Do Wind Turbines Actually Save Money?

Wind turbines have become an increasingly common sight across the globe, with over 60 countries now utilizing wind power. But the question remains – do these gigantic windmills that dot oceans, plains, and mountain tops actually help save money, or are they just a costly endeavor?

At first glance, the math seems simple. Harnessing energy from the wind should be cheaper than paying for fossil fuels like coal and natural gas. However, the debate around wind turbines and cost savings quickly becomes more complex. Upfront building expenses, maintenance fees, and capacity factors all impact the real-world financials of wind farms. Additionally, government subsidies prop up the wind industry in many nations, muddying the true costs.

In this article, we’ll explore the real data around wind turbines and analyze whether they live up to their reputation as an affordable energy source. Looking at case studies from around the world, we’ll aim to cut through the complexity and politics to reach a clear verdict on wind power’s cost-saving potential.

Upfront Costs

Wind energy requires significant upfront capital to build wind farms and procure turbines. A utility-scale wind turbine can cost over $3 million to purchase and install. Large wind farms with dozens or even hundreds of turbines involve investments of hundreds of millions of dollars.

These high upfront costs present a barrier for many utilities and independent power producers who may not have access to this level of capital. Building a new natural gas power plant is estimated to cost roughly half as much per megawatt of capacity compared to building a wind farm.

Wind project developers need to secure financing from banks and other institutions in order to fund the upfront costs. The availability of financing depends heavily on government tax credits and incentives which provide more favorable investment conditions.

So while wind may have low operating costs once built, the sheer amount of upfront capital required makes it a more expensive option than fossil fuels strictly in terms of initial investment.

Ongoing Maintenance

Regular and proper maintenance is crucial to keep wind turbines operating efficiently and preventing failures. Major components like gearboxes, generators, blades, and bearings need periodic inspections, lubrication, and part replacements to maximize performance and lifespan.

Turbine maintenance costs can vary greatly based on the size, age, and type of turbine. Industry experts estimate average annual O&M costs to be $10,000-$15,000 per MW of installed capacity. Larger turbines generally have lower per MW maintenance costs. Offshore turbines also tend to have higher O&M costs than onshore models.

Major component repairs or replacements can cost hundreds of thousands of dollars over the turbine lifetime. Gearboxes and bearings often need overhauls or upgrades after 5-10 years. Generator rewinds may be needed after 10 years. Blade inspections and repairs are required to fix any damage from weathering or impacts.

Proper maintenance helps minimize costly unplanned failures and maximize the amount of clean electricity generated over the system lifetime. While not insignificant, these maintenance costs are more predictable than the fluctuating costs of fossil fuels.

Capacity Factor

Wind turbines only generate energy part of the time. They rely on wind blowing at the right speed; if it’s too slow or too fast, they shut down. This intermittent operation means wind turbines have a much lower capacity factor than traditional power plants.

The capacity factor of a power plant measures its actual output over a period of time compared to its potential output if it operated at full capacity continuously. According to government data, the average capacity factor for wind farms in the U.S. is around 35%. That means wind turbines only produce about a third of the energy they could if they operated at 100% all the time.

This is far lower than the capacity factors of conventional power plants like nuclear or natural gas, which operate at much higher factors of around 90-95%. The low capacity factor of wind power means more turbines have to be built to reach the same energy production as traditional sources.

Cost per kWh

Comparing the levelized cost per kWh for wind versus other energy sources provides insight into the long-term costs. The levelized cost factors in upfront capital and development costs, capacity factors, operating costs, financing costs, etc. over the lifetime of a generation asset. According to Lazard’s 2021 Levelized Cost of Energy Analysis, the estimated levelized cost per kWh for onshore wind is $28-$54. Offshore wind is estimated at $83-$117 per MWh. This compares favorably to the levelized costs for conventional energy sources like gas combined cycle at $44-$68 per MWh, coal at $60-$142 per MWh, and nuclear at $129-$198 per MWh. The levelized costs clearly show that wind energy is highly cost competitive with traditional energy sources.

Government Subsidies

Governments often provide subsidies and incentives to encourage the development of wind energy. These can significantly reduce the costs of wind turbines and make them more financially viable.

Some common subsidies and incentives include:

  • Tax credits – These can reduce the amount of taxes a wind project owes, lowering overall costs.
  • Cash grants – Upfront payments to help cover installation costs.
  • Accelerated depreciation – Allows projects to deduct more costs earlier, reducing tax burden.
  • Loan guarantees – Lowers interest rates and makes financing easier.
  • Renewable portfolio standards – Require utilities to use renewable energy, creating demand.

Experts estimate that subsidies can reduce the cost per kWh of wind energy by 20-50%. This makes a significant difference in the amount of money saved over the long run. Without subsidies, many wind projects would likely not achieve positive returns on investment nearly as quickly.

However, subsidies do vary based on local and federal policies. The level of financial support must be weighed when estimating potential cost savings.

Externalized Costs

Fossil fuels like coal, oil, and natural gas have major externalized costs that are not reflected in their market prices. These include the environmental and health damages caused by air pollution, water pollution, and climate change. Burning fossil fuels releases pollutants like sulfur dioxide, nitrogen oxides, particulate matter, mercury, and carbon dioxide into the atmosphere. This leads to impacts like asthma, respiratory diseases, heart attacks, cancer, and premature deaths, costing society hundreds of billions of dollars per year in healthcare costs and lost productivity. Fossil fuels also contribute heavily to climate change, which leads to rising sea levels, more extreme weather, biodiversity loss, and massive economic disruption over the long-term. The International Monetary Fund estimated in 2019 that the global subsidization of fossil fuels when accounting for externalized costs was $5.2 trillion per year, or roughly 6.5% of global GDP.

In comparison, renewable energy sources like wind and solar have minimal externalized costs. Their operation does not produce pollution or carbon emissions. When accounting for the full societal costs of each energy source, studies consistently find renewables to be cheaper than fossil fuels. So while renewables like wind turbines require significant upfront investments, their minimal externalized costs make them financially beneficial over the long run.

Price Stability

Wind energy can help stabilize electricity prices in several ways:

First, wind turbines have no fuel costs. Unlike natural gas or coal power plants, the cost of wind energy remains fixed over time. This makes electricity from wind farms more price stable.

Second, having a diverse mix of energy sources helps reduce electricity price volatility. Wind energy diversifies the electricity generation portfolio and hedges against fuel price spikes.

wind turbines spinning and generating electricity with no fuel costs

Third, wind energy production often peaks at night when electricity demand is lower. This extra electricity supply during off-peak hours puts downward pressure on wholesale electricity prices.

Studies have shown that increasing wind energy to 20-30% of electricity generation can reduce wholesale electricity price volatility. The fixed, predictable costs of wind energy appear to have a moderating effect on electricity prices.

Case Studies

There are many real world examples that demonstrate the cost savings wind energy can provide. Here are a few case studies:

Westar Energy – This utility company in Kansas built a 200 MW wind farm in 2011 called Flat Ridge 2. The wind farm cost $430 million to build but has saved customers an estimated $645 million in its first 10 years of operation through lower fuel costs.

Berkshire Hathaway Energy – In Iowa, this company’s 399 MW Top of Iowa wind project came online in 2020. The estimated $700 million cost of the project is expected to save customers $900 million in energy costs over 25 years.

Puget Sound Energy – This Pacific Northwest utility built the 149 MW Wild Horse Wind and Solar facility in 2006 for around $450 million. The project has reportedly saved customers over $56 million in its first 10 years through reduced demand for fossil fuels.

These examples demonstrate how wind power can deliver significant long-term savings on energy costs and offset the initial capital expenditures through cheaper ongoing electricity production.


In summary, the findings show that while wind turbines require high upfront costs and ongoing maintenance expenses, the long-term savings from cheap, renewable energy can make them a smart investment. The low operating costs and zero fuel costs allow wind power to produce electricity at competitive kWh rates that beat fossil fuels. Government subsidies and policies currently help improve the economics of wind energy as well.

However, there are caveats. The capacity factor of wind turbines is highly dependent on location. And the full lifespan externalized costs are still being understood. Individual project economics may vary.

Overall, for windy locations that can utilize economies of scale, wind turbines can save money in the long run, hedge against fuel price volatility, and provide sustainable, low-carbon energy. But each potential wind project requires detailed analysis to determine if it will produce a positive return on investment over its lifetime.

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