TULLY,
N.Y. — Three years ago, Ed Doody and his brothers, Kevin and Rich,
installed a wind turbine at the dairy farm they operate here, looking to
cut electric bills. They were so happy with the results that each got a
turbine for his home, visible from the farm, which overlooks rolling
hills and orchards.
“They
are just the runningest little things you ever did see,” Kevin Doody
said last month of the home turbines, standing near the red-and-white
barns that house their 350 Holsteins. Since installing the turbine about
a year ago, he said, his electric bill has essentially “gone to zero.”
The
Doody brothers are but a few of the small-business owners and rural
residents around the country who are beginning to turn to wind in their
efforts to save money and embrace renewable energy. Although rooftop
solar systems have spread rapidly throughout the country over the last
eight years — spurred by providers offering home systems free — wind energy has generally remained the province of industrial-scale operations providing power to utilities and big businesses.
But
now, a start-up called United Wind is applying the rooftop solar model
to wind, installing and maintaining systems at little to no upfront cost
to the customer. As with the solar systems from companies like
SolarCity and Sunrun, customers sign long-term agreements to buy the
electricity the systems produce at prices set below those from their
local utility. Most of the company’s customers, including the Doodys,
are in rural areas like central and western New York, but the firm is
rapidly expanding its reach.
The
company, which was formed in 2013 in New York through the combination
of a leading distributor of small turbines and a digital site-assessment
business, has raised about $40 million in project financing — including
$13.5 million announced in October from the NY Green Bank, a
state-sponsored investment fund, and U.S. Bank — and signed about 125
leases. Executives said they were in talks for a significantly larger
investment that would allow United Wind to develop about 1,000 more
projects in the Midwest.
“The
small-wind market was small — it hadn’t really taken off the way solar
had,” said Russell Tencer, the chief executive, who founded the
site-assessment company, Wind Analytics, in 2009. “What we realized was
that with that intelligence and software we could offer that same type
of one-stop-shop solution that solar has packaged to finance solar.”
Distributors have sold small and medium-size wind turbines
for the last three decades. Their spread has been slow, although there
are signs that may be changing. According to a report this year from
Navigant Research, worldwide revenue from the turbines — defined as
anything under 500 kilowatts — will grow to nearly $2.4 billion in 2023
from $1 billion in 2015, in part spurred by the development of the lease
model. Still, the United States is expected to remain far behind
leaders like Britain, China and Italy, with only $216 million in revenue
by 2023.
Over
the decades, the American market has waxed and waned, said Jennifer
Jenkins, executive director of the Distributed Wind Energy Association, a
trade group that focuses on wind energy that is generated and used on
site. But the market has grown from something originally aimed at
remote, off-grid and island communities to something that the group
hopes can reach 30 gigawatts worth of installations by 2030, up from 906
megawatts, reflecting 74,000 turbines installed across the 50 states by
the end of 2014, according to the Department of Energy.
Having
recognizable companies like Honda, Walmart and Anheuser-Busch install
wind turbines at highly visible facilities helps, making distributed
wind a more mainstream symbol of green energy, Ms. Jenkins said.
Turbines are also sprouting up on office buildings and at locations as
diverse as Logan Airport in Boston, Lincoln Financial Field in
Philadelphia and even at the Eiffel Tower, where two turbines are
nestled.
But
United Wind’s leasing approach is also a big part of reaching that
goal. “I think they’re going to transform the market, and we’re going to
be able to get to these potential numbers that we’ve been forecasting
for a long time,” she said.
The
finance community is beginning to see it the same way. New York’s Green
Bank is supporting the company’s efforts with a $4 million loan to help
finance construction because the business model seems viable.
“We
only want to support those transaction types where we think there is a
bridge to somewhere rather than a bridge to nowhere,” said Alfred
Griffin, the bank’s president.
Toward
that end, United Wind is going after a specific band of the market. The
company has installed 10- to 100-kilowatt machines and focuses on rural
farms, homes and small businesses with enough wind, space and demand
for electricity to make the economics make sense, but where the
likelihood of community opposition is low.
The
turbines are much smaller and, often mounted on open-lattice towers,
can appear lighter than the behemoths typically used on large wind
farms. Still, they can be noisy and create a visual intrusion on a
landscape. The Doody brothers said they had heard little objection.
“We
want to focus on these rural areas where it fits perfectly into the
setting, and it’s not going to be like this suburban housing development
where people can complain,” Mr. Tencer said.
Customers
typically see savings of at least 10 percent over power provided by a
public utility and, as with solar leases, can save even more if they
prepay all or part of their contract to avoid the annual rate increases,
1.9 percent in United Wind’s contracts. In all, a typical homeowner
will save $20,000 and a typical farm $200,000 over the life of the
lease, generally 20 years.
The
Doodys, who did not want to offer specifics on their savings, said the
installations had proved successful, covering two-thirds of the power
needed to run their twice-daily milking operation and producing even
more electricity than anticipated for the farm and their homes. Rather
than send the excess back to the utility for a small fee — the Doodys
say they earn about 4 cents per kilowatt-hour but pay 14 cents to buy
power — Kevin Doody recently installed on-demand hot water to use it up.
“I just didn’t like the thought of giving it back to them,” he said.
And
the home turbine has cut the cost of running Ed Doody’s swimming pool
and practically eliminated the need for his wood-burning boiler system.
“I’m
getting older every year, and it just gets tougher” to cut wood and
feed the machine, he said. “It’s dirty and messy, and you have to
maintain it — every six or eight hours you have to go throw more wood in
the thing. So that’s been an unseen advantage.”
Source: http://www.nytimes.com/2015/12/19/business/energy-environment/wind-power-spreads-through-turbines-for-lease.html?ref=energy-environment
Source: http://www.nytimes.com/2015/12/19/business/energy-environment/wind-power-spreads-through-turbines-for-lease.html?ref=energy-environment
