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Does Having a Home Windmill Really Save Money on Energy Costs?

written by: Audrey F. Henderson•edited by: Sarah Malburg•updated: 2/15/2011

Many homeowners consider whether having a home windmill will really save money on their energy costs. A home windmill requires significant upfront costs. However, if your location has the proper conditions and you are prepared to make a long-term investment, you can realize significant savings.

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    Introduction

    As a homeowner, you may have considered going "off the grid." Especially when large heating bills arrive during the winter or even larger cooling bills make summer heat even more unbearable, generating your own electric power can seem appealing. If you are prepared to make a significant initial investment, your home windmill can really save money on energy costs in the long run, as well as reducing your household's carbon footprint. You may even qualify for a credit on your federal income tax return or a state-issued rebate to help offset your upfront costs.

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    Requirements for Installing a Home Windmill

    Windmill Electricity Generator -- Dominic's Pics Photostream The initial investment for a home windmill can be steep, averaging $8,000 to more than $10,000 as of February 2011. Homeowners must also consider the cost to connect the windmill to the local power grid if they wish to sell excess power or use the power grid as a backup when wind speeds are insufficient to generate power. The cost to run a power line from a remote site to a power grid can run from $15,000 to $50,000 per mile or more, with hilly terrain incurring more costs than a flat landscape, according to the U.S. Department of Energy Wind and Water Power Program.

    Your location must have an average wind speed of at least 10 mph. or 4.5 m/s to make wind energy logistically and economically feasible. Position the windmill well away from your own home as well as those of your neighbors, to avoid possible complaints about low-level noise or the aesthetics of the windmill. Windmill installation should allow sufficient clearance above trees, buildings or other landscape features. Many windmill manufacturers also recommend a minimum of an acre of land. Taller windmills generate more energy, but some local ordinances limit the allowed height for a home windmill, or prohibit them entirely. Additionally, installing home windmills is presently not practical in most densely-populated urban areas, although Blue Green Pacific, a San Francisco-based startup company has developed small windmills for rooftop installation, CNN reports.

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    Energy Savings

    A single home windmill can really save money once a homeowner has made the initial investment. A single home windmill can generate nearly all of an average household's electricity needs every year. With those kind of savings, the investment pays for itself within four to twelve years, according to Engadget. So-called "smart" systems automatically alternate between windmill power and electricity from the local grid to maximize savings while maintaining a consistent power supply. Some local power companies may also purchase your excess electric power under the terms of The National Energy Policy Act of 1992 and the 1978 Public Utilities Regulatory Policy Act (PURPA), the U.S. Department of Energy Wind and Water Power Program states.

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    Federal Tax Credits and State Rebates

    Among the benefits of the 2009 American Recovery and Re-investment Act, better known as the stimulus plan, is a federal tax credit for 30 percent of the installed cost of an individual windmill for homeowners and businesses that have tax liability during the following two years. The tax credit was extended in 2010 to remain in effect until 2016. File form 5695 with federal tax form 1040 to claim the credit, which applies to primary and secondary residences, but not to rentals. Many states also offer rebates for homeowners who install home windmills on their property, according to the U.S. Department of Energy Wind and Water Power Program.

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    References

    • Bridget Huber. With Tax Credit, Consumers Give Turbines, Solar Panels a Second Look in The Christian Science Monitor, retrieved at http://www.csmonitor.com/Business/2009/0413/with-tax-credit-consumers-give-turbines-solar-panels-a-second-look
    • Chris Brooke. Green Homeowner Hit With Noise Abatement Order Because 40ft. Wind Turbine Is Driving His Neighbours Mad, in Mail Online, retrieved at http://www.dailymail.co.uk/news/article-1187936/Green-homeowner-hit-noise-abatement-order-40ft-wind-turbine-driving-neighbours-mad.html
    • Energy.gov, Consumer Energy Tax Incentives, at http://www.energy.gov/taxbreaks.htm
    • Energy Star, 2011 Federal Tax Credits for Consumer Energy Efficiency -- Frequent Questions, at http://energystar.supportportal.com/ics/support/default.asp?deptID=23018&task=knowledge&questionID=16629
    • Evan Blass. Residential Windmill Saves Money, the Environment, in Engadget, retrieved at http://www.engadget.com/2006/07/05/residential-windmill-saves-money-the-environment/
    • Skystream, FAQ -- U.S. Small Wind Tax Credit, at http://www.skystreamenergy.com/will-skystream-work/tax_faq.php
    • Skystream, Resources -- Installation, at http://www.skystreamenergy.com/resources/installation.php
    • U.S. Department of Energy Wind and Water Power Program, 80-Meter Wind Maps and Wind Resource Potential, at http://www.windpoweringamerica.gov/wind_maps.asp
    • William Armsby. Stimulus May Get Small Wind Turbines Spinning, in CNN Tech, retrieved at http://articles.cnn.com/2009-03-09/tech/small.wind.turbines_1_wind-turbines-american-wind-energy-association-small-businesses?_s=PM:TECH
    • U.S. Department of Energy Wind and Water Power Program, Frequently Asked Questions on Small Wind Systems, at http://www1.eere.energy.gov/windandhydro/small_wind_system_faqs.html
    • Windmill Electricity Generator, in Dominic's Pics Photostream, retrieved at http://www.flickr.com/photos/dominicspics/3289290886/
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    Resources

    • Home-Windmill.com, Wind Energy Resources, at http://www.home-windmill.com/wind-energy-resources.html
    • IRS.gov, form 5695, Residential Energy Credits, at http://www.irs.gov/pub/irs-pdf/f5695.pdf
    • Skystream, Rebates, Incentives and Wind Maps, at http://skystreamenergy.com/will-skystream-work/localresources.php
    • U.S. Department of Energy Energy Efficiency and Renewable Energy, Database of State Incentives for Renewals and Efficiency, at http://www.dsireusa.org/
    • Wind and Energy Resource Atlas of the United States, at http://rredc.nrel.gov/wind/pubs/atlas/