What is the financial payback period for such an investment?

Under current circumstances economic payback for a micro-scale wind turbine - a long term investment - may not be achieved for more than ten years. The

• Capital outlay
• Demand for electricity and the timing of the demand
• Load factor
• Maintenance costs
• Average wind speeds
• Turbine performance
• Cost of alternative sources of power
• Life-time of the turbine and associated equipment
• Value placed by prospective buyer on Building Energy Rating
• Payment or credit for excess electricity exported.

Capital Outlay

Quality turbines of any scale are not cheap. A good quality 5kW - 6kW turbine can cost over €25,000 to purchase, install and connect. A well maintained good quality 6kW unit in an excellent site will produce around 13,000 units of electricity per annum. Depending on the proportion of this power which is consumed onsite, exported for 9-19c/kWh or exported for free it has a value from anywhere between €1300 and €2400 to a domestic customer of ESB Customer Supply.

13,000 kWh would have the value of around €2400 if all of the units produced were consumed onsite and the site was supplied by ESB CS with the 24-hour rate (rather than the night-saver). However a typical house in Ireland might consume around 5,500 units of electricity per annum and not 13,000. The electricity generated would have the value of €1760 if the turbine matched demand for 3,000 kWh of a typical houses demand (at 18.6c/kWh per unit) and exported the balance (3,000 kWh at 19c/kWh and 7,000 kWh at 9c/kWh). The house would then still have to import 2,500 kWh at 18.6c/kWh (or €465 worth of electricity).

Demand for power and the timing of demand

Clearly the proportion of power consumed/exported/imported can vary widely from premises to premises. Customers could monitor their own energy use for a period of months to get an idea of the timing of their demand. A variety of DIY energy monitors are available and the data collected can be uploaded to a computer for analysis.

Well sited consumers who remain high demand customers after employing all appropriate energy efficiency measures may be best placed to benefit most from the addition of microgeneration. Wind microgeneration is suitable to sites where there is a constant 'base-load' demand for electricity. That is where demand rarely drops below a certain level, even at 5 a.m. If a turbine is installed it can displace imported power required to meet the base-load demand. It should however be remembered that 'night-saver' or other economy tariffs are available and these should be included as appropriate when analysing the economics of the site.

Load factor

Every demand customer has a 'load factor. In electrical terms a load factor can be expressed as the ratio of the maximum electrical demand versus the average demand over the same period (peak v. average). A rugby club with floodlights may have a very small demand for 95% of the week. For a few hours every week during 6 months of the year the demand reaches its peak when floodlights are turned on for training. Installing a wind turbine on a site such as this is far from ideal from a demand and cost reduction point of view unless an appropriate export tariff can be availed of.

Maintenance costs

Maintenance costs and contracts should be discussed with a number of prospective suppliers. A routine maintenance schedule should be supplied by the manufacturer as well as estimates for future costs of major parts. The schedule should be sufficient to ensure long and productive operation under local conditions. Some turbines require more maintenance than the manufacturer recommends while others may survive with less. As is the case with all machinery, the more frequent the maintenance and care the longer the turbine is likely to be of use. The ultimate aim is to reach beyond the break-even point. A turbine system which does not reach a break-even point has in effect produced power during its lifetime that has been more expensive than would have otherwise been available from the grid.

Maintenance costs usually include a call out charge as well as costs to cover access to the turbine for greasing and other light maintenance. After a period of years parts such as blades or brushes may need to be replaced. Estimates for the lifespan of such parts and the cost of such non-routine maintenance should be provided by the supplier or manufacturer. Again local conditions, turbulent air flow or storm damage may require replacement of parts outside of any schedule.

The more mechanically and electronically complex the turbine is the more elements there are that can go wrong, therefore the more maintenance which may be required. Simplicity should be a factor in choosing a turbine.

Average wind speeds

The output of a wind turbine is dependent on the energy in the air flowing over the blades and through their swept area. Power output for a given turbine is proportional to the cube of the wind speed i.e. if the wind speed doubles the power output increases by a factor of 8. Another way to look at it is that a doubling of the power output can be achieved by an increase in the wind speed of just 25%. So it is clear that the power output and its value can vary substantially from site to site. Average wind speeds are more important than the occasional high wind speeds which might be available at a site.

Turbine performance

Manufacturers and suppliers should supply all of the technical specifications and expected performance figures for the turbine and system. Each turbine has a power curve which will give an indication of the turbines output at different wind speeds. A power curve which an accredited third party test or independent test facility has developed is more reliable than a manufacturer supplied one. Customers should always check the accreditation of test facilities providing certification. A power curve will show information such as cut-in wind speed, peak power, rated power, rated wind speed and cut-out wind speed.
A low cut-in wind speed is desirable to capture as much available energy as possible. At cut-in the turbine will produce little power but it is better to be producing something rather than nothing. Before cut-in turbines may be rotating but the generator is not producing any power. A typical cut-in wind speed for small turbines is 3m/s.

Peak power is the maximum the turbine will produce in infrequent circumstances such as exceptionally high winds or momentary gusts. Over-speed controls should prevent too much power being conducted through the electronics but peak power could cause damage if the turbine is not designed or prepared to respond quickly or if the mechanism fails. The electronic controller and inverter are designed to cope with currents and voltages within a range and a momentary breach of upper limits will damage or burn out components, if not the entire unit. The inverter must be sized appropriately to cope with peak power production.

The key performance indicator for a wind turbine is the amount of energy it produces over its lifetime and not the rated power/nameplate rating.

Cost of alternative sources of power

The power produced will replace imported electricity at the retail rate available at the moment it is produced. At present domestic customers generally have access to just two types of tariffs. One account has a flat tariff throughout the day and night. The other option is a day/night tariff with the meter differentiating between units consumed at night and during the day (ESB's 'Nightsaver' product for example). The day-time tariff in the day/night option is slightly more (6.8% more) than the standard 24 hour tariff but the night-time tariff is significantly less (47% less). The day/night tariff option is suited to homes with electrical storage heating.

Commercial and residential commercial customers have a range of tariff suites available from a choice of suppliers. Anyone, commercial or domestic customers, considering their tariff options need to consider carefully their consumption patterns and factor in extra standing charges applicable for the required metering. There is also a charge for the required meter.

Some microgeneration sites may chose to use the power produced onsite to heat water, be it for washing or for space heating -direct water heating. In this case the fuel cost comparison is carried out against available heat fuel sources such as oil, natural gas and biomass boilers or stoves. For situations where just the excess electricity is used to heat water it is just that portion which is compared to other heat sources with the remainder compared to electricity imports as before.

Life-time of the turbine and associated equipment

By definition a turbine that lasts beyond its break even point or payback period has paid for itself. It is also clear that a turbine that only lasts a small few years is a wasted investment. Turbines need maintenance and it is in the interest of the owner to keep the turbine generating for as long and as efficiently as possible to get to a point where the turbine has paid for itself and it is producing clean energy at a cost less than the retail price of electricity.

Value placed by prospective buyer on Building Energy Rating

Adding microgeneration to a property will improve its rating under the Building Energy Rating (BER) requirements. The output from electricity producing photo-voltaic (PV) panels will be estimated as per a prescribed formula. For wind turbines there must be at least one year's output data before it can be factored into the buildings performance. This is to account for a wide variation in performance of turbines- from good sites to poor sites and from maintained turbines to defective ones.

Prospective buyers, leasers of a premises or tenants will place a value on the energy rating of a building. Running costs can be a key consideration when valuing, purchasing or renting a new property.

Payment or credit for excess electricity

Payment by electricity suppliers willing to buy excess electricity will reduce the payback period and improve the viability of the technology. With a payment of between 9c and 19c/kWh being offered by some of the ESB Group every unit of electricity produced has a value and units will no longer be exported to the grid for free.

To give a simplified example: A house in an excellent site for availing of wind has a 3kW turbine installed. The turbine produces around 6,300 units of electricity (kWh). The house has an annual demand of 5,000 kWh but the turbine only matches this demand for 40% of the time i.e. 2,000 kWh of the house demand comes from the turbine. The remaining 3,000 kWh comes from the grid.

If no export tariff was available the turbine output would have the value of €372 (retail price of electricity (e.g. 18.6c) x 2,000) as the amount exported (4,300 kWh) would have no value. With payment for export available to domestic customers each of the 4,300 units now has a value. The first 3,000 kWh has a value of 19c/kWh (equal to €570) and the remaining 1,300 kWh has a value of 9c/kWh (equal to €117). Thus the payback period is reduced by earning €687 from exports annually. This export payment is on top of the payback accruing from displaced imports (the 2,000 kWh mentioned above).