Power play: Turbines have a payback cost of 10 to 20 years

Power play: Turbines have a payback cost of 10 to 20 years

Apr 26 - McClatchy-Tribune Regional News - Dave DeWitte The Gazette, Cedar Rapids, Iowa

Iowa's wind energy explosion has largely bypassed the small land owner, industry observers say, although that appears to be changing.

Interest in owning and operating wind turbines to power a farm, a home or a cabin is growing even though the financial payoffs of small wind generation typically aren't as good as large wind farms.

Demand for small wind systems for homes, farms and small businesses nationwide grew 15 percent in 2009, according to the American Wind Energy Association, adding 20 megawatts of generating capacity nationwide.

Seven projects that expanded small wind turbine manufacturing capacity were announced.

The association defines small wind turbines as those with a rated capacity of 100 kilowatts or less.

Heartland Energy Solutions of Mount Ayr expects to produce its first farm-sized 'Freedom' wind turbines next year in a factory that made wiring harnesses until the product line was moved to Mexico.

Company President Charles Sharp expects the turbines, which operate at lower wind speeds than more conventional turbines, to help keep family farms viable by reducing overhead for farmers.

'There's definitely a lot of interest,' Sharp said.

Gary Carleton helped start FreeWind, a Cedar Rapids company that sells and installs small wind turbines, last year after he was laid off from a closing industry in Cedar Rapids.

The company sells Southwest Windpower turbines that can offset electrical demand of about 1,000 kilowatt hours per month. That's 30 percent to 80 percent of the electricity used by a typical home, Carleton said.

The turbines have an installation cost of about $16,000 to $18,000, depending on variables, and carry a five-year guarantee. The company says its turbines pay for themselves in 10.6 to 20 years, depending on wind speed and grid power costs from the local utility.

'The interest has amazed me,' said Carleton, whose company has installed several turbines and has orders for about five more. 'I've had interest from every walk of life.' Wind turbine buyers fall mainly into two groups, hesaid. One group consists of farmers interested in lowering their operating costs. They are typically interested in fighting rising electric bills, Carleton said, and won't invest unless they can see a solid return on their investment.

Another group of buyers are concerned about their carbon footprint, Carleton said. They generally regard investing in renewable energy as an ethical decision and don't base their decision as much on the financial payback.

Iowa Renewable Energy Association President Mike Carberry said small wind investment in Iowa hasn't kept up with surrounding states because it lacks utility and state incentives.

'A lot of Iowans would like to plug into wind energy, but they are not able to do it because it's really expensive,' he said.

Carleton says a 30 percent federal tax credit on renewable energy helps some of his customers. Businesses can write off depreciation on the investment on their taxes. One client successfully obtained a $25,000 U.S. Department of Agriculture grant to buy turbines, but the grants are not for everybody, he said. The grant application was a time-consuming affair and hiring a professional grant writer can easily cost $1,500 with no guarantee of a successful outcome, he said.

Even though FreeWind has identified some banks willing to finance wind turbine investments, most clients so far have paid cash.

Wind industry veteran Rob Hach of Alta tests wind resources for wind farm developers and installs towers. His main company is Anemometry Specialists. It has a division that installs small wind and solar power systems called Wind and Solar Specialists.

Hach said the economics of small wind installations are not as good as large wind farms. Because small landowners often don't have extensive wind power knowledge or use consultants, they have often gotten bad installations thatfailed within the first year or two. Others didn't provide the return expected, he said.

Hach agrees that turbines have become more reliable.

Still, he recommends that property owners who want their own wind power make sure they get a turbine with a multiyear guarantee and deal with a company with an established track record.

Supporters say small wind turbines are an example of 'distributed generation,' a concept with advantages for local economies. The Iowa Policy Projects says owners of small generators keep money from flowing out of local communities, reduce congestion on the transmission grid and help educate Iowans about renewable energy.

Heartland Energy Solutions is trying to promote a hybrid ownership system that would keep money in the community and make investments safer for landowners.

Sharp says the concept brings together a farmer, outside investors and thelandowner's electric utility. It provides for an upfront agreement with the local utility to buy a specific share or amount of the electricity, much like the agreements the utilities use to buy wholesale power from other sources.

Heartland Energy Solutions plans to install 10 turbines near its plant under an agreement with its rural electric cooperative to demonstrate the concept and test its turbines, Sharp said.

One of the most promising areas for small wind installations are public schools, according to the Iowa Policy Project. The group says at least 10 public schools in Iowa have installed wind turbines, and they are helping struggling rural districts to survive hard financial times.

Wind projects are usually described in the rated capacity of the installed turbines. Most wind farms generate 20 percent to 40 percent of the rated capacity.

– Comments: (319) 398-8317; david.dewitte@gazcomm.com