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How long does a wind farm take to pay for itself off?

A commercial wind farm is a large-scale facility for generating electricity that sells the power it generates. The time period it takes for a commercial wind farm to reach payoff, also known as the payback period, varies depending on a number of factors.


The payback period is the amount of time it takes for the revenues generated by a wind farm to equal the initial cost of construction. Factors that can affect the payback period include the cost of the wind turbines, the cost of land, the cost of transmission infrastructure, and the price of electricity.


According to a 2017 report by the National Renewable Energy Laboratory (NREL), the average payback period for a commercial wind farm in the United States is around 7-12 years. However, the payback period can be as short as 4 years or as long as 20 years depending on the specific project and market conditions.


The cost of wind turbines is a major factor that can affect the payback period.

According to a 2019 article in the Journal of Cleaner Production, advances in technology and economies of scale have helped make wind turbines cheaper over time. This has led to a decrease in the payback period for wind farm projects.


The cost of land can also affect the payback period. According to a 2020 report by the International Renewable Energy Agency (IRENA), the cost of land for wind farm projects can vary widely depending on location and availability. In some areas, the cost of land can be a significant portion of the overall project cost, which can increase the payback period.


The cost of transmission infrastructure can also affect the payback period. According to a 2018 report by the Energy Information Administration (EIA), the cost of building transmission lines to connect wind farm projects to the grid can be a significant portion of the overall project cost. This can increase the payback period, particularly for projects located in remote areas.


The price of electricity can also affect the payback period. According to a 2016 report by the American Wind Energy Association (AWEA), the price of electricity is a major factor in determining the economic feasibility of a wind farm project. When the price of electricity is high, the revenues generated by a wind farm will be greater, which can decrease the payback period.


In summary, the time period it takes for a commercial wind farm to reach payoff, also known as the payback period, varies depending on a number of factors such as the cost of the wind turbines, the cost of land, the cost of transmission infrastructure, and the price of electricity. According to the National Renewable Energy Laboratory (NREL), the average payback period for a commercial wind farm in the United States is around 7-12 years. The payback period for a project can vary greatly, depending on the specific market and conditions. For example, some projects might have short payback periods of 3 years or less; meanwhile others may require up to 20 years before they break even.


Citations:

  1. National Renewable Energy Laboratory (NREL), "Wind Energy Finance in the United States," (2017).

  2. Journal of Cleaner Production, "Advances in wind turbine technology: A review," (2019).

  3. International Renewable Energy Agency (IRENA), "Renewable Cost Database," (2020).

  4. Energy Information Administration (EIA), "Transmission Infrastructure Development," (2018).

  5. American Wind Energy Association (AWEA), "Wind Energy Industry Report," (2016).

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