Wind power has emerged as the most dominant source of clean energy during the two first decades of the 21st century. As wind turbines became popular, complaints about annoyances from neighboring settlements has led to establishment of greater setback distances in some jurisdictions, due to noise, shadow flickers, and aesthetic considerations. The current study seeks to establish an objective basis for determining optimal setback distance from human settlements. It begins by characterizing the tradeoff between turbines' environmental externalities and energy potential across northern region of Israel, where proposed wind farms are now being considered. The analysis relies on GIS software, which allows for quantification of the energy potential along with impacts of noise and shadow flickers. Based on the geographical data, we compare six contrasting regulatory approaches to setback distance for limiting wind turbines, evaluating how they would be applied in Israel's northern region. The results reveal that at setback of 700–800 m, annoyance levels depend on site-specific conditions, which in some sites are marginal. Zoning restrictions of 1,000–1,200 m pose only negligible externalities to nearby settlements. Greater distancing decreases the number of potential turbine sites dramatically without significant reducing anticipated annoyance levels and can unnecessarily compromise natural areas.