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Small-Scale Wind Hopes to Follow Solar’s Footsteps

United Wind raises $200 million to expand a lease program for small wind generators, hoping to copy solar’s path to success

A New York-based firm hopes that small wind projects can be a competitor to the grid in rural communities. The company wants to expand a leasing program for small wind turbines.

United Wind is hoping to do for small-scale wind what third-party installers already have done for solar.

The Brooklyn, New York, company has raised $200 million in equity funding that will allow it to expand into markets beyond New York, offering rural customers 20-year leases on wind turbines rated at 100 kilowatts or less. That kind of output may be tiny in comparison with the megawatt-sized turbines in utility-sized wind farms, but it’s enough to provide a competitive alternative to grid electricity, according to an article posted at Greentech Media.

Leased wind turbines often lower monthly electric bills by about 20% over the life of the lease, Greentech Media said.

The business model has been a huge success for solar installers such as SolarCity, extending the reach of distributed solar far beyond what it would have been with homeowner-owned systems alone. Homeowners get up and running with little or no upfront costs.

Sticking to rural markets

United Wind customers are people like Ed, Kevin, and Rich Doody, dairy farmers in central New York who installed turbines not only at their dairy barn but also at their own houses and saw electricity bills drop essentially to zero, according to an article in The New York Times.

Because the turbines are relatively small, they don’t generate the kind of opposition that utility-scale wind farms with turbines hundreds of feet high often do.

So far, United Wind’s customer base has been mostly in central and western New York, but the new funding will allow the firm to push into the Midwest and finance an additional 1,000 projects.

“The small-wind market was small — it hadn’t really taken off the way solar had,” Russell Tencer, United’s chief executive, who founded the site-assessment company, Wind Analytics, in 2009, told The Times. “What we realized was that with that intelligence and software we could offer that same type of one-stop-shop solution that solar has packaged to finance solar.”

According to the Greentech Media report, United estimates the U.S. market for distributed wind energy is $25 billion.

In the three years since United Wind was launched, the cost of a 10 kW project has dropped from $10 to $6 per watt; the average cost of a 50 kW system is closer to $3 per watt.

Greentech Media says United Wind has more than 150 signed leases in New York and Colorado, and has just opened an office in Kansas.

3 Comments

  1. Brent Eubanks | | #1

    small scale wind != solar PV
    The analogy to the growth rate of solar PV is appealing and I'm sure it play well with investors. But actually making that analogy work is going to be somewhere between hard and impossible, because the two technologies are NOT analogous.

    Two major points of the appeal of PV are:
    - long life with little maintenance
    - the ability to usefully harvest relatively small amounts of energy from small sites; larger PV installations are more economical, but the economics of small PV installations are still viable

    Neither of these is true for wind. Obviously, a wind turbine is a mechanical device which means that it is subject to wear and tear and breakdown. (On the other hand, rural people are used to maintaining their own infrastructure in a way that city people are not, so that difference may not matter so much in this context.)

    More significantly, the economics of scaling down wind power are fundamentally challenging for the physical reason that the energy output of a turbine goes as the swept area of the blades, which is the square of the blade length. So the energy output goes up as the square of the size of the turbine, while the cost of the turbine goes up (more or less) linearly with the size. This is part of the reason the big utility turbines keep getting bigger (up to the practical limits of material and site).
    But this equation also works in the other direction, and it does not favor small wind turbines to be economical. As was discussed in this very blog a few years ago:
    https://www.greenbuildingadvisor.com/blogs/dept/musings/resisting-allure-small-wind-turbines

    Now, UW is pushing 100kW-scale turbines and the failures of small scale wind are mostly documented for light residential turbines in the 5-20 kW range. There is some minimum size scale where the economics start to work again, and maybe 100 kW is over that line. But the economics are going to be marginal at smaller sizes, at best, and they are not going to lead to a PV-like growth curve.

    But UW's investors probably don't realize that.

  2. Jim Erdman | | #2

    small wind not simple
    I've been using small wind generators since 1977, PV since 1981, and have been a certified site assessor for both residential PV and small wind. It is easy to estimate generation for PV systems but complex for small wind. ("Small wind" is considered to be 100kw rated turbines or less). Terrain, ground cover, nearby buildings, prevailing winds, altitude, tower height, and other factors all affect power output of a turbine. Power output is proportional to turbine blade swept area and increases with the cube of windspeed and wind speed increases with altitude, varying with terrain and ground cover nearby, and the relationship can be complex and hard to predict. Since prices of PV systems have come down so much in the last few years, small wind is less financially viable except in areas of exceptional wind. I now tell interested people that if it is too windy to enjoy being outside, it might be windy enough for a turbine to be justified.

  3. GBA Editor
    Martin Holladay | | #3

    Response to Jim Erdman
    Jim,
    Thanks for your comments, which are consistent with the points I made in these two 2009 articles on the topic:

    Backyard Wind Turbines

    Resisting the Allure of Small Wind Turbines

    In the first of those two articles, I wrote, "A site isn’t windy enough to justify a turbine unless the wind is frequently irritating to residents."

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