Once a year, seems like I look at renewable energy sources and then I am disappointed because the up front cost never justifies the long term savings if one just looks at it from an economic point of view.
However, this year, with the new 'stimulus', I mean 'spending' bill, it appears that there are economic incentives that might finally tip the scales in favor of acting on the purchase of some sort of system.
The tax details are still not clear to me, but it seems that there is now an unlimited 30% tax credit for rural qualifying renewable energy investment (maybe urban also, but I will explain in a moment). In addition, one would get to deduct the cost of the equipment over time - what period of time I do not know.
This ad has some discussion of the current tax law:
Qualified Small Wind: Skystream 3.7 eligible for US tax credits
So, let's look at an example - suppose you spend $16,000 on a 4KW system. Your tax credit would be $4,800 - lowering the immediate cost of the system to $11,200. Now, in addition, you can deduct the entire cost of the system as it relates to your business (your farm, etc.).
Let's say you are in the 25% tax level and you deduct it over 5 years (possibly earlier by accellerated depreciation). Then that is $3200 deduction per year, saving you $800 real dollars per year x 5 years.
Thus, over 5 years, you will initially pay $11,200, then get back another $4,000.
Now, let's say that your turbine really generates only 30% of the max power on the average. At $0.12hat is $1,261 in electricity saved or refunded per year, for a total of $6,307 over 5 years.
Thus you now have been refunded $10,307 of your remaining $11, 200 over 5 years!
And I am only looking at 5 years. In another year, you will have paid off the entire thing in terms of cumulative savings. Of course I am not looking at the time value of your money up front. Of course, you might have had that money in the stock market and then you would have lost half of it and still not have a wind turbine.
They are saying that the life of the larger turbines is 20 yrs and even then you still have the infrastructure (tower, wiring, inverters) in place.
Now, if that makes sense, take it one step further. A 4KW turbine costs about $4 per watt to install to the point of being ready to use. Not much better than solar. But if you look at larger units, you can approach $2 per watt if you bump up to 20KW turbines. Then you have to start looking at the whole thing as an investment.
That's a lot of money, but you recoup it after exactly 3 years at $2/watt plus now you have the turbine for electricity and future profit.
I recently viewed a 4KW system on a 60 ft monopole and I was impressed at how quiet and unobtrusive it was. It didn't seem as tall as I was expecting and with a 20 mph wind there was more noise from the wind than the turbine. I think a 20KW system would go on a 80 to 100 ft pole.
However, this year, with the new 'stimulus', I mean 'spending' bill, it appears that there are economic incentives that might finally tip the scales in favor of acting on the purchase of some sort of system.
The tax details are still not clear to me, but it seems that there is now an unlimited 30% tax credit for rural qualifying renewable energy investment (maybe urban also, but I will explain in a moment). In addition, one would get to deduct the cost of the equipment over time - what period of time I do not know.
This ad has some discussion of the current tax law:
Qualified Small Wind: Skystream 3.7 eligible for US tax credits
So, let's look at an example - suppose you spend $16,000 on a 4KW system. Your tax credit would be $4,800 - lowering the immediate cost of the system to $11,200. Now, in addition, you can deduct the entire cost of the system as it relates to your business (your farm, etc.).
Let's say you are in the 25% tax level and you deduct it over 5 years (possibly earlier by accellerated depreciation). Then that is $3200 deduction per year, saving you $800 real dollars per year x 5 years.
Thus, over 5 years, you will initially pay $11,200, then get back another $4,000.
Now, let's say that your turbine really generates only 30% of the max power on the average. At $0.12hat is $1,261 in electricity saved or refunded per year, for a total of $6,307 over 5 years.
Thus you now have been refunded $10,307 of your remaining $11, 200 over 5 years!
And I am only looking at 5 years. In another year, you will have paid off the entire thing in terms of cumulative savings. Of course I am not looking at the time value of your money up front. Of course, you might have had that money in the stock market and then you would have lost half of it and still not have a wind turbine.
They are saying that the life of the larger turbines is 20 yrs and even then you still have the infrastructure (tower, wiring, inverters) in place.
Now, if that makes sense, take it one step further. A 4KW turbine costs about $4 per watt to install to the point of being ready to use. Not much better than solar. But if you look at larger units, you can approach $2 per watt if you bump up to 20KW turbines. Then you have to start looking at the whole thing as an investment.
That's a lot of money, but you recoup it after exactly 3 years at $2/watt plus now you have the turbine for electricity and future profit.
I recently viewed a 4KW system on a 60 ft monopole and I was impressed at how quiet and unobtrusive it was. It didn't seem as tall as I was expecting and with a 20 mph wind there was more noise from the wind than the turbine. I think a 20KW system would go on a 80 to 100 ft pole.
