Paying for wind energy just doesn’t add up
www.sctimes.com 15 April 2011www.sctimes.com 15 April 2011
www.sctimes.com 15 April 2011www.sctimes.com 15 April 2011
Not wishing to pour cold water on enthusiasm for the VA wind turbine project (“Our View: VA’s turbine makes good case study,” April 3) nor desirous of being a spoilsport on the potential of wind energy, I must nonetheless take issue with the conclusion of the 25-year payback period.
Where does the money to finance the wind turbine come from? At a cost of $2.3 million and a projected annual energy savings of $89,000, that amounts to a little less than 4 percent return on investment.
Much like the city of St. Paul and its analysis of solar panels on public buildings, this amount calculated recoup of the initial cost minus any cost for the money to create the power source.
Granted, energy costs are increasing and alternative energy sources should be researched and tested, but a 25-year payback period, given the numbers, is unrealistic.
At 2.5 percent interest my calculations leave $31,500 annually to amortize the $2.3 million cost, taking 73 years, and at 3 percent loan interest there is only $20,000 of the $89,000 left for loan payback. That equals 115 years to recover the initial investment.
Even if this was paid for with a government grant, there is no free lunch. Somebody has to pay the cost of providing the input cash. Energy costs will certainly continue to escalate and likely improve the payback scenario, but anyone contemplating such projects must recognize that there is interest on the investment to be paid when considering feasibility.
Mike Foley, Sauk Centre
URL to article: https://www.wind-watch.org/news/2011/04/15/paying-for-wind-energy-just-doesnt-add-up/