So called small wind has grown to become quite a success story in the USA in recent years. So called because it involves the use of small-scale horizontal and vertical axis wind turbines with generating capacities of 100 kilowatts (kW) or less, the US market for small wind turbines isn’t exactly small anymore. Total installed small wind turbine capacity surpassed the 100-megawatt (MW) milestone in 2009 — half the increase occurred in the previous three years — and grew 26% in 2010, according to the American Wind Energy Association (AWEA).
You’ll need sufficient space and wind strength to install a small wind system, but advances in technology, along with financial incentives and stimulus programs, make small wind turbines an increasingly attractive investment for a widening range of locations and purposes, as well as from a variety of perspectives. Installing a small wind turbine can enable you to:
- significantly reduce your monthly utility expenses
- become partially, if not completely, self-reliant for electricity
- generate emissions-free, renewable electrical power for many years
- contribute to a rapidly growing manufacturing sector that’s creating green jobs
- help reduce your nation’s dependence on fossil fuels and imported oil
- reduce your taxable income
- earn credits against your electricity bill by supplying electricity to the grid
- increase the value of your home and property
The Small Wind Turbine Market:
Nearly 8,000 small wind turbines worth $139 million were sold in the USA in 2010, according to the AWEA’s 2010 US Small Wind Turbine Market Report. That’s an additional 25.6MW of clean, renewable electrical power. (source: www.awea.org)
The added capacity from 2010 brought cumulative US small wind turbine sales up to 144,000 units, and total generating capacity up to 179MW, enough to avoid 161,000 metric tons of CO2 emissions every year, the equivalent output of 28,000 cars. Sales and installations represented the equivalent of 1,500 full-time jobs.
The US small wind turbine market has been an economic and manufacturing bright spot in difficult economic times, growing more than 15% in 2009 in a recession.
It also remains a predominantly homegrown market. US manufacturers account for 83% of the domestic market on a unit basis and 94% of domestic sales. Eighty percent of all the components used in USA-manufactured small wind turbines were also made in the USA.
Globally, seven of 13 small wind turbine manufacturers around the world reporting sales greater than 1MW in 2010 were from the USA. Two-thirds of all global small wind turbines sold were made by US manufacturers.
Where Are They Being Used?
The US small wind turbine market is evolving with changes in technology, market environment and conditions, and public values and attitudes regarding energy use and production. In its 2011 market report, the AWEA noted a “pronounced shift” away from off-grid micro-scale (1kW or less) to larger, grid-connected systems. On-grid units made up more than 90% of added small wind generating capacity in 2010.
While small wind turbine use continues to grow in remote and rural locations and to support on-grid electrical power, the number of suburban, and even urban, small wind turbine sites is increasing as well.
The residential (primarily rural) market continues to be the leading source of demand for small wind turbines. Off-grid and grid-connected homes are the principal users of small wind turbine systems with capacities less than 20kW, according to the AWEA.
Farms are another stable and growing source of demand, particularly with farmers reinvesting in their farms as a result of higher commodity prices. The AWEA reported modest growth among US farms in 2010, mostly of 50-100kW turbine systems.
Use of small wind turbines to generate electrical power is also growing with schools and universities, as well as municipal government sites. Commercial, light industrial sites and hospitals are growing users of small wind turbine systems greater than 5kW for grid support, as well.
Small Wind Turbine Economics:
The average installed cost of a small-wind turbine in the USA was $5,430/kW in 2010, according to the AWEA. In addition to the cost of purchasing and installation, you’ll need to factor maintenance costs into your small wind system financial calculations.
The availability of net metering is a key consideration when choosing a small wind system, particularly when it comes to deciding whether to connect to the grid or go off-grid. Two-way net metering is spreading across the USA. If your electricity provider offers net metering, installing a small wind system can produce some monthly income, at the very least in the form of credits that can reduce your electric bill when you use more than you generate.
To get a net metered small wind system up and running, you’ll have to contact and work with your electricity provider, local authorities and neighbors, make your way through a state application process, and purchase interconnection materials. Though approved or disapproved at the state level, it’s advisable to discuss your plans with neighbors as well as local officials, and any relevant property owners’ groups, as there may be additional rules and restrictions that apply.
There are alternative ways to evaluate the return on your small wind systems investment. Given all the factors involved, this can get fairly complicated and could be an article unto itself. I’ll mention two of the most common financial metrics: net present value (NPV) and internal rate of return (IRR). Both are discounted cash-flow methods that take into account the amount and timing of cash inflows and outflows, the time period of the investment, the time value of money, and a discount rate or rate of interest indicative of the opportunity cost of investing your capital elsewhere.
Incentives:
There’s a lot in the way of financial incentives and assistance available to reduce the size of your small wind turbine system investment and make it more affordable. Federal, state, utility and local agencies provided more than $30 million in rebates, tax credits, grants, low-interest loans and other forms of financial assistance for small wind systems in 2010, the AWEA reported. Approximately half of US small wind turbine sales by capacity, 12.4MW or 900 units, benefited from discounts in 2010.
Perhaps the most significant boost for the US small wind turbine market came in 2009, when both the President and Congress agreed that small wind systems, along with other better known types of more renewable power technology, qualify for a federal Investment Tax Credit (ITC). That means you can deduct what you paid for a small wind turbine system from your gross income dollar for dollar, thereby reducing your federal income tax.
The US Department of Agriculture and Treasury Department also offer support programs. The US Department of Agriculture’s Rural Energy for America Program (REAP) and the Treasury’s 1603 payments funded 250 small wind installations with a total 6.8MW of capacity across 30 states last year. Installations in Iowa, Ohio, Wisconsin, Massachusetts and Nebraska received more than 3/4 of the $13.7 total, according to the AWEA.
Some 30 US states offered small wind incentives and grants in 2010, more than 1/3 the result of funding from the American Recovery and Reinvestment Act of 2009. California and Wyoming funded the most small wind turbine installations in 2010. Ohio, Arizona, Colorado and New York followed.
The US Department of Energy’s (DOE) website is an excellent source of independent information on financial incentives and other programs, as are state and local government information resources. The small wind section of the AWEA’s website is another. Your local electrical utility, or utilities, can also be good sources, and they may even offer their own incentives.
How To Choose the System that’s Right for You
To begin with, you should familiarize yourself with the basic working and components of a small wind turbine and system. There’s a wealth of information out there and it’s readily accessible on the Internet. The AWEA’s small wind website is an excellent resource, as is the DOE’s Wind Powering America website, which includes a US Consumer’s Guide to Small Wind Electric Systems. Manufacturers’ websites, such as Phonowind’s, can also be excellent information resources.
You’ll need to have enough open space, as well as permission from state and local authorities, to install a small wind system. One acre is generally the minimum deemed suitable for conventional horizontal-axis small wind turbines, though this varies with local conditions, rules and regulations. Reportedly more efficient and requiring less space, vertical-axis wind turbines may be a viable and attractive alternative, especially for those with limited open space.
You’ll need to know your location’s wind power potential at various altitudes, the topography and your own energy requirements. Determining how much energy you use and how much you’d like to produce provides a solid base for comparisons and will help you decide on the type and size of turbine you’ll need.
The federal and state governments are valuable sources of information when it comes to determining local wind strength and variability. The DOE’s Energy Savers Program has a website specifically for this purpose. The National Oceanic & Atmospheric Administration’s (NOAA) National Climatic Data Center (NCDC) provides free, public access to local average wind speed data.
Local area wind maps are also available from state government departments and agencies, as well as from small wind turbine manufacturers. You may need to spend a little time familiarizing yourself with them, but they are excellent resources and great places to start.
Alternatively, or in addition, you could install one or more anemometers at various heights, and measure wind speed and variability yourself. A year’s worth of data would be ideal, but you may be able to do with less and still be reasonably assured you have a good estimate.
Perhaps the most direct way to go about this would be to hire a wind power site assessment specialist to do it. You may want to find one that’s independent of any particular manufacturer to assure that they are completely unbiased.
Zoning and Permitting
Another key element of choosing a small wind system is getting familiar with state and local zoning and permitting regulations and procedures. State and local authorities typically categorize wind turbines by their generating capacity and height, both to evaluate whether or not they qualify for financial incentives as well as for zoning permitting purposes.
Definitions of small wind systems vary from state to state. Vermont, for example, defines a small wind system as one with less than 15kW capacity less than 120’high. Searching through your state and municipal government websites, and/or paying a visit to one of their offices, are good ways of getting started.
When it comes to zoning, visual impact is the main consideration for wind systems, both small and large. Noise is also considered when state and local officials assess any “undue adverse impact” the system would have on neighbors and the community. If you live in a housing development or subdivision, or if you belong to a neighborhood association, you’ll probably need to get formal approval from them before moving ahead with local and state approvals.
Small Wind Turbines: What’s Out There?
You’ll also need to become familiar with alternative small wind turbine types and find out what’s available in your area. In addition to traditional small horizontal axis wind turbines, there is a growing number of vertical axis wind turbines on the market.
There are at least 66 domestic small wind turbine manufacturers in the USA, according to a 2008 AWEA count, plus a growing number of foreign manufacturers distributing their products in the USA. Almost all do most of their business through local distributors and agents.
Good, useful directories of small wind turbine manufacturers and service providers are available on the Internet from Source Guides and Windustry, among others.
Once you’ve reached the point of choosing a small wind turbine and system, your decision essentially boils down to choosing between horizontal axis and vertical axis wind turbines. Most small wind systems sold in the market today are built around traditional horizontal axis small wind turbines. They produce more electricity from a given amount of wind, so if you’re looking to maximize electricity generation, a horizontal wind axis turbine is probably your best choice. Horizontal wind turbines won’t perform well in turbulent wind conditions, however. In addition, they require more open space, and they are noisier and heavier.
Besides being lighter, making less noise and requiring less space than their horizontal axis counterparts, vertical axis wind turbines offer the advantage of being able to generate electricity no matter which direction the wind is coming from. Some are even powered when the wind blows from bottom to top or vice-versa. Besides the advantage of generating power in variable wind conditions and from 360º, they typically perform better at lower heights. The SmallWindTips website is an excellent source of information for understanding and comparing small wind turbines, and the advantages and disadvantages of different turbine designs.
Evaluating and comparing the likely performance and reliability of small wind turbines can be confusing, if not frustrating. Competing claims about rated performance can be based on different test conditions, and manufacturers have changed the ratings numbers of their turbines with changes in the way financial incentives (such as the investment tax credit) are determined, so you’ll need to read the fine print and make sure you’re comparing apples to apples.
Again, a lot has been written on this topic. Renewable energy industry veteran Paul Gipe’s Wind-Works website is an excellent resource for anyone thinking of purchasing a small wind turbine system.
Fortunately, significant progress in clearing up the confusion has been made with the establishment of the Small Wind Certification Council (SWCC), which provides independent, standardized testing and certification programs. Manufacturers voluntarily submit their products for testing and certification. Doing so is worth their while, and you should check and ensure that the system you’re considering has been tested and is certified by the SWCC.
