One can’t help but notice the increasing amount of wind-generation farms that are being installed throughout Oregon, Washington and the U.S. At first glance, wind energy seems like a great idea with many people looking to jump on the bandwagon. It provides clean renewable energy and helps stabilize energy costs and our nation’s dependence on foreign fuel sources. However, it is not as simple as it may seem and careful feasibility and due diligence analysis must be made to determine if wind energy is right for you and your land.
There are three categories of systems that are available:
1. Small Scale – for your own residential or commercial (office or farm) facility. These are small wind generation towers. These help to offset the individual owner’s utility costs.
Some of these systems allow the owner to be hooked up to the power grid, wherein any extra power the owner currently generates is fed directly to the grid. Later when the owner needs power, they can take back from the grid at no-cost and use the credit on the power they previously supplied to the grid. This system is known as net metering. The owners power meter will actually track in both positive and negative directions. Of course the owner doesn’t have to be connected to the grid and thus their power generation would be used at that moment in time unless additional equipment, like batteries, are installed to capture that generation – the stand alone system.
These smaller systems cost anywhere from $10,000 to $80,000 installed. They generally produce around 10 kilowatts (kW) to 25 kW in generating capacity, and can be up and running in about a year.
2.Community Program – group of landowners come together to install mid-sized wind generation towers and the power created is spread amongst the group.
3. Large Scale and Utility Scale – wind farms that generate power to sell to distributors like PGE, Pacific Power, and Idaho Power for a profit. These are the systems that usually produce 10 megawatts (“MWâ€) or more. The cost is anywhere from $800,000 to $1,200,000 per turbine, in a multiple turbine system, and can be up and running in about five years, from first idea to completed construction.
Leasing the wind rights on your land to a developer is a viable option if you are not interested in going through the development process, and can provide you as the landowner with $3,000 to $4,000 per year for one 1.4 MW turbine, using .5 acre footprint that is spread over 50-75 acres of land. Of course profit will be based on the amount of wind produced by that turbine, thus you want to make sure you have “windy land.â€
The level of due diligence required to determine cost/benefits and feasibility will change depending on which system you are interested in. The key things to remember and look at when assessing any of these systems are: goals including leasing versus developing, wind resources, amount of available land, energy needs or interconnection to the power grid, permitting through local and state governments, capital contributions available and amount of risk you are willing to assume, government grants and incentives and tax incentives and consequences. There are different ways to structure these projects to make it worth the investment and minimize risks, but like property, each project is unique. It is important to spend the time and money up-front in researching the opportunities and feasibility of any new business opportunity.
While the costs may ward off many potential developer candidates in prime site locations, there are several grants available for all systems including financing for the feasibility study. There are also several different incentive programs available for project costs, taxes and production. The range of these programs is great and should be considered specific to the proposed system. With these grants and incentives, it can turn an $80,000 project into $10,000 project with a positive return on investment. Thus with careful time and consideration spent up front, a landowner or company could turn this clean renewable energy resource into a profitable venture.
