What would a Small Wind Power System Cost?

There are several aspects of cost: the cost of the wind generator, the cost of the balance of the plant (the power electronics, tower, installation), the cost of interconnection (including any required engineering studies to ensure that the wind system can be integrated with the grid without impacting the quality or reliability of service to neighboring cooperative consumers, and any upgrades needed to the distribution system), and the cost of maintenance from a reliable service provider.

Small wind systems are usually rated in kilowatts (kW) of generating capacity, and range in size from less than 1 kW to 100 kW. Uninstalled, a 10-kW small wind system is likely to cost between $28,000 and $36,000. Installation costs can range from $6,000 to $22,000, depending on the site conditions. As a rule of thumb, a 10-kW wind turbine system—installed—can cost from $40,000 to $50,000, depending on the type and height of the tower, not counting interconnection and maintenance costs.

Are any Incentives Available for Wind Power Systems?

At present, there is no federal production incentive for small wind systems. The Farm Security and Rural Investment Act of 2002, which expired September 30, 2007, included a provision—Section 9006—that provided grants of $2,500 to $500,000 or up to 25% of the eligible costs of rural renewable energy projects. The Farm Bill Extension Act of 2007, which continues agricultural programs through 2012, provides $500 million in grants for small-scale renewable energy projects.

The grants are only available for agricultural producers that earn at least 50% of their income from agricultural products. Small rural businesses also are eligible. But the application process for a grant or loan under Section 9006 can be complicated and time-consuming.

A sample application form is available on the Department of Energy’s (DOE’s) energy efficiency and renewable energy (EERE) Web site here.

Several states offer incentives that help reduce the installed cost of a small wind system. Among them are California, Ohio, Massachusetts, New York, Vermont, Wisconsin, Iowa, Illinois, Hawaii, and New Jersey. The Database of State Incentives for Renewables and Efficiency (DSIRE) provides detailed state-by-state information on incentives.

How much Electricity can be Generated?

You should first determine how much electricity you want to generate. Based on your current electricity usage, decide how many kilowatt-hours you would like your wind turbine to generate. Once you know how much energy you want your generator to produce, you can select a turbine size at the right scale to meet your needs.

It is also necessary to look at local conditions. The wind speed on your site—at the height at which you intend to erect your wind turbine—is a critical factor in estimating your energy output. National wind speed tables provide estimates, but the wind speed at your location could vary considerably from those tables. It is worth noting that utilities planning to install commercial turbines collect two years of data on wind speed. Many small wind advocates argue that meteorological data is not necessary for small wind generators. Nevertheless, energy output is directly correlated to wind speed and wind speeds can vary greatly depending on location and height. If you choose not to erect a “meteorological tower” to measure wind speeds at your site, talk to your turbine vendor to get the best possible wind data for your location.

A capital cost recovery analysis worksheet that enables you to calculate the kilowatt-hours a small wind system will generate annually given assumptions about the size of the wind turbine and estimated wind speeds at your site. This worksheet is included in this packet.

Most small turbine manufacturers provide an estimated monthly energy output in kilowatt-hours at a particular wind speed. Experts caution consumers about taking these figures at face value, however.

Does the Cooperative buy the extra power I generate? What am I going to be paid? What is net metering? What is avoided cost?

Access Energy Cooperative will buy the excess electricity produced by member-consumers from small renewable generators. We will buy your excess electricity at a fair rate that also ensures other member-consumers on the system do not bear an undue cost for their electricity.

Net metering is one tool for valuing and measuring the electricity generated and used by a utility consumer who has a distributed generation (DG) system, such as a small wind generator. Under net metering, when a consumer uses electricity supplied by the cooperative, the electricity meter moves forward. When the consumer’s wind generator produces more electricity than the consumer needs at any particular time, the excess is fed back into the grid, and the meter rolls backwards. The consumer exchanges the power it uses one-for-one with the power it exports, and is thus credited at full retail rate for any excess energy it produces.

Access Energy Cooperative has chosen not to net meter consumer-owned generation because it is a subsidy that raises costs for other consumers on the system. Net metering policies require utilities to pay consumers the retail price for wholesale power. The retail rate utilities charge includes not only the marginal cost of power, but also recovers costs incurred by utilities’ for transmission, distribution, generating capacity, and other utility services not provided by the consumer-generator. The policies also require utilities to pay high costs for what is often low-value power. Power from wind and photovoltaic (PV) systems is intermittent, cannot be scheduled or dispatched reliably to meet system requirements. Further, net meters allow customers to underpay the fixed costs they impose on the system. A utility has to install sufficient facilities to meet the peak requirement of the consumer and recover the costs of those facilities through a kilowatt-hour charge. When the net meter rolls backwards, it understates the total energy used by the consumer, and thus understates the consumer’s impact on the fixed costs of the system. It also understates the consumer’s total share of other fixed charges borne by all consumers such as billing, system maintenance (tree trimming, pole replacements and right of way spraying), administration costs, and public benefits charges.

Access Energy Cooperative uses net billing and installs a single advanced meter capable of reading power flows in each direction. Net billing provides a way for member-consumers to pay their fair share of costs for electric service while benefiting from their small wind system. Our meter measures electricity coming from the grid separately from the excess electricity being delivered to the grid from the wind turbine. This approach is consistent with the PURPA, where the consumer buys power from the cooperative at the retail rate and sells power to the cooperative at the avoided—or wholesale—cost.

Member-consumers may ask about the difference between net metering and net billing. In net metering, the electricity being delivered to the grid by the member-consumer is netted against the electricity being delivered to the member-consumer. The value of power imported and exported, therefore, is the same. Member-consumers are paid full retail value for the wholesale power they export to the grid. By contrast, net billing nets the value of power exported against the value of power imported, allowing the retail and wholesale power to be valued at different levels. The netting occurs in the billing process. Under both approaches, the consumer has first call on generator output.

The member-consumer uses the output of the wind turbine to off set power they would normally purchase from the coop. By off setting power they would have purchased at retail rates the member-consumer receives the highest value for the portion of their wind turbines output they use. The utility only buys that portion of the consumer’s output that exceeds their simultaneous demand. The consumer only buys power from the utility when their load exceeds the simultaneous output of the wind turbine.

How do I get connected to the Cooperative grid? Does this cost anything?

Connecting your wind generator to the grid allows you to send excess power to the cooperative as well as buy electricity from the cooperative when you need to.

Requirements for interconnection vary based on the type of generator. If your wind turbine requires power from our electric system to operate the interconnection is fairly simple, usually a manual disconnect switch. If however, your wind turbine can operate without being connected to our electric system interconnecting becomes very complicated, requiring an automatic disconnect switch and multiple types of sensors to detect power problems. In either case, the wind turbine must meet all electric codes and the turbine must be synchronized with our grid, match our voltage, frequency and power quality. There must also be a locked disconnect that Access Energy Cooperative’s personnel have access to isolate the unit from the grid in the event of a power outage. Any costs associated with upgrades on our system are the responsibility of the member-consumer. Prior to purchasing a wind turbine contact Access Energy Cooperative to determine what requirements your system will need and what costs will be associated with there installation.

What, if any, permits and inspections are required to operate a wind turbine?

You will need a building permit to install a wind turbine. Start by contacting your county planning or permitting department. Find out what zoning regulations apply to nondwelling structures on your property.

Ask if small wind systems are specifically addressed by local ordinance, and if so, get a copy of the ordinance. You will need to know the permitting procedures and what documentation is required for your turbine. Check local land-use codes carefully for special zoning ordinances that authorities may have overlooked.

Zoning regulations may limit the height and placement of your wind turbine, so a special-use permit or variance may also be needed. A zoning variance is a project-specific exception from existing zoning regulations. You will need to comply with the conditions of that permit or variance, which usually pertain to minimum lot size, maximum tower height, setback (the distance from the property line that a turbine must be sited), and electrical code compliance. In addition, you may have to submit a structural plan drafted by an engineer, but documents from your turbine manufacturer or dealer may be sufficient.

If you have to appear at a public hearing seeking a conditional use permit or variance, be prepared to answer questions about your project. A hearing may turn out to be a mere formality, but be ready for anything that might come up. Here are some tips: Seek the support of your neighbors before the hearing. Compile documented factual information to reassure anyone worried about noise, visual impact, possible affects on wildlife, and property values. Planning and zoning officials may be unfamiliar with small wind systems, so be prepared to explain the basics.

Fees for building permits, use permits, zoning permits, and “plot plans” can range from $400 to $1,600. There may be other fees for public notification, hearings, and environmental impact studies costing from a few hundred to several thousand dollars. If a fee seems inappropriate or excessive, you may be able to get it reduced or waived. Find out what you are being charged for and offer to provide documentation or information that makes the fee unnecessary.

Why do I have to carry $1 million in liability insurance?
It is very common for businesses and individual homeowners to carry liability policies to insure against losses or claims. Member-consumers should not view carrying liability insurance on a wind turbine any differently than the liability insurance on any other personal property. Insurance is carried to provide coverage for damages to others and their property for example if a tower should fall or someone comes in contact with the electric system. It is up to the owner of a wind generator to provide insurance coverage.
What kind of payback can I expect in terms of breaking even?

Your cooperative can provide a capital cost recovery analysis worksheet that you can use to calculate the annual operating cost of your small wind system. The payback period for a small wind system can range from several years to several decades, depending on the cost of the system and the average annual wind speed at the hub height—the distance from the ground to the center of the turbine rotor. The average speed is often more critical to the payback period than the initial installed cost, according to some experts.

You can also calculate the simple payback of a small wind system by the following formula, assuming the wind turbine is properly sized not to exceed your demand:

(Installed cost including interconnection costs and any necessary system upgrades, $) ÷ (kWh/y x Retail price of electricity, $/kWh – annual operation and maintenance [O&M] cost, $/yr) = years

The annual O&M cost may include insurance premiums, maintenance calls, service contracts, and the net present worth of long-term repairs.

How reliable are wind turbine systems? Will I have to perform much maintenance?

Most wind turbines are designed for a long life and operate completely automatically. Obtain at least two references from the company that produces and/or sells the wind generator model that you are considering. Ask those owners about the generator’s reliability and its maintenance requirements.

Find out what maintenance the turbine manufacturer recommends. Small wind experts recommend an annual inspection of your wind turbine. Check bolts and electrical connections, and tighten if necessary. Also check and replace any worn leading edge tape on the blades. After 10 years, the blades or bearings may need to be replaced.
If you do not have the expertise to maintain your wind generator, find out what companies provide maintenance services in your area. Makes sure the companies give references, and ask what a service contract will cost.

As one small wind expert has noted, if you do not change the oil in your automobile, you’re unlikely to carry out maintenance on your wind turbine.

Where can I find out more about wind turbines and where to buy them?

Paul Gipe, a wind energy expert with more than 30 years of experience in the field, has written extensively about wind turbines. Two books that focus on small wind systems are Wind Power: Renewable Energy for Home, Farm, and Business and Wind Energy Basics Revised: A Guide to Home- and Community-scale Wind Energy Systems.

Other sources of information include:
•The U.S. Department of Energy’s (DOE’s) Small Wind Electric Systems: A U.S. Consumers Guide
• The DOE’s Office of Energy Efficiency & Renewable Energy (EERE)
• Home Power magazine’s article “Wind-Electric Systems Simplified”

To find a wind turbine dealer or installer, ask any small wind system owners in your area for references. In addition, contact the manufacturer of the wind turbine you are interested in for recommendations and suggestions for authorized dealers.

Another option is to ask your state’s renewable energy organization or energy office. The National Association of State Energy Officials’ website provides contact information for state energy offices. Regional organizations, such as the Midwest Renewable Energy Association (MREA) might also be able to help.

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