Home Wind Energy: Will it Survive Your Own Cost-Benefit Analysis?
Thinking about installing a wind energy system, but not sure if the payback period on your investment meets your financial needs? I began thinking about this question last week when our old friend (and my real old friend) bobbyb sent me an article about a couple who’d installed a wind turbine at their home in Great Britain. He noted that the numbers provided in the article (a £20,000 initial outlay for £500/year energy savings) didn’t make financial sense: “That’s a forty-year payback period!”
He’s right… that kind of cost-benefit analysis doesn’t really work. If you’re going to put up tens of thousands of dollars for a wind system (or a solar energy system), you probably want to see a return on that investment in years, rather than in decades. I got so interested in the topic that I wrote a post about things you should consider before putting your money down on a renewable energy system at SUNfiltered. Wind energy systems have their own requirements, so here are a few of the things you’ll want to take into consideration.
Will wind energy work on my property?
As with any renewable resource, some areas are better than others for home wind energy. Some of the questions you’ll need answers for include
Am I located in an area with ample wind resources? Just as solar will be a better deal in the Southwest than the Northwest, certain parts of the country have better wind resources. As you can see on the US Department of Energy’s Wind Resource Maps, the central corridor and offshore locations have the best wind availability; the Southeast generally has the worst. You can also use tools like 3Tier’s FirstLook, or Renewable Solutions’ Modern Energy Plan to find specific information on wind resources for your property.
Is my property suited to harvesting wind? In order to adequately harvest wind, you have to be able to build a tall tower that will rise above treelines and buildings surrounding your property. I’d guess that’s why the turbine built by the British family above wasn’t generating significant energy savings: it was only 40 ft. tall. According to the Mick Sagrillo, an expert who answers small wind harvesting questions on the American Wind Energy Association’s web site,
Installing your wind system on a tower shorter than the area’s tree line, or, worse yet, on top of your roof, is akin to floating in a sheltered cove of a river: you may occasionally bob a bit but there will be little forward progress. There is simply little energy in low winds that you can convert into usable electricity. Do you want kinetic yard art or a wind electric generator?
If building a tower with sufficient height isn’t an option, you probably want to consider investing your money in something other than a wind system.
Are there financial incentives and options available for wind energy?
Wind systems are expensive, so unless you’re sitting on a pile of money burning a hole in your pocket, you’ll likely want to check into incentives and financing options. These can include:
- Local, state, and federal tax incentives: You may be able to write off a portion of the money you spend on a wind turbine — check the Database of State Incentives for Renewables and Efficiency (DSIRE) for information on incentives for which you’re eligible.
- Net metering: Is net metering available in your location? Probably: 42 states and the District of Columbia have laws on the books that allow renewable energy producers to sell excess power back to their local utility at the retail rates. DSIRE is the best source of this information, also.
- Financing options: Traditionally, you’d look at a source like home equity to finance a wind power system, but other instruments such as energy improvement mortgages or property tax financing may be available to you (though many of the latter programs seem to focus more on solar energy systems).
Is wind energy right for you?
We definitely need more people acting on their environmental concerns, so if you’re serious about installing a wind turbine, that’s commendable. Just make wind energy works not only for meeting your environmental goals, but also fits your family’s financial needs… you don’t want to set yourself up for disappointment when the energy savings aren’t as high as you expected.
For more information, check out:
- The American Wind Energy Association’s Small Wind page
- The US Department of Energy’s Small Wind Electric Systems page
Image source: skyseeker at Flickr under a Creative Commons license
Why did Jeff skip the part about the local council ordering the homeowners to shut down their noisy windmill? Consideration for others – especially one’s neighbors – is also important in a civil society.
Additionally, neither the source piece nor this piece gives any mention to maintenance. Though not as extreme as on the large 1.5MW windmills, a homeowner will incur considerable costs when his windmill needs attention. Let’s look at a few possibilities:
1. Basic Oil Change and Blade Cleaning:
a. Who owns an extension ladder tall enough to reach the power head of a typical home windmill? The picture of the windmill in question seems to lack climbing pegs. Would the average homeowner risk the inherent instability of such a long ladder?
b. You could spend a small fortune on scaffolding to work at that elevation to improve the instability issues, but you still have to climb those ladders to get to the work platform.
c. If out of extension ladder reach or uncomfortable on scaffolding, you could rent an all-terrain manlift. However, don’t forget to add the costs of delivery and pick-up, getting trained in its use, renting a fall prevention harness, and provided fuel for the thing.
d. Speaking of falls, most of us in industry know that falls are typically the leading cause of major injuries and deaths in the workplace. Armed with that bit of information, how many average homeowners would be comfortable working at windmill heights?
e. Oh yeah, be sure to dispose of that used oil and/or your cleaning rags properly.
f. Maybe a few of us should buy some equipment and start a home windmill services business…
2. Gearbox Service and/or Blade Replacement:
The large windmills have a planetary gearbox that increases the RPMs from the slow turning blades to a higher RPM (3600 in the US) at the generator that matches the frequency of the electricity on the grid. Although most home systems would not be wired directly to the grid and need such an elaborate gearbox, it stands to reason that there is something atop the tower that will eventually fail. When this occurs, you need to consider everything in #1 plus add the costs for an appropriate crane, rigging, and a crew to do the job (typically one operator and two riggers). If you do not own a pick-up truck or a flat-bed trailer to transport the unit to a reputable shop, you will have to rent one of those too; or hire a carrier. Oh, and don’t forget, you have to account for both the trip to the shop and the trip home from the shop. Even if you live in fantasy land and the electro-mechanical portion of your windmill is maintenance free, at some point the blades will lose their aerodynamic properties from impacts with airborne objects and/or degradation from the sun’s unending assault on its protective coatings, which means this scenario is inevitable.
3. Battery Replacement
Most home systems take wind power to a block of batteries for storage and use within the home. Unfortunately, even the most technologically advanced batteries require replacement within a few short years. The cost of a bank of batteries will likely increase well beyond the original purchase price. Not only will inflation come into play, but the push to convert automobiles from gas guzzlers to electricity guzzlers will have a ripple effect. As the demand for the precious metals used in high-tech batteries increases, so shall the price. Alloy metals increased by nearly a factor of ten between 2000 and 2008. If this occurs again, will the average homeowner be able to withstand such an outlay of cash?
Jeff does make some great points about evaluating your location. However, when it comes to doing a cost-benefit analysis, he (like most people) ignores the “hidden” costs in favor of focusing of the initial outlay versus the avoided cost of not purchasing a portion of one’s energy. Tax incentives can pretty much be ignored since they are one-time breaks at the time of purchase. Mentioning net metering was also a bit pointless since few homeowners will invest in the extra equipment needed to convert DC battery power into AC grid compatible power. Even if they do buy the right stuff, it is unlikely that they will generate excess power for sale to the utility. No matter how you slice it, we just don’t have any cost-effective solutions that preserve our present lifestyle. If we each go back to a single room shanty with a single CFL hanging in the middle of it, green energy is ready to do the job.
To close, I am not trying to discourage anyone from spending his money on green technology. We all spend money on things that don’t pay us back just because those things make us happy. If erecting a windmill in your backyard makes you happy or improves your self image, have at it. You can’t take that cash with you when you’re gone. Just realize that you are very likely to have a non-working conversation piece towering over your backyard in a few years.
Hi Jeff - An important point is the rating of the turbine. This is referred to in the paragraphs:
1. Am I located in an area with ample wind resources?
2. Is my property suited to harvesting wind?
If you look at the power curve for most residential turbines the output is only a fraction of what the companies advertising claims. Most residential type are rated for wind speeds of 25 plus mph wind which is highly unusual.
At 10 to 12 mph wind speeds the output is minimal in most areas. You end up getting watts rather than kilowatts.
Most people would do better investing in a wind farm operation rather than installing their own turbine.
Bobby and russ — appreciate your input.
Bobby — I didn’t bring up the noise issue because it really wasn’t relevant to this discussion (and you didn’t bring it up either when you emailed me… it was all about payback). I’m glad you brought in info about maintenance, as those are important considerations for a home/property owner looking at wind systems.
I hope that I wasn’t too verbose. I just think that most environmentally conscious homeowners fail to understand that erecting windmills and/or solar panels transports them - to a large degree - into the realm of industry. The downstream costs of maintaining any industrial structure have to be evaluated on many levels. It also requires some specialized skills and equipment that are beyond the reach of the average do-it-yourselfer. Green technology may become viable for small scale use in the future, but it’s just not there today.
I wonder what the percentage of homeowners is that have installed wind or solar energy systems - and the percentage of homeowners that would consider installing this kind of system if it were more cost effective? I would guess (though I certainly don’t know for sure) that the upfront costs and the infrastructure requirements (especially for wind) would be the more prohibitive factor, rather than payback time? Certainly on the margins, anyway.
A really interesting contribution - thanks for outlining these factors!
Don’t tar solar with that scary industry stuff Bobby. Solar Installers guarantee work for ten years (don’t wind installers?)
All you need to do is aim a hose up onto the roof once a summer, but just like an oil change, its ok if you don’t.
I must file a complaint! Why is it that nowhere on the web, or anywhere else, is wind discussed in a real-world way? By that I mean in contexts that the vast number of inhabitants of the planet will and do encounter.
I mean, hey, this is “Sustainablog,” fer cryin’ out loud!! Of course these huge turbines that cost tens of thousands of dollars are losers. The primary reason is that they are available to a tiny fraction of the planet. I’m fairly middle class and couldn’t afford one no matter how I twisted my finances.
What I *can* afford, however, is to hang out in my garage with some friends and/or neighbors for a week and build my own 1kw (a la Hugh Piggot, et al.) windmill. And what I *must* do, anyways, for climate Change and Peak Oil is reduce my consumption to a fraction of what it currently is. So, if I go to a very low carbon footprint and spend $1k US on a windmill system, what is my ROI? Far better.
I don’t know enough about utility rates and wind generator output to figure this out, but you two probably do. Why is it not included? As I said already, what is shocking to me in the renewable energy debate is a complete write-off of micro, DIY energy systems even though there are people all over the planet successfully using them.
No, instead we have article after article about how we need 3ks wind generators so we can power our McMansionville existence.
Maybe another way is needed: http://aperfectstormcometh.blogspot.com/2008/03/build-out-grid-vs-household-towards.html
C’mon, guys, impress us. Let’s see the calcs for some of the successful DIY systems.
Cheers
CCPO - Not interested in impressing you. Don’t bother thinking that the ‘calcs’ are going to support some pie in the sky concept - it ain’t there!
When you build your own 1000 USD wind turbine (possibly from instructions for sale on the net) and it possibly fails to work at all and never generates enough power to bother with you will understand.
Forget the Gorific ‘perfect storm’ stuff. If you really believe that the only solution is religion.
Wind turbines follow the laws of science - you are not going to find any freebies with them.
The commercial operations, wind farms & solar CSP, have a chance to be successful.
The small scale home type will make it with a few energetic and knowledgeable do-it-yourselfers.
Probably 90% of the residential units being spread around will not be in service in 5 years time - if that long.
@Susan - I have tried to wash the dust off of my car many times with just a garden hose. It does not work. Even after a thorough cleaning and the application of a super-slippery coat of wax, dust continues to accumulate and it still requires elbow grease for proper removal. A PV cell’s efficiency is directly linked to its cleanliness. You will suffer losses if only hosing off annually. You got to get access and clean manually if you want peak performance. Oh, and there are no batteries currently carrying a ten-year guarantee; save for a couple of watch batteries. Your installer will only guarantee the quality of his work. The equipment will be guaranteed separately - and for a shorter time period - by the equipment manufacturer. The law only requires electronic and electrical devices to carry a 90-day warranty.
@ccpo - Let’s run some numbers for your theoretical homebuilt windmill:
BEST CASE
Capital Outlay: $1,000
Peak Output: 1 kw (you always get less, but let’s ignore that reality to inflate the numbers in your favor)
Daily Peak Output: 1 kw * 24 h = 24 kw-h (assuming the wind generates peak output continuously)
Average Cost of Grid Electricity: $0.09/kw-h
Daily Cost Offset by Windmill: 24 kw-h * $0.09/kw-h = $2.16
Return On Investment: $1000 / $2.16 per day = 463 days or 1.3 years
Conclusion: Not Bad
LIKELY CASE
Capital Outlay: $1,000
Peak Output: 1 kw
Estimated Efficiency: It’s a homebuilt, but let’s be generous and say 60% efficiency
Wind Availability: Assume 8 hours at peak, 8 hours at 50% peak, and 8 hours dead calm
Daily Output: (1 kw * 8 h) + (0.5 kw *8 h) = 12 kw-h
Daily Output at 60% Efficiency: 12 kw-h * 0.60 = 7.2 kw-h
Average Cost of Grid Electricity: $0.09/kw-h
Daily Cost Offset by Windmill: 7.2 kw-h * $0.09/kw-h = $0.65
Return On Investment: $1000 / $0.65 per day = 1538 day or 4.2 years
Conclusion: Still Not Bad
REALITY CHECK
If you generate at peak output of 1 kw, what appliances can you power with that energy? Let’s look at some of the lesser energy hogs:
Small Refrigerator Energy Use: 120 V * 15 A = 1800 w = 1.8 kw (Not Even Maybe)
Hair Dryer: 1200 w = 1.2 kw (Not That Either)
Microwave Oven: 1000 w = 1 kw (Just Maybe)
You can forget the air conditioner, the heater, the hot water heater, the laundry machines, and a host of other common appliances. However, take heart, you could run a few CFL’s, a laptop, and a LCD television.
Again, I am not trying to dissuade anyone from making such an investment. Doing so can certainly provide the buyer with other intangible benefits.
Bobby B: Thank you! Excellent response. You didn’t mention battery back-up, but I wouldn’t have one without that, and the build costs can include battery back-up. I doubt you could be grid tied for that, though.
It’s important to remember I *am* including large, but to my mind positive, behavioral changes that make micro, DIY serviceable for some. This is even more true when you include other elements such as some solar power, heat pumps, etc., depending on funds and circumstances.
It is also possible to build DIY solar panels (can’t remember the output) for 1k. So, you could have two windmills and 3 solar panels for $5k, for example.
Yo, Russ! What the heck is your problem? I’ve re-read my post and see nothing offensive there. Why be an arse?
BTW, there are people living off-grid with DIY systems, so don’t know what to say except that you are demonstrably wrong.
Cheers