Cost of Wind Energy

Cost of Wind Energy
Wind Generator - Cost of Wind Energy

Powering our homes with renewable energy generated on-site is a dream of many green homeowners, but reality often has a way of throwing a monkey wrench into those dreams. Renewable energy systems, whether wind, solar, or a combination of both, tend to be expensive to purchase and install. Depending on the amount of wind and sun your home receives, payback periods for these large upfront costs can take decades.

Turning wind into usable electricity works by converting the kinetic energy in wind first into mechanical energy and then into electrical energy. The conversion uses a technique that's been around for hundreds of years. Wind turns a tubing's blades, which is transferred to the turbine's rotor, creating electricity. The process is simple, the energy it creates is clean. The key question is: How much does it cost?

It's Getting Cheaper All The Time

The good news is wind power is getting cheaper all the time. The U.S. Dept. of Energy pegs the cost of wind power at $55.60 per megawatt hour. Compared to coal energy at $53.10 per MWH and natural gas at $52.50 per MWH, it's clearly more expensive. However, as wind power continues to grow into a mature technology and turbines produced in larger numbers, it is getting less expensive. Between 1984 and 2004, wind power costs dropped by 80%.

Wind energy's costs are almost all up-front. After a system is running, the power it creates is free. Wind power has no fuel costs, and maintenance costs are very low, often nonexistent.

For green homeowners, the clear benefit of wind power over fossil-fuel energies is the fact that there are no carbon costs. While not a financial cost, environmental costs should always be taken into consideration. Think of it this way: a 40 watt light bulb left on for 24 hours uses about 1 kilowatt hour of electricity. If that power comes from the utility grid, that power will create 1.5 pounds of carbon dioxide. The same amount of power from a wind turbine: no carbon emissions at all.

Residential Wind Power Systems

While most of the buzz about wind energy is focused on large commercial turbines and wind farms, there are companies specializing on smaller systems designed exclusively for residential usage. These systems' turbines are quiet; many can be installed on shorter poles.

Costs for residential wind systems vary by size and manufacturer. The average U.S. home uses around 6,500 to 10,000 kilowatt hours of power a year. A wind system can replace some of all of a home's utility power with renewable wind energy. In 2007, the average cost per kilowatt hour of power created by a home wind energy system was around 10-11 cents per kilowatt hour.

One 10 kilowatt wind turbine (on a site with 12 mph average wind speed) can generate around 10,000 kilowatts per year. For home use, a system with an output of 2 to 10 kilowatts per hour is typical, but again varies depending on the size and energy-efficiency of your home. Costs should include the wind turbine, power, inverter, wiring, foundation, shipping, installation, and permit fees.

Small residential systems, capable of generating 2 to 5 kilowatt hours, are generally in the $7,000 to $15,000 price range. Small systems are ideal for small homes, or locations in urban or suburban environments; they generally have small turbines and shorter poles (15 to 40 ft.). making them neighbor and zoning commission-friendly. Some small systems also work better in lower average wind speeds.

Larger residential systems, capable of 4 to 8 kilowatt hours, are better suited for suburban and rural areas. They can have towers up to 100 ft. tall, with larger turbines. These systems generally produce enough electricity to power an entire home with average to above-average energy efficiency. These systems are in the $22,000 to $55,000 price range.

*It's important to note that replacing utility power completely with renewable power (going 'off-grid') requires batteries to store power; this can add thousands of dollars to a residential energy system.

Very large systems, 10 kilowatts or higher, run $80,000 to $125,000. These require 90 to 120 ft. towers, large turbines, and will require special zoning permits. They have high shipping and installation costs. They can provide power for very large homes.

How Much Will Wind Energy Save?

As we mentioned earlier, most of wind energy's costs are up-front. The free wind energy will eventually cover the large up-front costs, but it can take a long time. How much you save depends on the energy efficiency of your home and your local electricity rates. However, depending on your wind turbine system size, wind quality, permit and energy costs, and turbine performance, payback periods for small wind systems range from 6 to 15 years. Larger systems (10 kilowatt) can take 15 to 30 years to make up your initial costs.

Many local areas may offer rebates or tax incentives for installing wind power. These can dramatically lower the costs (and reduce payback periods). The U.S. Government offers a generous tax credit for small wind turbine systems of no more than 100 kilowatts. The tax credit is 30% of the system's cost (including installation) with no upper limit. The rebate expires December 31, 2016. Both new and existing homes qualify, as do principle residences and second homes. To apply for this tax credit, follow this link: Energy Star Stax Credits

A shiny new wind turbine spinning proudly over your home is a powerful symbol of your commitment to renewable energy.

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