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Potential of Wind Turbines in Saving Energy Cost

By Edited May 5, 2016 1 0

Potential of Wind Turbines in Saving Energy Cost

A wind turbine works by converting the kinetic energy from wind into electricity. The first modern wind turbine was set up in Massachusetts in 2001, at windmill point at the tip of the town hull. This 660 kW turbine was owned and managed by the Hull Municipal Light Plant (HMLP), with the assistance of the Massachusetts division of Energy Resources and University of Massachusetts renewable energy research laboratory. Wind turbines are normally tricky to set up, due to the number of factors that are taken into consideration when establishing a possible site for them. When HMLP sought to set it up in a highly populated coastal area, within close proximity to Boston’s Logan international airport, they naturally faced some amount of resistance (MDOER).

The Hull wind turbine was able to achieve a number of milestones, in the green technology arena (Schleede):

  • It was the first commercial sized wind turbine to go online within the eastern shore line.
  • It was the first turbine to be set up on a suburban site on the North American Continent.
  • It was the first publicly owned wind turbine, located in the United States within a close distance to a mass transit system (a ferry).


Current State of Wind Turbines in Massachusetts

Due to their very nature, wind turbines need to be located in windy areas. In Massachusetts, those types of areas are mostly available near coastal areas. To make wind turbines a viable renewable energy source, Massachusetts entered into various agreements, on a state level, to reinforce this commitment.

In May 2008, the Governor of Massachusetts, Deval Patrick, approved the Massachusetts Ocean Management Act. This legislation required that Massachusetts should develop a first-in-the-nation comprehensive plan to manage development in its state water, balancing natural resource preservation with traditional new uses, including renewable energy. The final plan was finalized in 2009, and identified two areas in Massachusetts state waters that bore the potential for utility scale alternative energy development (Trent). 

The Governor of Massachusetts, also signed a Memorandum of Understanding (MOU) in 2010 with the Governor of Rhode Island, Donald Carcieri, regarding future offshore wind turbines close to the state boundary. The MOU states that, any proposed wind farms in area designated on the MOU, would have to gain the approval of both states and any state economic benefits would be shared. 

In 2010, Massachusetts also became a member of the Atlantic Offshore Wind Energy Consortium, a consortium of 10 states, which aims at promoting a coordinated approach to the development of wind resources on the outer continental shelf.

To ensure the compliance and support of utility companies, Massachusetts established a key piece of legislation called the Green Communities Act. This Act support the development of wind turbines by requiring utility companies to into long term agreements with alternative energy developers (around 10 to 15 years), and thus providing them with the resources required to develop effective and efficient wind turbines for public consumption.

These projects are under the Bureau of Ocean Energy Management, a task force set up to oversee the implementation of federal regulation in wind projects of at the coast of Massachusetts.


Legislations and Taxes

Wind turbines are supported in Massachusetts at a federal and state level, for which they provide several incentives and rebate programs accessible to a variety of individuals. These programs include:

  1. Sales tax exemptions: buyers of wind turbines are exempted from paying sales tax on their purchase of a wind turbine.
  2. Local property tax exemptions: provisions are made for owners of wind turbines, not to pay their property tax. This exemption is in effect for 20 years after the date of installation and applies only to the value of the wind turbine equipment reflected on the property tax bill, not the full amount.
  3. State personal income tax credits: owners of wind turbines in Massachusetts are eligible to receive a personal income tax credit on the purchase of their equipment. This tax credit is charged on 15% of net expenditure for the system, including installation, or $1,000, whichever is less. If the credit is greater than the states income tax liability in individual years, then it can be carried over for 3 years. Eligibility is restricted to the purchase of new equipment, compliant with all applicable performance and safety standards and is expected to remain in operations for at least 5 years.
  4. Massachusetts Renewable Energy Certificate (REC): utility companies are required to generate a certain amount of power from clean energy sources like wind turbines. If they are unable to comply with those standards by using their own facilities, then they will have to buy them users of wind turbines, in the form of a Renewable Energy Certificate (REC). The state assigns a particular value to RE’s to protect owners of REC’s from market manipulation or excessively low prices. REC’s can be a good source of income, especially if you have an efficient wind turbine that is able to generate a good amount of power.
  5. Federal incentives: Even though the federal policy does not provide any direct income tax incentives, for home owners, it is able to support the use of wind turbines by exempting federal taxation on utility rebates to home owners. Another incentive applicable to new and existing wind turbine installations is the eligibility for financing under energy-efficient mortgage programs offered by convectional and government sources. These financing programs are aimed at insuring that the increased purchasing power of borrowers is equal to the estimated cost savings associated with reduced energy used (MCEC).

The need to find alternative renewable energy sources is not just a matter of cost savings but safe guarding the future of our planet, and hence future generations to come. Wind turbines have proved themselves to be an effective and efficient “green energy” source, depending on the location. The above benefits make owning a wind turbine a viable choice, for those looking to go “green” for their energy needs.


Cost and Savings

A number of factors are taken into consideration. These determine the cost of setting a wind turbine. These factors include:

  1. Wind Speed: one needs a wind speed of at least 10 mph or more to harness the power of a wind turbine. The lower the speed the lower the power generated and vice versa. The main price determinant is the number of wind turbines needed to meet energy needs.
  2. Zoning rights: wind turbines harness the power of the wind high of the ground, often 40 feet high. Wind turbines are subject to local zoning laws, which often require owners to obtain a permit before installation. The permit comes at a fee, which may vary depending on several factors.
  3. Agreements with utility companies: once the wind turbine is installed, it should be connected to the power meter, which then directly supplies the establishment. Depending on the wind speeds, and the amount of power generated by the wind turbine. It is possible to either be fully dependent or partially dependent on the power supplied by the wind turbine. If the wind turbine is able to generate power in excess of what is actually consumed, then the meter will be credited with points, which may be used later, if energy production by the wind turbine drops. Better yet, the utility company can give the extra credit (Schleede).
  4. The Equipment: the equipment can range in value, depending on the manufacturer, your location, and specifications of the wind turbine. For instance, a wind turbine company may charge you $8,500-10,000 to install and set up depending on the area where the wind turbines will be installed.

The amount of power that may be generated from the turbine is directly dependent on wind speeds in the area. For example, a wind turbine may be capable of generating 650 kilowatts hours a month would equate to a saving of around $65 a month (Trent).

At that rate, a wind turbine should be able to pay for its self in a period of 11 years. This computation takes the assumption that energy rates remain the same for that period, relatively low wind speeds and energy costs below the national average. A more accurate assessment, taking into consideration an increase in energy costs that matches inflation figures, one is likely to break even within a 7 year period.


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