The U.S. wind industry experienced unprecedented growth in 2007, surpassing even optimistic projections from years past. This rapid pace of development has made it difficult to keep up with trends in the marketplace. Yet, the need for timely, objective information on the industry and its progress has never been greater. This report—the second of an ongoing annual series—attempts to meet this need by providing a detailed overview of developments and trends in the U.S. wind power market, with a particular focus on 2007. As with the previous edition, this report begins with an overview of key wind power development and installation-related trends, including trends in capacity growth, in turbine make and model, and among wind power developers, project owners, and power purchasers. It then reviews the price of wind power in the United States, and how those prices compare to the cost of fossil fueled generation, as represented by wholesale power prices. Next, the report describes trends in installed wind project costs, wind turbine transaction prices, project performance, and operations and maintenance expenses. Finally, the report examines other factors impacting the domestic wind power market, including grid integration costs, transmission issues, and policy drivers. The report concludes with a brief preview of possible developments in 2008. This version of the Annual Report updates data presented in the previous edition, while highlighting key trends and important new developments from 2007. New to this edition is a section on the contribution of wind power to new capacity additions in the electric sector, data on the amount of wind in utility systems, a summary of trends in wind project size, a discussion of the quantity of wind power capacity in various interconnection queues in the United States, and a section that underscores domestic wind turbine manufacturing investments. A note on scope: this report concentrates on larger-scale wind applications, defined here as individual turbines or projects that exceed 50 kW in size. The U.S. wind power sector is multifaceted, however, and also includes smaller, customer-sited wind applications used to power the needs of residences, farms, and businesses. Data on these applications are not the focus of this report, though a brief discussion on Distributed Wind Power is provided on page 4. Much of the data included in this report were compiled by Berkeley Lab, and come from a variety of sources, including the American Wind Energy Association (AWEA), the Energy Information Administration (EIA), and the Federal Energy Regulatory Commission (FERC). The Appendix provides a summary of the many data sources used in the report. Data on 2007 wind capacity additions in the United States are based on preliminary information provided by AWEA; some minor adjustments to those data are expected. In other cases, the data shown here represent only a sample of actual wind projects installed in the United States; furthermore, the data vary in quality. As such, emphasis should be placed on overall trends, rather than on individual data points. Finally, each section of this document focuses on historical market information, with an emphasis on 2007; the report does not seek to forecast future trends.