How Much Does A Renewable Energy Wind Turbine Cost?

Renewable energy sources like wind and solar are becoming increasingly important as the world looks for cleaner alternatives to fossil fuels. Wind energy, in particular, has seen rapid growth in recent years. Wind turbines harness the power of the wind to generate electricity. While a single wind turbine may not seem like much, when many turbines are installed together in large groups, called wind farms, they can produce enough electricity to power thousands of homes.

According to the U.S. Department of Energy, wind energy is one of the lowest priced renewable energy technologies available today [1]. The cost of wind turbines and wind energy has fallen dramatically in the last decade, making it more affordable and accessible. However, constructing a wind turbine and operating a wind farm still requires significant upfront investment and ongoing costs.

[1] https://www.energy.gov/eere/wind/benefits-wind

Table of Contents

Types of Wind Turbines

There are two main types of wind turbines: horizontal axis and vertical axis turbines. Horizontal axis turbines are the most common type of wind turbine. The blades of horizontal axis turbines spin around a horizontal shaft aligned with the wind. Vertical axis turbines have blades that go from top to bottom around a vertical shaft.

Horizontal axis turbines can have either an upwind design, with the rotor facing the wind in front of the tower, or a downwind design, with the rotor behind the tower. Upwind designs are more common. The main advantage of horizontal axis turbines is that they can take advantage of higher wind speeds at increased heights by having tall towers. They also have higher efficiency than vertical axis turbines.

Vertical axis turbines, like the Darrieus turbine, have some advantages like being omni-directional so they don’t have to rotate to face the wind direction. However, they are generally less efficient and produce less power than horizontal axis turbines. They also have lower wind speed thresholds and do not scale up in size as well as horizontal axis turbines.

Overall, horizontal axis turbines, like modern three-blade turbines, are the predominant design for utility-scale wind farms and large turbines due to their greater efficiency and ability to take advantage of higher wind speeds at tower heights of 80 meters or more.

Source: https://www.eia.gov/energyexplained/wind/types-of-wind-turbines.php

Turbine Components

Wind turbines are made up of many critical components that work together to convert wind energy into electricity. The main components include:

Tower – Tall towers support the rotor and nacelle high up in the air where winds are stronger and more consistent. Typical tower heights range from about 80-120 meters.
Rotor – The rotor is made up of two or three blades mounted to a central hub. Rotor diameters now commonly exceed 100 meters. The aerodynamic blades capture the wind energy and convert it into rotational motion to turn the main shaft.

Gearbox – The gearbox increases the low rotational speed of the rotor to the high speeds required to generate electricity in the generator. The gearbox sits between the rotor and the generator.
Generator – The generator uses electromagnetic induction to convert the rotational energy into electrical energy. Many modern wind turbines use direct-drive generators without gearboxes.
Nacelle – The nacelle sits atop the tower and contains the gearbox, generator, controller, brakes, and more. It allows the rotor to yaw (turn) to face the wind.

Other – Other components include the foundation, transformer, cables, controls, brakes, bearings, and more.

The individual performance of each component impacts overall wind turbine performance and reliability (energy.gov). Careful turbine design, component selection, and maintenance helps maximize wind energy production.

Component Costs

The major components of a wind turbine include the rotor blades, gearbox, generator, tower, and other balance of system parts. According to a 2021 report by the National Renewable Energy Lab (NREL), the average breakdown of component costs for land-based utility-scale wind turbines in 2019 was:

Rotor blades – 27%
Gearbox – 16%
Generator – 10%

Tower – 10%
Balance of system – 37%

The cost of rotor blades has declined but continues to be the most expensive part of a wind turbine. Blades are manufactured from composite materials like fiberglass and carbon fiber. Larger rotor diameters require larger, more expensive blades. Gearboxes, generators, and towers have also decreased in cost over time with technology improvements.

For small wind turbines (under 100 kW), the balance of system costs make up a larger percentage. This includes wiring, electrical components, foundations, installation labor, and more. Smaller wind projects require more customization which increases balance of system expenses compared to utility-scale wind farms.

Other Cost Factors

In addition to the turbine itself, there are several other factors that contribute to the overall cost of a wind energy project (WeatherGuard Wind, 2022):

Land – Suitable parcels of land must be leased or purchased to site the turbines. Prime locations with strong, consistent winds are often in remote areas, increasing land costs.

Grid connection – Connecting the wind farm to the electrical grid requires building many miles of high-voltage transmission lines, which can cost millions of dollars depending on distance.

Installation – Transporting and assembling the massive turbine components onsite with cranes requires expensive equipment and skilled labor.

Maintenance – Routine maintenance and repairs are necessary over the turbine’s 20-30 year lifespan. This may cost $48,000 per turbine annually (WeatherGuard Wind, 2022).

Permitting – Extensive permitting, engineering studies, and environmental impact assessments are mandated, costing time and money.

Financing – Securing private financing for a multi-million dollar wind project involves high interest rates and fees.

Total Installed Cost

The total installed cost of a wind turbine can vary greatly depending on the turbine capacity, tower height, location, transportation costs, foundation, electrical infrastructure, permitting, and other factors. However, some general cost ranges can be identified.

For smaller residential and farm-scale turbines under 100 kW, total installed costs typically range from $3,000 to $8,000 per kW of capacity. For example, a 10 kW turbine would cost $30,000 to $80,000 installed.

For commercial-scale turbines between 100 kW to 1 MW, total installed costs generally range from $1,300 to $2,200 per kW. So a 250 kW turbine would cost around $325,000 to $550,000 installed.

For utility-scale wind farms with large megawatt-class turbines, total installed costs average around $1,500 per kW. According to the U.S. Department of Energy, the average installed cost for wind projects in 2021 was $1,500/kW. So a common 2 MW turbine would cost roughly $3 million installed as part of a wind farm.¹

Offshore wind turbines are more expensive at around $2,500 to $6,500 per kW installed due to transportation, foundations, and other costs.

Overall, total installed wind turbine costs can range from a few thousand dollars for a small turbine up to several million dollars for multi-megawatt utility-scale turbines.

O&M Costs

In addition to the initial capital costs, wind farms have ongoing operations and maintenance (O&M) costs. These include regular maintenance checks and repairs to ensure optimal performance and availability. Major components like gearboxes, generators, blades, and turbines may need more substantial repairs or replacement over the 20+ year lifetime of a wind farm.

Annual O&M costs are estimated to be around 1-3% of the initial capital costs. For a 2 MW turbine costing around $3 million installed, the annual O&M costs would be $30,000-$90,000. These costs cover regular preventative maintenance, unplanned repairs, spare parts, insurance, land lease payments, and administration. As wind farms age, the repairs and component replacements may increase O&M costs over time.

Cost Reductions

Technological improvements have been a major driver in reducing wind energy costs over time. According to the U.S. Department of Energy, experts predict cost reductions of 17%-35% by 2035 and 37%-49% by 2050 compared to 2020 costs, driven by larger and more efficient wind turbines (U.S. Department of Energy).

One analysis in the journal Renewable Energy found that technological advancements contributed over 30% to wind turbine cost reductions between 1983-2019 (Elia, 2020). These advancements include:

Larger rotor diameters and hub heights to capture more wind energy
Advanced materials like carbon fiber to build lighter, stronger blades
More reliable gearboxes and generators

Improved blade aerodynamics and control systems

According to Renewable Energy World, the average turbine capacity delivered per project grew 45% from 2010 to 2020, enabled by taller towers and longer blades (Renewable Energy World). These larger and more efficient turbines lead to lower overall project costs per megawatt.

Financial Incentives

There are several financial incentives available to help reduce the net cost of installing a wind turbine. These include federal tax credits, cash rebates, grants, and loan programs.

At the federal level, homeowners can claim a tax credit for 30% of the total installed cost of a small wind energy system through 2019. This credit applies for systems up to 100 kW in capacity (Wind Energy Financial Incentives – WINDExchange, n.d.).

Many local and state governments also offer rebates and grants to partially fund wind turbine installations. For example, the California Energy Commission provides rebates covering up to 50% of the cost for qualifying small wind turbines (Economics and Incentives for Wind – WINDExchange, 2020). These programs aim to accelerate the adoption of renewable energy.

The USDA provides grants and loan guarantees to agricultural producers and rural small businesses for up to 25% of total eligible project costs for renewable energy systems like small wind turbines (Wind Energy Financial Incentives – WINDExchange, n.d.).

Taking advantage of these financial incentives can significantly reduce the net out-of-pocket costs of installing a wind turbine. Careful planning and research is necessary to identify and qualify for the full range of available incentives.

Conclusion

In summary, the total cost of a wind turbine can vary greatly depending on the size, type, location, and other factors. Utility-scale onshore wind turbines typically cost around $1.3 million per MW of capacity. Offshore wind is more expensive at around $4 million per MW. Smaller distributed wind turbines for homes and businesses are much less, from $3,000 to $100,000 for a residential scale turbine.

While upfront costs are still high, wind energy is becoming more affordable over time. Experts predict costs for wind energy will decrease anywhere from 17% to 50% by 2035. This is driven by technology improvements such as larger and more efficient turbines, economies of scale, and lower financing costs. With financial incentives like tax credits bringing the levelized cost down further, wind power is increasingly competitive with fossil fuels.

The future outlook for wind energy costs is promising, with near-term reductions expected over the next few years. With wind already among the lowest cost sources of new electricity generation, further declines in costs will make wind power even more compelling and widespread.