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The Surprising Cost of Tilting At Windmills

March 21, 2017

They rise like giants out of the prairie. Visible for miles, first one, and then a second and soon an entire ridgeline full. The car stands still as they capture the wind and push the land under my wheels.

As a kid I remember watching the steel giants carry powerlines across endless miles of prarie. The steel giants of my youth have given way to the gleaming white windmills of today. We saw more than I could count even if I had the inclination to. As we made our way across Southern Idaho, I tried to decide if they were an eyesore? Southern Idaho has it’s own kind of beauty, but it involves a lot of rocks, and dirt and sagebrush. The wind farms stretched for miles, breaking up either the monotony or the beauty of the passing landscape.

I’m sure they are a boon to the landowners. It’s not like they were using that land for anything anyway. Cattle can still graze on the sparse grass that managed to eke out an existence between the rocks. The land is unfit for farming and there’s no water even it was.

That got me thinking about the cost of those windmills. And despite being in the middle of nowhere, the cell phone companies have done a great job of providing coverage for the I-84 corridor. My lovely wife was driving so I used my phone to look up the cost and the payback on a windmill. I was amazed.

Eight months.

The payback on a windmill is eight months. That seemed really, really short. Next, I looked up the cost. A typical windmill costs $1.3M. My lovely wife started to do the math out loud. She started to divide a million dollars by eight months. Then, when you figure in the cost of electricity. . . and that’s where we realized there was a problem.

It doesn’t work. The math fails. There is no way that you can earn back $1.3M in less than a year.

I went back to the web and tried a different search string. This time I asked for the return-on-investment. Much different result.

I had no idea that “payback” and “return-on-investment” are two different things. I went back to my earlier search results and realized that “payback” refers to the amount of energy needed to build a windmill.

To combat global warming, why don’t we just all agree to leave our refridgerator doors open?

If it takes more energy to create a solution than that solution will save, you are “selling below cost, but making it up in volume.” But, fortunately, windmills aren’t energy negative. In fact, they are remarkably efficient. In just under a year, the windmill will produce more energy than was expended to create it. Everything after eight months is a net positive in terms of energy.

I felt better about those miles of windfarms. They really were making a difference. So, what about the return-on-investment? How long did it take the power companies to earn back the $1.3M cost of that windmill? Turns out the return-on-investment, if you do the math (or read about it, like I did) at the current cost of electricity, it takes 24 years to earn back the $1.3M. That’s not even counting the time-value-of-money, or the difference in what you could have earned if you had invested the money for 24 years.

The article I was reading also included information about the expected lifespan of a windmill giant: 20 years. Those big white giants are expected to keep turning for 20 years. . .and it will take 24 years to pay off the cost.

Apparently they are selling below cost, but figure they’ll make it up in volume.

Note: Since it requires energy to cool your refridgerator, leaving the door open, would result in more energy being expended and it would actually get warmer rather than cooler. It’s the reason that the hottest portion of your summer yard, is right next to the air conditioner.

Rodney M Bliss is an author, columnist and IT Consultant. His blog updates every weekday. He lives in Pleasant Grove, UT with his lovely wife, thirteen children and grandchildren. 

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