Wind is ready, which explains President Obama’s touting of it in two widely heralded public appearances recently, as well as the hundreds of millions of dollars of high-profile investments Google has made in it over the last year.

Last year, at seven cents per kilowatt-hour, wind energy-generated electricity was considered competitive. This year, with six and even five-and-one-half cent bids commonplace and guaranteed for the term of twenty-year power purchase agreements (PPAs), wind is an electricity market leader.

Wind power has supplied an average of 35 percent of new U.S. power capacity for the last five years. Only natural gas, which is currently very cheap but has a history (and likely future) of price volatility, has done better.

And the wind power-natural gas competition is good for both industries. The more wind capacity there is, the more appealing natural gas is as a ramping alternative. The more natural gas there is, the more wind is appealing as a constant-priced hedge.

Buying into a wind farm never looked so good -- except for the complexities in getting the financing right. At a webinar sponsored by industry technical journal Windpower Engineering, three veterans of wind project finance addressed those complexities.

Graham Noyes, an attorney with wind energy industry law firm Stoel Rives LLP, noted, to no one’s surprise, that the most popular current incentive is not the production tax credit (PTC) that buoyed the industry through its 2005-to-2008 boom years, but rather, the investment tax credit (ITC) that, with the emergency financial crisis legislation of 2008, became convertible to cash under what is popularly known as the Section 1603 cash grant.

But it and the Recovery Act-funded federal loan guarantee program and bonus depreciation opportunities all appear to be vulnerable in the current political climate, threatening the wind industry’s health.

“Development policies have come and gone” in the U.S. before, Noyes said, but now the U.S. industry is competing with countries “that have longer-term visions and political systems with less change.”

While “there’s fairly good support for keeping programs in place that are there now,” Noyes said, “everybody knows that to the extent that a program has a sunset date on it, now is not a good time to have a high level of confidence that it’s necessarily going to get extended.”

A new source of financing is the New Market Tax Credit (NMTC). “We see this as a new hot area,” Noyes said, “previously used in commercial real estate development and manufacturing.” It has some sophisticated requirements, “but you do have the ability for a qualifying project to get a 39 percent tax credit spread over a seven-year period.” It is, he said, “currently at $3.5 billion of funding.”

The other buoy to development, Noyes added, are state renewable portfolio standards (RPSs).

Matt Mooney, Director of Business Development at Potro Power, mentioned the crucial role of accessible transmission to the success of a project. As Noyes said before him, the curtailment of projects because of inadequate transmission is costing some developers the crucial margins they need to make their projects profitable.

“To the extent you’ve got grid limitations,” Noyes explained, “there’s a desire to shift that risk.” Even with state RPSs driving development, that inhibits the completion of PPAs and may force developers to write in curtailment risk allocation losses.

“Be creative in advance,” Mooney suggested. Choose development sites with adequate transmission. And take advantage of the incentives recommended by Noyes.

Blair T. Loftis, a Vice President with environmental engineering consultant Kleinfelder, impressively presented the complexities of working through the permitting process. “What we do is everything ancillary to financing and construction,” Loftis explained, and proceeded to display forms and timelines that make IRS procedures look like a preschool recess game.

“Permitting will drive the schedule,” Loftis promised. So lost in the weeds he didn’t even realize he was throwing around jargon, Loftis began with “the big ones are going to be NEPA and state programs” and later cautioned against confusing “NEPA and CEQA” regulations.

National Environmental Policy Act (NEPA) and California Environmental Policy Act (CEQA) compliance requirements  set the standards for rigor and complexity in the field.

“The Army Corps of Engineers is typically a stumbling block,” Loftis added, “and then there’s the local requirements.”

Under some circumstances, the same project evaluated by NEPA and CEQA, Loftis suggested, can seem as different as a porpoise and a cow.

Loftis’ most impressive anecdote was his observation that if a development team isn’t very careful in planning the delivery of its applications and documentation, it can cause a full year's delay because of state and local regulators’ methodical and unwavering calendars, putting a serious crimp in financing.

The best solution, Loftis said, is to make sure it “isn’t the first rodeo” for the people hired to do the work.

His five “simple truths of project financing” are: (1) Financial due diligence is inevitable; (2) Investors are averse to risk; (3) Uncertainty is the second cousin of risk; (4) If it isn’t documented, it doesn’t exist; and (5) Poorly documented disclosures will delay financial close.

The takeaway: Though wind is ready, the nation’s political processes, transmission system and regulatory procedures may not be.