Updated on 09.19.14

The Cost and Benefits of Installing a Windmill

Trent Hamm

Chasing windmills like Don QuixoteAre you thinking of going seriously green? Are you willing to invest some serious money up front in order to reap the benefits in the long run? If so, a wind turbine might be the thing for you.

I’ve installed CFLs and programmable thermostats, but what I’d really love to do is to be almost exclusively reliant on my own energy production, with the ability to sell excess back to the grid on windy days and pull in a bit of electricity on very still days. I happen to live in an area where several school districts within an hour’s drive, as well as a dozen or so individual homeowners, have installed their own Skystream wind turbines for electricity generation.

A Look at the Cost and Benefits of Installing a Windmill

How big are they?

They stand about forty feet high, tall enough to be well over the roof of a three story home. In other words, it would roughly be twice as high as the roof on a two story suburban home, for example. These are tall enough that you have to check around for local zoning issues to see whether or not you can put such a structure in place (they’re perfectly fine over almost all of Iowa, for example – I checked).

How much power does one generate?

For a Skystream to be fully functional, you need to live in an area with wind that averages 10 miles per hour or more; on the Great Plains, this isn’t a problem, as you can see from this wind map of Cedar Rapids, Iowa. You can easily find wind maps for your own state as well.

Given that, a fully functional Skystream wind turbine produces 1.8 kW of power in a 20 mile per hour wind. To put that in context, that’s just under 1,300 kilowatt hours a month. For comparison’s sake, we used approximately 600 kilowatt hours of electricity last month – and this included a particularly vicious cold period where temperatures sunk below zero for a period.

What about power excess?

When you install a home wind turbine, it is hooked up to your power meter directly and power is drawn first from the turbine, then from your normal electricity provider (the electric company). When the wind is very low, almost all of your power comes from them and your power meter works as normal, recording the kilowatt hours you use from the electric company. As the wind picks up, more and more electricity comes from the turbine and less and less from the electric company, until a point is reached where all power comes from your turbine. If the wind blows faster than that (10 miles per hour or more), then the turbine will produce more energy than your home is consuming. The rest of it goes onto the electrical grid and helps to power your neighbor’s homes. Even better, the electric meter at your home will run in reverse, crediting you for the electricity you supply.

I have a friend who has an electricity credit every single month, more than enough to cover the basic fee of his electrical hookup. Annually, he receives a small check from the electric company for the credit he has accumulated with them. Yes, he has no electric bill at all and actually receives a check for it.

What’s the cost?

A Skystream 3.7 (the wind turbine that has been recommended to me and the one I have researched most thoroughly) costs about $8,500 to purchase, install, and set up in my area. Installation costs in other areas are higher, ranging up to $12,000.

How much can it save a month?

Let’s say, hypothetically, that your local rate for a kilowatt hour is $0.10 (the national average is actually $0.11). Let’s say the turbine works at half-capacity and generates 650 kilowatt hours a month. Thus, the turbine saves $65 per month on your energy bill. At that rate, you will pay for the turbine with the energy savings in 132 months, or roughly eleven years. This assumes, of course, no increase in energy rates over that time, it assumes energy costs that are already below the national average, and also assumes a relatively low windspeed compared to what is available to me in northern Iowa. According to my own math for my area, and also assuming an increase in energy costs that matches inflation, we would be able to pay it off in about seven years.

Are there other benefits (besides for the environment)?

There also may be state tax benefits for installing such a device; Iowa residents can buy the equipment and pay for the installation with no sales tax and can earn $0.01 in credit for each kilowatt hour of energy sold back to the electric company, even if that results in just a reduction of your bill (please note that this is my understanding of the law – don’t use this as the basis for an installation). Thus, if you could sell back a few hundred kilowatt hours a month, you would earn a $30 or so tax credit each year.

The bottom line is that this is a major step one can take if they’re really interested in green solutions. Even better, it can end up paying for itself and more, resulting in not only doing the right thing for the environment, but doing the right thing for your wallet as well.

Read about how installing solar panels can affect your home insurance.

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  1. Andrew says:

    Cool post. I’m not particularly enamored of the environmentalist perspective, but I love, philosophically, the idea of individual energy independence. The financial logistics seem within reason for many people. I’d like to see an analysis of residential solar power as well, though from what I understand it’s not yet reached a very appealing cost efficiency for the typical homeowner.

  2. Very interesting post. I seriously encourage all of those who have interest in wind, solar, geothermal, etc.. to do the research and see if it would work for them.

    In many places there are subsidies and tax credits, and the pleasure you can get from such a system also should be factored in (it would certainly increase my average happiness to be off-grid ;).

  3. Hazzard says:

    I wonder what the maintenance costs of the system would be over 11 years? I’m excited at the thought of innovative solutions to cut our energy use.

    The idea of a “peer to peer” energy world seems pretty cool!

  4. Nicole says:

    Just returned from Oregon and every few minutes while traveling I-84 down the Columbia River Gorge, you see these massive propellers begin carried on a long semi truck. All separate pieces, there will be 3 propellers and then a super long post. It’s unreal how huge they are and they’re putting them all over in Eastern Oregon through a private company I believe.

    Makes sense since The Gorge is “the windsurfing capital of the world”. There’s another use for all that wind!

  5. jake says:

    I am hoping that more and more people use solar panels and wind turbine so that the price can go down. Eventually it’ll be competive enough where its about 2-3 thousand for everything. $8500 is still way to high for me.

  6. Guest says:

    Is this really environmentally safe? It looks to me from the web link that this device uses a great deal of metal, copper and oil to operate. It gets environmentally unfriendlier when you factor the batteries needed, guy wires, inverters and other components you need to buy to operate.

    So I’m thinking if we had 1 million homes put one of these in, we’d have battery acid leaking all over everyone’s yard, oil leaking out onto your lawn (instead of driveway like car) the world strip mined for copper, aluminum and other metals just so that it becomes “environmentally safe.”

    Gotta call you out on this one Simple

  7. Rob says:

    Thought about it, but the next upgrade will likely be an on-demand water heater. We have way, way, way too many 30-40 foot trees around our house for wind to be viable here in N. Illinois.

  8. Alexander says:

    My home is powered by an array of 6 VAWTs that I made myself for a total price of £800. I have an average power production of around 1.2 kWh/mo (pretty much all of which I use). They stand on rigged platforms of 14ft, i.e. they need no council approval.

    I would advise everyone serously looking at it to do the same. These things need no electrical know-how to make. If you do not know what a VAWT is, check http://www.instructables.com/id/EVM8ECZA4VEYKVV734/ for one interpretation, or (for a somewhat more technical one) http://www.aerotecture.com.

  9. Jesse says:

    living in california, I don’t see to many wind turbines, but I see plenty of solar panels. the sun really shines on summer days, but I’ve always thought wind power would be better in winter, seeing as winds sometimes reach an excess of 30 MPH, on really windy days.

  10. Boler says:

    If you consider the implications of peak oil and the coming US economic collapse, I would say that $8500 is very cheap indeed. If I owned a house I would do everything I could to make it self sufficient and low energy now while I still can relatively cheaply.

  11. Kurt says:


    Who said anything about batteries? The grid IS the battery. Electric motors/generators are virtually maintenance free. You should take a look at the overall electric grid if you are concerned about the usage of metals.

    I do like the idea of distributed energy generation. It can make the grid much more reliable and improve the overall efficiency. However, small wind generation is not overall economical compared to industrial wind generation. Choose green power from your power company. Otherwise buy renewable energy credits to offset the dirty power you consume. If you happen to have the extra money, residential solar/wind are a good investment for society. Someday the price and EROI will be just right for the masses. Until then go for the lower hanging fruit.

  12. You also have to taken into account the capital investment you are making on your home. (I.e, if you decide to sell then it’s likely to add value to your home).

    Unfortunately in my area I am prohibited from installing such a turbine and at the local high school they had to turn their old one off as it was too noisy. (Yet they won a government award for having it, even though it can no longer be used.)

  13. Daniel says:

    What about noise? I heard that wind turbines can be quite noisy?

  14. Max says:

    This ignores maintenance costs of a wind generator. Opportunity costs and the lifespan. The generators taken to the south pole by Admiral Byrd is still OK. But the meantime before failure is not stted here.

  15. Trent Hamm Trent says:

    Wind turbines are designed for a minimum forty year lifespan, and they’re built with incredible sturdiness. A local school district has been using four turbines for the last fifteen years and they’ve had no maintenance outside of some routine cleaning.

  16. Vincent says:

    I’m with Alexander! Home-made ones are darn cool.


  17. Carl says:

    @Daniel and et al.
    NOISE. Take it from a guy who works for a major electrical contractor that installs the commercial ones in the midwest. They are noisy. Live close to your neighbors? They probably aren’t going to like it that you have a huge noisy prop outside their window. I should record the sound of a windfarm for you sometime.
    Another thing (also speaking with the knowledge of an electrical contractor and a father in the util biz), you may not be allowed to attach it back to the power grid. In fact, you most likely wont. There are various reasons as to why they won’t let you do this, but I’m not going to go into them. At the very least you will need special permission from the utility fellas in your area. A lot of people mistakenly think they can just hook up a wind turbine to their house like nothing, but when the power co. realizes your sending unregulated power back into the grid, they are not going to be happy. So basically you’re going to need a throw-over switch to separate your house from the grid. Did I mention these things don’t put out the same amount of power all the time? So whatever is isolated from the grid is going to be relying on the wind turbine/battery backups. Basically you’re going to need the switching equipment for your house and or part of your house (depending on load you can produce / ect). It’s a lot more complicated than you think it is. Trust me.
    Other than that, I love wind energy, but when the wind stops blowing, and the sun stops shining, you’re gonna need to have some alternative form of energy to keep your lights on.
    Ok, I’ve talked enough.

  18. Carl says:

    Almost forgot. Zoning restrictions need to be taken into consideration.
    Also, I mostly agree with Kurt on the fact that at the moment industrial wind generation is more cost efficient (and resource efficient mind you, for all you environmentally conscious).

  19. deena says:

    In some areas, hybrid solar and wind power systems are combined to provide continuous power supply. This power supply is more stable. Details at http://altenergy.in/windsolarhybrid.html

  20. pf101 says:

    Great post. One of my long-term retirement ideas is to open a hotel/conference center that is self sustaining and one of the things I’ve had in my head is wind power. I think it’s a great idea that more people should act on. I read somewhere recently (can’t find the link) about mini turbines that can be mounted on top of your home and are only a few feet high. You need several of them and you don’t get the same level of output but it helps with some of the noise/zoning nightmares. Once I buy I’ll look into those. Even if they only 1/2 my bill, it would still be nice.

  21. zark says:

    Let’s really get the party started! Take out a 2nd mortgage on your home and get a 20kw turbine ($50k) and a fully electric (possibly conversion) car ($30k) with a 200 mile per charge range and see how much better off you are financially for the rest of your life.

  22. Marius says:

    Here’s something intereseting …

    I know that this solution it’s suitable for deserts, because under the roof life apears.

    Too bad that some people don’t want to see a green Sahara desert …

  23. Jim says:

    Your calculations are off. Mainly your assumption that you could realistically get 650 KwH out of 10 MPH winds. The usable power in the wind goes by the cube of the wind speed. That means if you double the wind speed, you can get 8 times the power out of it. So if you cut the wind speed in half, you have to divide your usable power by 8.

    Actually, there’s a graph on the brochure for the Skystream 3.7 that shows estimated monthly power you could get out of one of their machines, and at 10 MPH it looks pretty close to 240 KwH. At that rate, the return on investment is more like 29.5 years. Where I live grid power costs a lot less than that so it’s even worse. Put that $8500 into an investment and wait a few years until the price on these babies comes down.

    Or, if you like to tinker with these things, building your own really is an option. This isn’t rocket science; the mechanical technology had been around for millenia, and the electronic technology has been around for decades. That otherpower.com web site shows a lot of them that have been done. Complete with pictures, formulas, statistics… I’m looking into this myself.

    To “guest” who is worried about the environmental implications of the materials, you can pretty much make one out of wood and old car parts. With some neodynium magnets and copper wire for the alternator. I’m guessing that would be less environmentally damaging than the coal pollution it would replace.

  24. Rick says:

    From what I have read large windmills carry not only a high price, but when they need maintenance it requires an engineer. This is why in foreign lands, say such as some poor communities in tropical islands in the east where windmills have been donated, they now sit there like statues, unmoving, useless, and with no availability of maintenance to make them truely viable.
    I am quite compelled by Lucien Gambarota’s fairly New Micro Wind Turbine technology. You have to check this out…

    I think this could more effectively put this sort of technology into the general populous’ hands.
    Thank you for the article/blog, Trent, and the opportunity to share ;^)

  25. Jeffrey ward says:

    I purchased a skystream it worked 6 months and made next to nothing for power it quit completly the company SWWP could care less trust me stay clear you wont make power and you will loose your money I am fighting right now and getting no results

  26. Looking At The Costs And Benefits Of Installing A Windmill / Wind Turbine – The Simple Dollar

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