Ecology And Environment

# The Benefits and Costs of having your own Windmill

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"The Benefits and Costs of having your own Windmill"
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The first consideration regarding windmill ownership is political. A 35-foot tower can't be erected without consulting the city zoning ordinances as well as the local neighborhood association. Windmills are generally labeled as an "eyesore" and not allowed on personal property. If you live far enough from civilization to be free of such restrictions, however, alternative energy can be an interesting idea to explore.

Once the political considerations are taken care of, it's time to whip out the calculator and do some financial number crunching. According to Skystreamenergy.com, their latest windmill costs up to \$15000 dollars and produces roughly 400 kWh/month (under the assumption that the wind is blowing at least 12 mph each day). To put these numbers in perspective, we'll need to do some calculations.

The average American household uses 740 kWh of electricity at an average of \$0.10/kWh, which means a bill of \$74/month. If the windmill can produce its expected 400 kWh, that means the household only needs to buy 340 kWh, or \$34 worth, of electricity. The result is a net savings of \$40/month, equivalent to \$480/year. Dividing \$15000 by \$480/year, you'll find that in a mere 31 years and 3 months, you'll have reached the break-even point. Your grand children will be thrilled for you.

Of course these calculations are only as good as the underlying assumptions. According to the company brochure, the windmill will output nothing if the wind speed is less than 8 mph, and its output reaches a maximum when the wind speed is around 12 mph. So a day when the wind doesn't blow will not be "made up for" by days when the wind blows strongly. The figure of 400 kWh/month is only valid in areas of the country that are consistently windy.

The rising cost of energy is another factor to consider. If the price of purchased electricity increases, so will the savings you get from owning a windmill. In effect, a windmill is a form of speculation. By purchasing one, you speculate that energy prices will increase and hedge your assets accordingly. The known cost of buying the windmill keeps you from having to worry about losing an unknown amount of money in the future because of rising energy costs.

Another interesting aspect of producing your own energy is the ability to sell the excess. If your energy usage is less than the windmill's output, the electric company may pay you for the difference at a rate that will vary from company to company. As energy costs increase, this could become a nice source of income if you have several windmills.

Maintenance and repair costs throw another wrench in the calculations, however. The product is warranted for five years, after which I can only assume maintenance costs will skyrocket. With few personal windmills in existence, owners will be forced to purchase parts from the company at whatever price the company chooses to charge. Few repairmen will be motivated to learn windmill repair when there are many more mundane machines to be fixed. My guess is the company will have to send out an expert technician to fix any serious problems, and that won't be cheap.

Finally, as with all purchases, you need to consider the opportunity cost. Sure, you could pay \$15000 for a windmill and save \$40 a month, or you could invest it at, say, 3% compounded monthly and have \$38000 in the bank after 31 years. (Remember, with the windmill you only break even). If you use that 15 k to pay off a mortgage, car loan, or credit card debt, the positive effect on your finances will be dramatic.

Taking it all into consideration, personal windmills appear to be an idea ahead of their time, a toy for the rich. However, many of the products we now take for granted started out that way. Microwaves, personal computers, and lcd displays come to mind. Today's status symbol may be tomorrow's necessity.

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