Do Small Scale Wind Turbines Actually Save You Money?

Introduction

With rising energy costs, many homeowners are looking for ways to reduce their electricity bills. Small scale wind turbines, installed right on your property, seem like an attractive option. But do small scale wind turbines actually save you money?

I've done extensive research on this topic as I considered installing a small turbine on my own home. In this article, I'll walk through all the key factors to understand if and when small wind turbines provide a good return on investment.

Upfront Costs

The first thing to look at is the upfront cost. A new small scale wind turbine can cost $15,000 to $50,000 installed. This wide range depends on the turbine size, tower height, and whether batteries are included for off-grid storage.

This is a major investment that takes years to pay off through electricity savings. Many homeowners simply can't afford this initial outlay.

Key Takeaways on Upfront Costs

• Small wind turbines cost $15,000 to $50,000 installed.
• The high upfront cost takes years to recoup through energy savings.
• Affording the initial investment is a major barrier for most homeowners.

Electricity Output

The key to getting your money back is producing enough electricity to offset your utility bills. But many factors influence how much electricity a small turbine will generate:

• Wind speeds - Turbines need annual average wind speeds of at least 11 mph to operate effectively. Less wind means less electric generation.

• Tower height - Towers between 80 to 140 ft maximize energy production. Shorter towers see much lower output.

• Surrounding obstructions - Trees, buildings, and hills disrupt wind flow substantially reducing power output.

• Rated power - The turbine's rated power depends on its size. But most small units are 2 to 10 kW. Their output depends on sustained wind speeds.

• Batteries - Storing power allows you to use the electricity when needed. But batteries add substantial cost for potentially little energy benefit.

Key Takeaways on Electricity Output

• Many factors influence how much electricity a small turbine will generate.
• Sufficient wind, tower height, lack of obstructions are critical for good output.
• Most small units only provide 2 to 10 kW of rated power. Their real-world output depends on wind speeds.
• Adding batteries adds substantial cost for questionable energy benefits.

Cost of the Generated Electricity

Ultimately, you need to compare the cost per kWh your utility charges versus your cost per kWh with a wind turbine.

Cost per kWh considers the total turbine investment and annual maintenance divided by the kWh output over the system lifetime. Key factors include:

• High initial cost spreads over total kWh produced
• More kWh output lowers cost per kWh
• Maintenance averages $350/year but increases over time
• Inverters and batteries may need replacement
• Lifetime averages 20 years

Most analyses show small wind energy costs 10 to 30 cents per kWh. Utility electricity averages around 12 cents per kWh and continues falling with natural gas prices.

Key Takeaways on Cost per kWh

• Cost per kWh factors in system cost spread over lifetime kWh output.
• More kWh output lowers cost per kWh.
• Small wind energy costs 10 to 30 cents per kWh, much more than utility electricity.

Financial Incentives

Tax credits, incentives, and net metering can improve the return on investment for small wind turbines. But the benefits are limited and very location dependent.

The federal investment tax credit (ITC) provides a 30% tax credit on installed costs. But few homeowners have sufficient tax burden to use the full credit.

State incentives, power purchase agreements, or renewable energy credits provide additional benefits in certain locations. Net metering allows selling excess power back to the grid.

Key Takeaways on Financial Incentives

• Federal tax credits provide a 30% credit, but most homeowners can't use the full amount.
• State incentives improve cost effectiveness in some locations.
• Net metering helps recoup costs where available.

Summary - Do Small Wind Turbines Save Money?

So do small scale wind turbines actually save you money? The short answer is usually not with today's economics.

The high initial investment, uncertainty of sufficient wind resources, and falling electric utility rates make it very difficult to get a reasonable return on investment from a small wind turbine.

Tax incentives and net metering improve the economics in some cases. But unless you have very good wind speeds, few obstructions, and low electricity costs, small wind turbines likely won't save you money.

Carefully evaluating your particular situation is critical before investing in a residential wind turbine. In most cases, you are better off investing that money elsewhere and continuing to buy electricity from your utility.