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Small
Wind Factsheets
The
Economics of Small Wind
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Although
small wind systems involve a significant initial investment, they
can be competitive with conventional energy sources when you account
for a lifetime of reduced or altogether avoided utility costs, especially
considering escalating fuel costs.
The cost of buying and installing a small wind energy system
typically ranges from about $3,000-5,000 per kilowatt for a grid-connected
installation, less than half the cost of a similar solar electric
system. The length of the payback period (or, the time it takes
to "break even") depends on the system you choose, the
wind resource at your site, your power provider’s electricity
rates, and financing and incentives available. Small wind owners
with strong average wind speeds who can take advantage of rebate
programs can usually recoup their investments within fifteen years.
Many states have rebate or tax credit programs in place to encourage
small wind and other renewable energy applications. AWEA's state-by-state1
pages provide information specific to buying and installing a
small wind turbine in each of several U.S. states, including the
availability of net metering2, local or
state incentive programs, and utility incentives.
The cost of a wind system has two components: initial installation
costs and operating expenses. Installation costs include the purchase
price of the complete system (including tower, wiring, utility
interconnection or battery storage equipment, power conditioning
unit, etc.) plus delivery and permitting costs, installation charges,
professional fees and taxes.
A Good Investment
for Windy Landowners with High Bills
A 10-kW grid-connected residential-scale system
generally costs $35-40,000 to install. The best candidates for
these systems are rural homes and businesses with at least an
acre of property, a Class 2 or better wind resource3, and utility
bills averaging $150 per month or more. If a net metering arrangement4
is available from the utility, most of the power generated by
a grid-connected system can be valued at the retail rate of electricity,
reducing the amount of time it takes for a system to pay for itself.
In California, where net metering and the nation’s highest
electric rates are combined with a substantial rebate program
and a state tax credit, small wind system owners with strong wind
resources can recoup their initial investment in under 10 years,
and enjoy essentially free electricity for the remainder of the
system's 30-year useful life. Such a wind energy system can be
an excellent, low-risk investment. It can provide a return of
up to 15-20%, depending on electric usage and the wind resource.
Smaller Systems Can
Offset Electricity Costs, Provide Independence
Smaller wind energy systems also can be used
to offset electricity costs, or to independently power specific
applications such as water pumps or recreational vehicle lights
and appliances.
A 3 kW turbine, including 60-80 foot tower, utility-tie inverter,
batteries for back-up system, utility switch box, battery system
box, hardware and installation components, costs about $15,000.
A homeowner using $60-100 per month of electricity can save 10-20%
off the electric bill with a 1 kW turbine, given strong wind resources.
The same homeowner could expect to save 30-60% off that electric
bill using a 3 kW turbine. (Savings depend on average annual wind
speed, tower height, electrical cost and average electric bill.)
Systems smaller than 1 kW are more typically used in stand-alone
applications, or as part of a hybrid system with solar PV cells.
A 400-watt system can be installed for $1,500.
Remote systems may require operating battery
storage. Individual batteries cost from $150 to $300 for a heavy-duty,
12 volt, 220 amp-hour, deep-cycle type. Larger capacity batteries,
those with higher amp-hour ratings, cost more. A 110-volt, 220
amp-hour battery storage system, which includes a charge controller,
costs at least $2,000.
Off-Grid Systems Can
Be the Least-Cost Option for Electricity
The cost of extending the utility grid to a
new home location can be significant, sometimes as high as $20,000-$30,000
for a distance of only one-quarter of a mile. For the same initial
investment, a utility-independent renewable energy system can
be installed that will meet the electricity needs of an energy-efficient
home. Such a system will typically include a combination of a
wind turbine, photovoltaics, batteries, an inverter, and a back-up
generator. These systems can be cost-effective on a first-cost
basis alone, not to mention the avoidance of monthly utility bills
for years to come.
The Electric Power Research Institute has gone so far as to suggest
that in some cases it may make more economic sense to remove under-used
transmission lines in the United States and serve the loads with
hybrid stand-alone power systems rather than continuing line maintenance.
More information on the economics of small wind systems can be
found in the U.S. Department of Energy’s Consumer Guide
to Renewable Energy for Your Home or Energy5 and the Iowa Energy
Center’s Wind Energy Manual.6See AWEA’s online Small
Wind Toolbox7 for descriptions and links
to numerous financial incentives including:
- Investment Tax Credits
- Investment Incentives (grants/rebates)
- Revolving Loan Funds
- Sales Tax Reductions
- Property Tax Reductions
References
[1] www.awea.org/smallwind/
[2] www.eere.energy.gov/greenpower/netmetering/nmtable.shtml
[3] See www.eere.energy.gov/windpoweringamerica/wind_resources.html
[4] www.awea.org/faq/netbdef.html
[5] www.eere.energy.gov/power/consumer/eval_wintrb_economics.html
[6] www.awea.org/smallwind/toolbox/default.asp
Other Fact Sheets Available
on Small Wind Energy:
What
is Small Wind?
How Much Noise Do Small Wind Turbines Make?
What About Visual Impact?
Small Wind Systems and Public Safety
How Do Small Wind Systems Affect Property
Values?
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