Frequently Asked Questions
Wind is a relatively new technology. As such, a variety of questions currently exist. The following information is presented to help readers understand today’s wind energy industry.
WHAT IS Wind for Industry®?
One Energy defines Wind for Industry® as a wind energy project designed to achieve a significant reduction of an industrial facility’s electrical consumption from the grid. These projects involve installing one or more utility-scale wind turbines and interconnecting them on the facility’s side of their electricity meter.
WHAT IS NET METERING?
Net metering is a series of state laws that provide, for a given customer with a given generator (usually a clean energy generator), that the utility company can only bill based on the NET electricity consumed at the end of the billing period. This means that it does not matter when you use the energy or when you produce it, because you are only billed on the net difference. In some cases, utilities are required to pay for net excess generation. Laws vary widely throughout the country.
WHAT IS THE DIFFERENCE BETWEEN A kW AND A kWh?
A kW is a kilowatt and a kWh is a kilowatt hour. Both are terms that are common in evaluations, wind, power bills, and sales jargon. Both are misused quite often. A kilowatt is a unit of power, whereas a kilowatt hour is a unit of energy. For a practical example, consider a 100 watt light bulb. Now consider ten 100 watt light bulbs (10 * 100 = 1,000 watts = 1 kilowatt). Ten light bulbs consume 1 kilowatt of energy.
The problem is that there is a very big difference between turning those lights on for one minute and leaving them on for a week. To measure this difference we use power, which measures the energy used over a period of time. If you leave the ten bulbs on for one hour you have consumed one kilowatt for one hour, or one kilowatt hour. The kilowatt hour (kWh) is the most common way that utility bills are calculated because it takes into account the total energy consumed. That being said, some utilities also bill in part based on your peak demand, which is your peak energy usage during the month. Peak demand is measured in kilowatts.
HOW MUCH DOES A WIND TURBINE COST?
Generally, the utility-scale turbines in the larger megawatt class (1,000 kW+) cost $3.5 million installed, +/- 10% depending on the site.
WHAT INCENTIVES ARE AVAILABLE?
Two areas of potential incentives are available for companies: the Energy Investment Tax Credit (ITC) and the Modified Accelerated Cost-Recovery System (MACRS). Many factors affect a company’s ability to utilize these incentives. These factors are covered in One Energy’s Initial Site Evaluation, which will provide a clear financial picture of a potential wind project.
WHAT ARE THE HIDDEN COSTS?
Typically the following costs need to be factored into a purchase: equipment purchase, delivery, electrical equipment, foundation installation, electrical installation, turbine installation, grant writing, permitting, engineering, interconnection costs, warranty, maintenance, and insurance. One Energy only quotes complete prices, which include all of the above except insurance (which we help you obtain).
WHAT IS ROI AND HOW DO I CALCULATE IT?
ROI stands for return on investment, and it is as far from standardized as can be. Every individual, banker, and company has a slightly different procedure for calculating ROI and that is fine, so long as they are clear on how they calculated it.
Entire books are written on this topic, but the most important thing to remember is to make sure you know what numbers were used in the calculations and what numbers were not. Some companies want to see depreciation included, some do not; just make sure you know what was used. Generally there are three numbers that are good tools for evaluating the overall return on investment: Simple Return, Net Present Value (NPV), and Internal Rate of Return (IRR).
- Simple Return is how many years it will take to break even (initial cost, divided by annual value). RESULT IS IN YEARS.
- Net Present Value is the value that you would have to have in your bank today to invest, at a given rate to equal the return that you would get. This number can vary widely based on what rate you use for time value of money (what else you could be doing with it). Always make sure you know what rate was used in your calculations and how it was chosen. RESULT IS A DOLLAR VALUE.
- Internal Rate of Return is the equivalent rate at which you would have to invest your money to equal the same return. RESULT IS A PERCENTAGE.
HOW CAN I TELL HOW MUCH WIND I HAVE?
In general, the easiest way to get a rough idea of the wind that you have at your site is to use a wind map published by the National Renewable Energy Lab. These maps provide fairly accurate 80 meter wind speeds. Remember that all speeds are based on annual averages. These maps, however, are just a guide and can be inaccurate. To find a revenue-grade answer, a qualified firm will perform a site-specific analysis. They will evaluate the obstructions at your site, examine the topography, and will use more detailed wind maps to provide a much more accurate number. If you are looking at a small turbine for your residence, accuracy is not a large concern. If you are considering a utility-scale turbine for your business, then you need accuracy that is proportional to the investment. One Energy uses proprietary tools to complete our revenue-grade wind assessments in-house. Our assessments are auditable, and are held to the same standards as the largest wind projects in the world. An accurate wind assessment is one of the most important factors in a project, as it is often one of the risks that cannot be mitigated.
WHAT PLANNING AND ZONING REQUIREMENTS ARE THERE?
Requirements vary widely by locality, region, zoning district, and state. To investigate what your local requirements are, talk to your local Planning and Zoning Administrator. One Energy will handle all planning and zoning requirements for your project.
HOW DO YOU CALCULATE HOW MUCH ENERGY A WIND TURBINE WILL PRODUCE?
Calculating potential energy production is much more complicated than simply multiplying the average wind speed by the rated power output of a turbine over the course of a year.
A wind turbine has a power curve that varies with wind speed. Wind can be modeled using what is called a Weibull Distribution Curve (similar to a normal distribution curve, without negative numbers). When a wind resource is modeled using the correct Weibull curve, each individual element of that curve must be multiplied by the corresponding element on the power curve. In short, this is not a simple calculation. The calculations should be shown to you, and whoever provides it to you must be able to explain it. For Wind for Industry® projects, we also include inflow angle, turbulence, air density, and a host of other complicated factors that need to be considered to properly model the turbine’s expected production.
WHAT IS THE INFLATION RATE OF ELECTRICITY PRICES?
We do not know. We can quote historical numbers, but they are just that, history. All of our calculations at One Energy are completed assuming ZERO inflation in electricity rates. While it is likely that prices will increase, we cannot tell you by how much. Make sure that when you look at an ROI calculation, from One Energy or other potential partners, you know what inflation rate was used and why. A few percentage points can change the results by thousands or even millions of dollars.
WHAT ABOUT TURBINES THAT MOUNT TO ROOFTOPS?
The power contained in the wind is proportional to the cube of the speed of that wind. In other words, if you double the wind speed, you can get eight times the power. If you mount the turbine on your roof top at 30 feet high, it will get 20-30% less wind speed than the same turbine at 100 feet, and it will get HALF of the power due to the reduced speed. In most cases, rooftop wind turbines have lost before they even begin. In theory, a wind turbine can remove 59% of the energy from the air, and some wind turbines have already shown in practice to remove above 50%. There is a reason utility companies put their turbines on tall towers and use a three-blade design. Utility-scale wind turbines capture more than an acre of air each. If you want those kinds of results, you need that kind of scale.
WHICH TURBINE MANUFACTURERS DOES ONE ENERGY WORK WITH?
Only the best. No one turbine or one manufacturer is right for everyone. Each product and provider has its pros and cons. Based on your goals, One Energy will help you select the best turbine for your project. One Energy utilizes relationships from our previous large utility wind farm projects to negotiate the best price for your project.
20 Questions to Ask When Choosing a Wind Turbine Contractor
There are many companies in today’s marketplace offering a range of wind energy services. The questions below address key issues related to a utility-scale on-site generation wind project.
When selecting a partner for your project, it is paramount that your organization ask the following questions:
- Will you show us a copy of your safety plan?
- Will you show us a copy of your quality plan?
- How many wind turbines has your team installed? What size turbines has your team installed? How many total megawatts has your team installed?
- What crane and rigging experience does your team have? How many crane picks above 100,000 pounds has your team constructed?
- What training will the lead person installing the turbine at my site have?
- What varieties of turbines (both manufacturer and size) does your company install? How do you decide which turbine is best for my project?
- Who on your construction team is trained in tower rescue? What rescue equipment will your construction team have on site?
- Will you explain how a wind turbine generates electricity and delivers it to the grid?
- Who handles grants, state filings, FERC, PILOT, and EIA filings?
- Who is responsible for securing local construction permits and attending local community meetings?
- Other than signing completed paperwork, what exactly do I need to do in order to get a wind turbine installed?
- What kinds of power quality problems could result from a wind turbine?
- Where can I obtain insurance for my turbine and how can your company help me?
- What is the average inflation rate of electricity in my area? What inflation rate number did your team use in your calculations? What REC value did your team use in your calculations? How can I audit your team’s raw financial calculations?
- How does our corporate tax rate affect the return on investment for a wind turbine?
- Do you have errors and omissions insurance, not just general liability insurance?
- Will you explain net present value and internal rate of return? Can you explain how they can determine which wind turbine to install?
- Will you explain how to model wind speeds at different heights and how to use the Prandtl and Power Law Models?
- What is Net Metering and why does it matter to me?
- Will you provide resumes for your project team? Will you provide information about your company and any engineering and/or construction firms that will be involved in the design, evaluation, and construction of my project?
Download a printable 20 Questions for Potential Contractors PDF