Ask SAM: Energy blowing in the wind

This column is provided by Larimer County Extension's Small Acreage Management (SAM) Program to assist rural residents.

Dear SAM,

I'm thinking about installing a windmill to generate electricity. I plan to sell excess electricity back to the grid. Do you think I'll make any money?

George

Dear George,

The Colorado Department of Agriculture (CDA) recently funded a "Wind Feasibility Report for Colorado Livestock Operations." The study looked at the economics of installing and operating wind turbines ranging from small-scale (1.9 kW) to commercial (1.65 MW). The study locations were on the eastern plains, but the results may be relevant to Larimer County.

The first thing you need is wind. Not just some annoying blustery days, but steady and reliable winds from a consistent direction. A map of average wind speeds for Colorado, developed by the Department of Energy National Renewable Energy Lab, can be found by searching for "Colorado wind map" on the Internet. Average wind speeds of 13 mph to 15 mph (Class 2 Winds) are recommended for wind energy development. Wind resources in Larimer County tend to improve to the north and on the tops of hills.

While the idea of installing a large turbine and selling unused electricity to the grid may sound enticing, look at the economics before jumping in. The CDA study found that in most cases, the best approach is to match the size of the turbine to your own electricity needs. The additional cost of a larger turbine is usually not recovered by selling excess energy to a local utility.

A small Skystream 1.9 kW turbine costs about $15,000 installed. If you pay cash for the turbine and have good wind, it could pay for itself in about 12 years. If you take a loan for 70 percent of the cost, the payback time increases to 17 years. Work with a wind turbine dealer to develop more precise estimates for your own situation.

As turbines get bigger and more expensive, payback times tend to increase. This trend reverses with the large turbines used in commercial wind farms. But a 1.65 MW commercial-scale turbine costs about $3.6 million. So unless you are going into the wind energy business on a large scale, think small.

While investing in a wind turbine with the intent of selling excess electricity might not make sense at today's prices, changes in the cost of electricity or turbines could change the analysis. Grant programs and tax credits may also impact your decision.

For more information about wind or solar generators and selling energy back to the grid, contact Pat Plank at Poudre Valley REA, 226-1234.

SAM

Have a question about rural living? Write to Ask SAM, Larimer County Cooperative Extension, 1525 Blue Spruce Drive, Fort Collins, CO 80524 or e-mail emarx@larimer.org.