“The Economic Costs of Small-Scale Wind Turbines”

“The Economic Costs of Small-Scale Wind Turbines”

Introduction

Small-scale wind turbines, also known as small wind systems, are wind turbines with capacities below 100 kilowatts. They are an attractive option for homeowners, farms, and small businesses looking to generate their own electricity. However, while small wind systems can provide clean, renewable power, there are significant economic costs to consider before investing in one. This article will provide an in-depth look at the various costs associated with small wind turbines.

Upfront Costs

The most obvious economic cost of a small wind turbine is the upfront cost of purchasing the system. This includes the turbine itself, as well as the tower, batteries, inverter, wiring, and any site preparation needed. Upfront costs can vary widely, but as a general guideline:

  • A 5 kW turbine costs $15,000 to $35,000 installed
  • A 10 kW turbine costs $20,000 to $50,000 installed
  • A 20 kW turbine costs $35,000 to $80,000 installed

The specific costs for a wind system depend on the size, brand, tower specifications, and location. However, it is clear that the upfront investment for a wind turbine represents a significant expense for most homeowners and businesses.

Installation Costs

In addition to the turbine itself, there are costs associated with transporting, foundations, electrical connections, and physically mounting the wind turbine.

  • Transportation costs depend on the turbine size and location. Larger turbines or more remote sites can require the use of cranes and other special equipment.

  • Foundation costs vary based on the soil conditions and tower design. Concrete may be needed to anchor the tower.

  • Electrical connections require wiring from the turbine to batteries/inverter. This wiring must be properly sized and installed.

  • Installation labor can easily cost $10,000 to $20,000 for a professionally installed small turbine.

These installation costs can potentially double the upfront cost of a wind turbine. They must be accounted for in the project budget.

Ongoing Maintenance Costs

Small wind turbines require regular maintenance to keep them operating efficiently. Routine maintenance costs include:

  • Component replacements – brushes, bearings, inverters, and batteries wear out over time.

  • Lubrication and inspection of mechanical components.

  • Blade cleaning to remove dirt and debris buildup.

  • Technical monitoring to check power output and catch problems.

  • Repairs for any damaged or malfunctioning components.

These maintenance costs typically add up to $250 to $1000 per year for a small turbine. The costs are higher in saltwater coastal areas where corrosion is a concern. Proper maintenance is essential to maximize energy production and return on investment.

Land Leasing Fees

If locating a wind turbine on someone else’s land, there will likely be land leasing fees to pay. Typical lease rates are $6,000 to $10,000 per turbine per year. Alternatively, some landowners structure leases as a percentage (such as 3-5%) of the turbine’s gross revenue.

Land leases represent a recurring annual cost for the lifetime of the turbine. The lease rate directly depends on the competitiveness of the site. More ideal sites command higher lease fees from wind developers.

Lost Production Costs

One hidden cost of small wind turbines is lost production when the turbine is not operating. This can happen frequently with small turbines. Causes include:

  • Insufficient wind speeds
  • Extreme weather events forcing shutdowns
  • Unexpected malfunctions and repairs
  • Routine maintenance downtime

Lost production results in less energy generated than expected based on a turbine’s rated capacity. The National Renewable Energy Laboratory estimates that most small turbines only achieve 15-25% of their rated capacity over a year. Those lost kilowatt-hours represent lost potential revenue.

Financing Costs

Since small wind turbines are expensive, many homeowners and businesses need to finance the upfront costs. Loans, leases, and power purchase agreements often involve interest rates of 6-10% or more.

These financing costs significantly add to the overall cost of a turbine project:

  • A $40,000 turbine financed at 8% over 15 years costs $71,000 with interest
  • A $60,000 turbine financed at 10% over 10 years costs $93,000 with interest

Carefully evaluating financing options and terms can potentially save thousands of dollars over the life of the wind system.

Summary

In summary, the economic costs of small wind turbines include substantial upfront system costs, installation expenses, ongoing maintenance fees, land leases, lost production, and financing costs. These factors cause the true total cost of a small wind project to far exceed the initial price tag. While small wind can still be a viable investment in some situations, all of these economic factors must be thoroughly considered before moving forward. Careful analysis of costs and electricity needs will help determine if small-scale wind is an economical option.