Wind Turbine Finances
Summary for Suzlon S88 Turbine:
Rated Power Production:
2,100 kW
Cost: $2.7 M (as of April 2006)
Annual Electric Production: 5.8 Million kW
Potential Avoided Cost (consumption only): $283,040 at $0.0488/kWh
Potential effect on demand charge (single turbine): Approximately $14,000
Potential Revenue:
Sale
of electricity:
Avoided cost:
$283,040
Production Tax Credits: $0.019*kWh sold – maximum
~$110,200
Depreciation:
approximately $130,000- $750,000/year – depends on schedule
Costs to consider:
Operation and Maintenance: ~$25,000/year
Warranty:
Typically $0 for first two years, $25,000 for years 3-5
Electric usage:
~$800/year
Insurance: ~$14,000/year
Repair and replacement fund: ~$12,500
Decommissioning reserve: $1,000
Property taxes:
Financing Options:=
- Borrow full amount from financ=
ial
institution.
- Advantages: Quick, potentially lower cos=
t of
financing.
- Disadvantages: Unable to use production tax
credits, turbine availability
- Payment
=3D ~$29,640/month for 10 years at 5.75% (apr)
- total
cost of borrowing =3D $856,800
-
- Advantages: Quick
- Disadvantages: Unable to use production tax
credits, turbine availability
- Return
to endowment in 10 years + $13,040/year return
- We
would lose almost $1.25 M in income at 8.75% return
-
- Advantages: Ability to use production tax
credits, lower overall cost to college
- Disadvantages: Slow (need to identify candi=
dates
and develop relationship), turbine availability
- Funds
available limited by amount we can return (maximum of $110,200/year)
– presumably lower required return
-
- Advantages: Ability to use production tax
credits, lower overall cost to college, turbine availability
- Disadvantages: Slow (need to develop
relationship)
- Not
exclusively a College project.
- Funds
available limited by amount we can return (maximum of $110,200/year)
– approximately $900,000
-
- What
are limits of grants and gifts (or good estimates)?
- How
to divide up the rest? =