including differences in home size, condition, proximity to wind turbines and other property-specific conditions. “Our approach is well within the canon on these types of economic questions,” he added.

Trying to be a benefit

John Anderson, director of siting policy for the American Wind Energy Association, noted that wind energy development is subject to the same challenges as other large infrastructure projects, and that local concerns about property values and other impacts are within the normal scope of project planning.

But, he said, the LBNL report helps to counter claims that wind farms are economic yokes on local real estate markets. “What we see this study demonstrating is that … there is no negative impact on property values from a statistical standpoint at any stage of the project siting, development or operation,” Anderson said.

As for critics who argue that the industry has failed to adequately address local concerns about wind farms’ negative effects on property values, Anderson said AWEA encourages developers to act as partners in local communities and to negotiate in good faith with property owners, including adhering to setbacks and other planning and zoning regulations.

“We know it’s impossible to make 100 percent of the people satisfied 100 percent of the time,” he said. “But we believe we have an excellent product for the consumer as well as the host communities that see wind power as providing a real economic and community benefit.”