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Small WindProject Planning
North Central Electrical League (NCEL)
Business Breakfast
MN Division of Energy ResourcesLise Trudeau, Engineer
November 10, 2011
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Project Economics
The rate of return on investment for renewables depends on:
–Site–Equipment–Operation & Maintenance cost–Financing–Available incentives
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Getting Started
Is there a good wind resource? MN wind speed verification toolwww.energy.mn.gov > Clean Energy > Wind > Small Wind
• Uses state wind map data at 98ft (30 m)• Most accurate when using site
coordinates• For initial consideration only, need on-site
assessment by a professional wind site assessor
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Wind Speed at 100 ft hub height
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Project Siting
Wind Resource Assessment• Wind shear - drag produced by terrain• Displacement height - effective ground
level above nearby obstacles (treeline)• Rayleigh Distribution – frequency that
certain wind speeds occur in a year• Wind Rose – prevailing / seasonal
wind direction
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Project Siting
Wind resource and tower height strongly affect payback
AEO = 0.01328 D2V3
AEO= annual energy output, (kWh/yr)
D = rotor diameter, ft
V = wind velocity, mph
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Project Siting
• Recommend minimum tower height: • 100ft if there are no trees or structures nearby, • Lower blade at least 30ft above obstacles within
500 feet of tower.
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Project Siting
additional considerations• Proximity to interconnection site,
circuit breaker, and inverter• Location of well, septic tank and field,
other underground utilities• Soil type, depth of water table &
bedrock• Site access for concrete truck and
crane
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Permitting
• Permitting by township, municipality or county• Usually require a variance for towers over 30
feet
• Inform permitting officials early of any plans
• If no wind ordinance exists, you may want to introduce a model ordinance
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Interconnection
• Minnesota has uniform statewide guidelines for utility interconnection.
• Customer must pay for any metering and distribution line upgrades
• $300,000 of liability insurance required
• Electrical inspection by state inspector
• Utility anti-islanding test
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Metering
• Bidirectional meter is typical for net-metering
• RECs – need revenue grade meter to register in MRETS
• Some utilities may require separate meters for their own purposes
• MR 7835.1400 requires utilities to report energy delivered to and from the facility (not total energy produced)
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O&M Cost
• between 1 – 2% of installation cost, on average over life of turbine
• Depends on how much maintenance you can do yourself
• Varies with manufacturer• Ask other turbine owners!• Turbulent wind resource leads to
increased maintenance costs
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Other ongoing expenses
• Insurance • <40kW: $300k liability required• 40kW to 250kW: $1M liability with
coverage for utility line workers• Additional meter fee, if applicable• Net-metering fee
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Selecting an Installer
NABCEP Certified Small Wind Installers http://www.nabcep.org/installer-locator
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Selecting an Installer
Directory of small wind companiestheCleanEnergyBuilder.com Developed by SWIF and CERTs
Questions to ask a prospective installer: “Hiring a Renewable Energy Contractor” at www.energy.mn.gov > Clean Energy > Wind > Small Wind
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Selecting a Turbine
2010 Wind Generator Buyer's Guide, Ian Woofenden and Mick Sagrillo, June/July 2010 issue of Home Power Magazine
Ask other turbine owners!
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Sizing the turbine
Nameplate Capacity vs. swept area– Blades are the energy collector
Woofenden and Sagrillo, Home Power, 2010
**
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Independent Turbine Testing
Small Wind Certification Council http://smallwindcertification.org/ • Rated annual energy at 5 m/s• Sound level (not exceeded 95% of time, 60 ft from
rotor @ avg 5 m/s)
• Rated power at 11 m/s
National Renewable Energy Laboratory http://www.nrel.gov/wind/smallwind/independent_testing.html
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Federal• Residential Renewable Energy Tax
Credit • Small Wind Investment Tax Credit (ITC)• Treasury Grant in lieu of ITC• USDA Rural Energy for America
Program (REAP) • USDA Value Added Producer Grant
(VAPG)
Policies and Incentives for small wind projects
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Federal (continued)• Accelerated Depreciation • Clean Renewable Energy Bonds
Policies and Incentives for small wind projects
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State of Minnesota• Residential & Small Business Rebates• Net Metering Policy (< 40kW) • Sales Tax Exemption • Property Tax Exemption• Accelerated Depreciation• Sustainable Agriculture Loan Program• Agricultural Improvement Loan Program
Policies and Incentives for small wind projects
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Residential Renewable Energy Tax Credit
• Federal tax credit on personal income• Wind systems < 100kW• 30% of installation expenses• no maximum if placed in service after
12/31/08• Excess credit may be carried forward • Consult your tax advisor for more info
Policies and Incentives for small wind projects
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Small Wind Investment Tax Credit (ITC)
• Federal corporate tax credit • wind systems < 100 kW• 30% of installed cost• for equipment installed from January 1,
2008 through December 31, 2016.• Consult your tax advisor for more info
Policies and Incentives for small wind projects
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Treasury Grant in lieu of ITC• Cash grant instead of tax-credit• Same incentive level as ITC• Commercial, Industrial, Agricultural (not
for residential or non-taxable)• Construction must begin 2009 – 2010
and be completed before 2013.• Can’t be combined with PTC or ITC.
Policies and Incentives for small wind projects
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USDA Rural Energy for America Program (REAP)
• Non-metro farms and small businesses• Also eligible: electric co-ops and rural
utilities• limited to 25% of a proposed project's cost
(maximum grant is $500k)• loan guarantee up to $10 million • Grant + loan up to 75% of costs
Policies and Incentives for small wind projects
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USDA Rural Energy for America Program (REAP) continued
• Funding priority given to grants of $20k or less and combined loan and grant requests
• Submit application early – funding may run out.
• For more information, go to http://www.rurdev.usda.gov/mn/rbs.htm and click on REAP
Policies and Incentives for small wind projects
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USDA Value Added Producer Grant (VAPG)
• farms and producer groups• Funding for feasibility study, business plan,
and/or legal evaluation.• $100,000 maximum• Minimum 50% match with non-federal $• For more information, go to
http://www.rurdev.usda.gov/mn/rbs.htm and click on VAPG
Policies and Incentives for small wind projects
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Clean Renewable Energy Bonds• Local Gov’t, State Gov’t, Tribal Gov’t,
Municipal Utility, Rural Electric Co-op• Low- or no-interest• Awards granted from smallest to largest.
Smaller requests have higher chance of award.
• Max term: 16 years [on 3/2010] at current investor interest rates (calculated daily)
• maximum term posted daily at: https://www.treasurydirect.gov/GA-SL/SLGS/selectCREBDate.htm
Policies and Incentives for small wind projects
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Accelerated Depreciation - Federal• Five year depreciation schedule for wind• Consult your tax advisor for more information. • See also:
• IRS Publication 946 “How to Depreciate Property” at www.irs.gov
• And www.dsireusa.org, MACRS + Bonus Depreciation (2008-2009)
Policies and Incentives for small wind projects
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Accelerated Depreciation - State• Five year depreciation schedule for
wind• Consult your tax advisor for more
information. • See also: www.taxes.state.mn.us
Policies and Incentives for small wind projects
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• Net Metering• Limited to generators under 40kW• For generators using this rate, utility pays average
retail rate for the customer class• Customer opts for either utility check for NEG paid
at the end of each month or customer may opt to carry a credit for NEG on their bill and have credit paid out on request.
• Effectively like using the grid as a battery back up– Customer must pay for extra meter charge
Policies and Incentives for small wind projects
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Exempt from MN Sales Tax:• materials used to manufacture, install,
construct, repair or replace wind-energy systems (including rental equipment)
• buyers complete MN Dept of Revenue Form ST3 "Certificate of Exemption"
• sellers keep the form in their files for tax reference
• see: www.taxes.state.mn.us
Policies and Incentives for small wind projects
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Exempt from MN Property tax:• all real and personal property of wind-
energy system• land on which wind system is located
remains taxable
Policies and Incentives for small wind projects
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Sustainable Agriculture Loan Program• Up to $40,000 per farmer• Up to $160,000 on joint projects • 3% interest, up to 7 year term• See:
http://www.mda.state.mn.us/grants/loans/esaploan.aspx
Policies and Incentives for small wind projects
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Agricultural Improvement Loan Program• On-farm wind up to 1 MW• Interest Rate 4.5% (as of March 2009)• Up to 10 year term• Admin by MN Dept. of Ag. through MN Rural Finance
Authority (RFA)• RFA participation limited to 45% of the principal or
$300,000, whichever is less• See:
http://www.mda.state.mn.us/grants/loans/improvement.aspx and http://www.mda.state.mn.us/en/about/divisions/agdev/agfinance.aspx
Policies and Incentives for small wind projects
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Public Building (e.g. school):Federal:• Clean Renewable Energy Bonds (CREBs)• Residential Renewable Energy Tax Credit • ITC or Treasury Grant• Accelerated Depreciation• USDA Grants - REAP and VAPG
State:• State Rebate• Accelerated Depreciation• Sustainable Agriculture Loan Program• Agricultural Improvement Loan Program
Policies and Incentives for small wind projects
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Personal Installation:Federal:• Clean Renewable Energy Bonds (CREBs)• Residential Renewable Energy Tax Credit • ITC or Treasury Grant• Accelerated Depreciation• USDA Grants - REAP and VAPG
State:• State Rebate• Accelerated Depreciation• Sustainable Agriculture Loan Program• Agricultural Improvement Loan Program
Policies and Incentives for small wind projects
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Small Rural Business :Federal:• Clean Renewable Energy Bonds (CREBs)• Residential Renewable Energy Tax Credit • ITC or Treasury Grant• Accelerated Depreciation• USDA Grants - REAP and VAPG
State:• State Rebate• Accelerated Depreciation• Sustainable Agriculture Loan Program• Agricultural Improvement Loan Program
Policies and Incentives for small wind projects
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On-farm installation :Federal:• Clean Renewable Energy Bonds (CREBs)• Residential Renewable Energy Tax Credit • ITC or Treasury Grant• Accelerated Depreciation• USDA Grants - REAP and VAPG
State:• State Rebate• Accelerated Depreciation• Sustainable Agriculture Loan Program• Agricultural Improvement Loan Program
Policies and Incentives for small wind projects
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For more information, go to
www.dsireusa.org
Database of State Incentives for Renewables and Efficiency (DSIRE)
Policies and Incentives for small wind projects
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Additional comments and questions:www.energy.mn.gov > Clean Energy > Wind > Small Wind
1-800-657-3710 (MN only)651-296-5175
651-296-2860 [email protected]