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Does Wind Energy Pay For Itself? (A Look At Wind Energy ROI)

Does Wind Energy Pay For Itself? (A Look At Wind Energy ROI)

When the topic of wind energy came up in a recent conversation, I was interested to learn what the real costs are to invest in something like this. So, I did some research to find out the return on investment and cost-effectiveness of wind turbines. 

Does wind energy pay for itself?  Depending on the size and capacity, some turbines are able to pay for themselves within a period of 10-15 years. The average wind turbine can offer a net benefit to its owner in as little as 5 months from the time of installation. Although this time frame can vary slightly in each situation, most people will begin to generate profit within less than one year of purchase.

Many people are interested in getting into the wind energy business due to its low cost and high potential for profitability while others are interested in home wind turbines. For the purposes of this article I’m going to discuss more about industrial-scale wind energy. There is also a very short waiting period from the time of purchase for each wind turbine to produce positive cash flow in comparison to other business ventures. The rapidly growing industry of wind energy is beneficial to investors and consumers in more ways than you would think. 

Related: How Much Money Does A Wind Turbine Make In A Year?

The Cost-Efficiency of Wind Energy

First of all, wind energy is a significantly lower priced alternative in comparison to more traditional sources of energy.  It is usually sold and purchased through something called a Power Purchase Agreement (PPA), where the buyer acquires a bulk amount of energy at once to be spread out through a certain amount of time as specified in the contract. 

This is beneficial to both parties because costs and profits are stable and foreseeable. In other words, the buyer will know exactly what to expect as far as price and the provider will generate a steady stream of income. Wind energy is estimated to cost about 5 to 8 cents per kilowatt-hour, which is a few cents lower than the average price of power plant energy. 

Wind energy allows people to save more money than they would with traditional electricity in many ways. Wind is a renewable energy source that replenishes itself, meaning that there is an infinite supply that will not run out like other sources would such as coal or fossil fuel. As a result, there is no additional cost to connect utility power lines to your wind turbine during installation because there is no need for them. Since most wind energy is purchased through PPAs that create a consistent payment schedule, there are no additional fees or fluctuations in price that can come out of nowhere and put a dent in your pockets. 

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1. Tycon Systems TPW-400DT-12-24 1244; 24V Horizontal Wind Turbine
2. Wind Turbine Generator, 12V 400W Portable Vertical Helix Wind Power Turbine Generator Kit with Charge Controller
3. 1000W Solar & Wind Power Kits Home Off-Grid System for Charging 12V Battery:400W Wind Turbine Generator + 600W Mono Solar Panel + Hybrid Charge Controller+ 1000W 12V Inverter+Accessory
4. Renogy 4800 Watt 48V Monocrystalline Kit Off Grid System 15pcs 320W Solar Panel with Midnite Classic MPPT Charger Controller

The Cost of a Wind Turbine Investment

The average cost of a wind turbine can be anywhere from $1,000,000 to upwards of $4,500,000 depending on the kilowatt-hours it can supply within the time frame of one year. This estimated price range includes the cost of purchase as well as delivery and installation, which will vary between the different types of wind turbines. A higher capacity of kilowatts will result in a higher price, whereas a smaller wind turbine will be on the lower end of the spectrum. The cost of wind energy for buyers can vary from a few thousand up to $10,000 per year as outlined in their contract. 

Before making the decision to invest in wind energy, there are a few factors to be considered that will influence what type of wind turbine you should purchase to suit your needs. First and foremost, each wind turbine will hold a different amount of kilowatt-hours (kWh). Depending on what the energy will be used for, you should purchase a wind turbine that will provide enough kilowatts in correspondence with the demand. For example, you will need at least 5 kilowatts to provide power to an entire home for one year, and this number could go up to 10 or even 15 kilowatts for each individual case. It is important to know the exact type of wind turbine you will need before proceeding with your purchase. 

In general, the wind turbines with the least amount of kilowatt levels will be priced on the lower end of the spectrum and the cost of turbines with higher kilowatts will increase accordingly. An additional factor that can lower the cost of your wind turbine is the installation of guy wires. These are tight cables that are used to keep the structure in place where it stands. On average, towers that are attached to guy wires are less expensive than the completely free-standing ones. 

Since wind farms require a very minimal amount of space to operate on, it is relatively easy for these types of businesses to establish revenue. The lower upfront cost for the small area of land combined with the quick return on investment for each wind turbine will boost profits for the months to come. On top of that, the time it takes to build a wind farm is very minimal as well. 

The average construction time is about six months or less until it is up and running. Each individual wind turbine can make anywhere from $3,000 to $8,000 per year, depending on size, capacity, and various other specifications. On the other hand, entire wind farms with several wind turbines in one area of land are especially profitable. When more than one turbine comes into play, the amount generated for one will be multiplied and can end up turning a very substantial yearly profit for the owner.

Why You Might Want To Invest In Wind Energy 

Each wind turbine has a life cycle of approximately 20 years and can begin paying for themselves within an average period of 15 years, although this time frame can be shorter or longer depending on the circumstances. If a 10-kilowatt wind turbine pays for itself in 15 years, then its owner will be able to enjoy pure profit for the remaining 5 to 10 years of operation. Turbines with larger energy capacities, however, can take up to 40 years to pay back their owner, which will exceed the life expectancy.

Although wind turbines require a larger sum of money up front to purchase and set up than you might feel comfortable with, you will eventually see a fixed flow of positive income for the rest of their lifetimes. Within the past several years, wind Energy has become one of the fastest growing industries in America. With more wind turbines being installed and wind farms opening up for business, there is an increasing demand for workers to operate and maintain the machines. According to a study in 2016, wind turbine service technician jobs were found to be growing by 96 percent and are expected to continue at this rate until the year 2026.

Wind energy can be a smart investment that ends up paying for itself in about half of its lifetime. For those who have the patience and financial freedom to watch their profits grow after putting their money forward, it can turn out to be a very rewarding purchase in the long run. 

Related Questions

Is Wind Energy Really a Better Alternative to Power Plant Energy?

Wind energy has both financial and environmental benefits. Without the need for any chemicals or destructive materials, it is a natural source of energy that will never run out or become depleted. This is great for investors because the earth will fuel the wind turbines around the clock with little maintenance and no need to purchase additional supplies to keep them going. In comparison to other energy sources that let out emissions into the environment, the wind is a clean and natural source that does not release harmful toxins into the atmosphere. These toxins can give off sickness or even death to the people who are constantly exposed to them. Wind energy also helps to cut down on unnecessary air pollution and emission of carbon dioxide that comes with alternate energy sources that are damaging to all sources of life around it.  

How Much Energy Do Wind Turbines Really Produce?

It is a common misconception that wind energy is unreliable and will only work for a fraction of the amount of time that it is expected to. However, these averages have been significantly improved in modern-day wind farms. In fact, it has been shown that the average wind turbine will be actively producing energy approximately 80 percent of the time each year. These statistics are impressive considering the myth that wind turbines are only active and producing usable energy for about 30 percent of the time. Depending on its kilowatt capacity, each turbine can provide enough energy for anything from one household to over a thousand of them at one time. 

Learn More

If you’re serious about learning more about wind energy, I recommend the Wind Energy Handbook on Amazon. This book is great for both students and professionals, and it holds invaluable information on the subject of wind power.