A

Montana 

Consumer’s Guide

Small Wind Electric Systems
Small Wind Electric Systems

Cover photo: Small wind turbines, like this 10-kW Bergey Excel, can be used to supplement your home’s electricity 

supply to help lower your utility bills. 

Photo credit — Jim Tracy, National Center for Appropriate Technology/PIX12434
Small Wind Electric Systems 

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

First, How Can I Make My Home More Energy Efficient? . . . . . 2

Is Wind Energy Practical for Me? . . . . . . . . . . . . . . . . . . . . . . . 3

What Size Wind Turbine Do I Need? . . . . . . . . . . . . . . . . . . . . 4

What are the Basic Parts of a Small Wind Electric System? . . . 5

What Do Wind Systems Cost? . . . . . . . . . . . . . . . . . . . . . . . . . 7

Where Can I Find Installation and Maintenance Support? . . . . 8

How Much Energy Will My System Generate? . . . . . . . . . . . . . 9

Is There Enough Wind on My Site? . . . . . . . . . . . . . . . . . . . . 11

How Do I Choose the Best Site for My Wind Turbine? . . . . . . 14

Can I Connect My System to the Utility Grid? . . . . . . . . . . . . 15

Can I Go “Off-Grid”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

For More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Small Wind Electric Systems

A U.S. Consumer’s Guide

Homeowners, ranchers, and small businesses can use windgenerated electricity to reduce their utility bills. This gridconnected system installed for a home in Norman, Oklahoma,

reduces the homeowner’s utility bill by $100 per month.

Bergey Windpower/PIX01476

Introduction

Can I use wind energy to power my 

home? This question is being asked 

across the country as more people 

look for affordable and reliable sources of electricity. 

Small wind electric systems can make 

a significant contribution to our 

nation’s energy needs. Although wind 

turbines large enough to provide a 

significant portion of the electricity 

needed by the average U.S. home generally require one acre of property or 

more, approximately 21 million U.S. 

homes are built on one-acre and larger 

sites, and 24% of the U.S. population 

lives in rural areas.

A small wind electric system will 

work for you if:

• There is enough wind where you 

live 

• Tall towers are allowed in your 

neighborhood or rural area 

• You have enough space

• You can determine how much 

electricity you need or want to 

produce 

• It works for you economically. 

The purpose of this guide is to provide you with the basic information 

about small wind electric systems to 

help you decide if wind energy will 

work for you. 

Why Should I Choose Wind?

Wind energy systems are one 

of the most cost-effective homebased renewable energy systems. 

Depending on your wind resource, a 
 Small Wind Electric Systems

small wind energy system can lower 

your electricity bill by 50% to 90%, 

help you avoid the high costs of 

extending utility power lines to 

remote locations, prevent power 

interruptions, and it is nonpolluting. 

How Do Wind Turbines Work?

Wind is created by the unequal heating of the Earth’s surface by the sun. 

Wind turbines convert the kinetic 

energy in wind into mechanical 

power that runs a generator to 

produce clean electricity. Today’s 

turbines are versatile modular sources 

of electricity. Their blades are aerodynamically designed to capture the 

maximum energy from the wind. The 

wind turns the blades, which spin a 

shaft connected to a generator that 

makes electricity.

First, How Can I Make 

My Home More Energy 

Efficient? 

Before choosing a wind system for 

your home, you should consider 

reducing your energy consumption by 

making your home or business more 

energy efficient. Reducing your 

energy consumption will significantly lower your utility bills and will 

reduce the size of the home-based 

renewable energy system you need. 

To achieve maximum energy efficiency, you should take a wholebuilding approach. View your home 

as an energy system with interrelated 

parts, all of which work synergistically to contribute to the efficiency 

of the system. From the insulation in 

your home’s walls to the light bulbs 

in its fixtures, there are many ways to 

make your home more efficient. 

• Reduce your heating and 

cooling needs by up to 30% by 

investing just a few hundred 

dollars in proper insulation and 

weatherization products. 

• Save money and increase 

comfort by properly maintaining 

and upgrading your heating, 

ventilation, and air-conditioning 

systems. 

• Install double-paned, gas-filled 

windows with low-emissivity 

(low-e) coatings to reduce heat 

loss in cold climates and spectrally 

selective coatings to reduce heat 

gain in warm climates. 

• Replace your lights in high-use 

areas with fluorescents. Replacing 

25% of your lights can save about 

50% of your lighting energy bill. 

• When shopping for appliances, 

look for the Energy Star® label. 

Energy Star® appliances have 

been identified by the U.S. 

Environmental Protection Agency 

and U.S. Department of Energy 

as being the most energy-efficient 

products in their classes.

• For more information on how to 

make your home energy efficient, 

see Energy Savers in the For More 

Information section.

Lighting,

cooking,

and other

appliances

33%

Refrigerator 9%

Heating and

cooling

44%

Water

heating

14%

02979309m

Home Energy Use

Based on national averages

The largest portion of a utility bill for a typical

house is for heating and cooling.
Small Wind Electric Systems 

Is Wind Energy Practical 

for Me?

A small wind energy system can 

provide you with a practical and 

economical source of electricity if: 

• your property has a good wind 

resource

• your home or business is located on 

at least one acre of land in a rural 

area 

• your local zoning codes or 

covenants allow wind turbines

• your average electricity bills are 

$150 per month or more

• your property is in a remote 

location without easy access to 

utility lines 

• you are comfortable with long-term 

investments.

Zoning Issues

Before you invest in a wind energy 

system, you should research potential obstacles. Some jurisdictions, for 

example, restrict the height of the 

structures permitted in residentially 

zoned areas, although variances are 

often obtainable. Most zoning ordinances have a height limit of 35 feet. 

You can find out about the zoning 

restrictions in your area by calling 

the local building inspector, board of 

supervisors, or planning board. They 

can tell you if you will need to obtain 

a building permit and provide you 

with a list of requirements. 

In addition to zoning issues, your 

neighbors might object to a wind 

machine that blocks their view, or 

they might be concerned about noise. 

Most zoning and aesthetic concerns 

can be addressed by supplying objective data. For example, the ambient 

noise level of most modern residential 

wind turbines is around 52 to 55 decibels. This means that while the sound 

of the wind turbine can be picked out 

of surrounding noise if a conscious 

effort is made to hear it, a residentialsized wind turbine is no noisier than 

your average refrigerator.

In Clover Valley,

Minnesota, this

3-kW Whisper

H175 turbine on a

50-foot tower is

connected to the

utility grid to offset

the farm’s utilitysupplied electricity. World Power Technology/PIX07168
 Small Wind Electric Systems

What Size Wind Turbine 

Do I Need?

The size of the wind turbine you need 

depends on your application. Small 

turbines range in size from 20 watts 

to 100 kilowatts (kW). The smaller or 

“micro” (20- to 500-watt) turbines are 

used in a variety of applications such 

as charging batteries for recreational 

vehicles and sailboats.

One- to 10-kW turbines can be used in 

applications such as pumping water. 

Wind energy has been used for centuries to pump water and grind grain. 

Although mechanical windmills still 

provide a sensible, low-cost option 

for pumping water in low-wind areas, 

farmers and ranchers are finding that 

wind-electric pumping is a little more 

versatile and they can pump twice 

the volume for the same initial 

investment. In addition, mechanical 

windmills must be placed directly 

above the well, which may not take 

the best advantage of available wind 

resources. Wind-electric pumping 

systems can be placed where the wind 

resource is the best and connected to 

the pump motor with an electric cable. 

Turbines used in residential applications can range in size from 400 watts 

to 100 kW (100 kW for very large 

loads), depending on the amount of 

electricity you want to generate. For 

residential applications, you should 

establish an energy budget to help 

define the turbine size you will need. 

Because energy efficiency is usually 

less expensive than energy production, making your house more energy 

efficient first will probably be more 

cost effective and will reduce the size 

of the wind turbine you need (see 

How Can I Make My Home More 

Energy Efficient?). Wind turbine 

manufacturers can help you size 

your system based on your electricity 

needs and the specifics of local wind 

patterns.

A typical home uses approximately 

10,000 kilowatt-hours (kWh) of electricity per year (about 830 kWh per 

month). Depending on the average 

wind speed in the area, a wind turbine rated in the range of 5 to 15 kW 

would be required to make a significant contribution to this demand. A 

1.5- kW wind turbine will meet the 

needs of a home requiring 300 kWh 

per month in a location with a 14-

mile-per-hour (6.26-meters-per-second) annual average wind speed. The 

manufacturer can provide you with 

the expected annual energy output 

of the turbine as a function of annual 

average wind speed. The manufacturer will also provide information on 

the maximum wind speed at which 

the turbine is designed to operate 

safely. Most turbines have automatic 

overspeed-governing systems to keep 

the rotor from spinning out of control 

in very high winds. This information, 

along with your local wind speed and 

your energy budget, will help you 

decide which size turbine will best 

meet your electricity needs. 

This 1-kW Whisper

turbine provides

direct AC power for

the water pump for

stock tanks on a

ranch in Wheeler,

Texas.

Elliott Bayly/PIX09681
Small Wind Electric Systems 

What are the Basic Parts 

of a Small Wind Electric 

System?

Home wind energy systems generally comprise a rotor, a generator or 

alternator mounted on a frame, a tail 

(usually), a tower, wiring, and the 

“balance of system” components: 

controllers, inverters, and/or batteries. Through the spinning blades, the 

rotor captures the kinetic energy of 

the wind and converts it into rotary 

motion to drive the generator.

Wind Turbine

Most turbines manufactured today 

are horizontal axis upwind machines 

with two or three blades, which are 

usually made of a composite material 

such as fiberglass. 

The amount of power a turbine will 

produce is determined primarily by 

the diameter of its rotor. The diameter 

of the rotor defines its “swept area,” 

or the quantity of wind intercepted by 

the turbine. The turbine’s frame is the 

structure onto which the rotor, generator, and tail are attached. The tail 

keeps the turbine facing into the wind.

Tower

Because wind speeds increase with 

height, the turbine is mounted on 

a tower. In general, the higher the 

tower, the more power the wind 

system can produce. The tower also 

raises the turbine above the air 

turbulence that can exist close to 

the ground because of obstructions 

such as hills, buildings, and trees. A 

general rule of thumb is to install a 

wind turbine on a tower with the bottom of the rotor blades at least 30 feet 

(9 meters) above any obstacle that 

is within 300 feet (90 meters) of the 

tower. Relatively small investments in 

increased tower height can yield very 

high rates of return in power production. For instance, to raise a 10-kW 

generator from a 60-foot tower height 

to a 100-foot tower involves a 10% 

increase in overall system cost, but it 

can produce 29% more power. 

There are two basic types of towers: self-supporting (free standing) 

and guyed. Most home wind power 

systems use a guyed tower. Guyed 

towers, which are the least expensive, 

can consist of lattice sections, pipe, or 

tubing (depending on the design), and 

supporting guy wires. They are easier 

to install than self-supporting towers. However, because the guy radius 

must be one-half to three-quarters 

of the tower height, guyed towers 

require enough space to accommodate

them. Although tilt-down towers are 

more expensive, they offer the consumer an easy way to perform 

maintenance on smaller light-weight 

turbines, usually 5 kW or less. 

02979312m

Rotor

Tail

Tower

Generator/ 

alternator

02979311m

Tilt-Down Tower

Tilt-up tower

in the normal

operating Tilt-up tower in the position

lowered position for

maintenance or 

hurricanes

Tilt-down towers

provide easy

maintenance for

turbines.
 Small Wind Electric Systems

Tilt-down towers can also be lowered to the ground during hazardous weather such as hurricanes. 

Aluminum towers are prone to 

cracking and should be avoided. 

Most turbine manufacturers provide 

wind energy system packages that 

include towers. 

Mounting turbines on rooftops is not 

recommended. All wind turbines 

vibrate and transmit the vibration

 to the structure on which they are 

mounted. This can lead to noise and 

structural problems with the building, 

and the rooftop can cause excessive 

turbulence that can shorten the life of 

the turbine. 

Balance of System

The parts that you need in addition 

to the turbine and the tower, or the 

balance of system parts, will depend 

on your application. Most manufacturers can provide you with a system 

package that includes all the parts you 

need for your application. For example, the parts required for a water 

pumping system will be much different than what you need for a residential application. The balance of system 

required will also depend on whether 

the system is grid-connected, standalone, or part of a hybrid system. 

For a residential grid-connected 

application, the balance of system 

parts may include a controller, storage 

batteries, a power conditioning unit 

(inverter), and wiring. Some wind 

turbine controllers, inverters, or other 

electrical devices may be stamped 

by a recognized testing agency, like 

Underwriters Laboratories. 

Stand-Alone Systems

Stand-alone systems (systems not 

connected to the utility grid) require 

batteries to store excess power generated for use when the wind is calm. 

They also need a charge controller to 

keep the batteries from overcharging. 

Deep-cycle batteries, such as those 

used for golf carts, can discharge 

and recharge 80% of their capacity 

hundreds of times, which makes them 

a good option for remote renewable 

energy systems. Automotive batteries 

are shallow-cycle batteries and should 

not be used in renewable energy 

systems because of their short life 

in deep-cycling operations. 

A Bergey XL.10,

10-kW wind

turbine is part of

a grid-connected

wind/photovoltaic

hybrid system that

reduces the utility

power used by this

home in Vermont. 

The balance of

system (upper right)

includes from left

to right, a Trace

inverter for the

PV system, a

breaker box, and a

Powersync inverter

for the wind system. 

Trudy Forsyth, NREL/PIX09122 and PIX09123
Small Wind Electric Systems 

Small wind turbines generate direct 

current (DC) electricity. In very small

systems, DC appliances operate 

directly off the batteries. If you want to 

use standard appliances that use conventional household alternating current (AC), you must install an inverter 

to convert DC electricity from the 

batteries to AC. Although the inverter 

slightly lowers the overall efficiency 

of the system, it allows the home to 

be wired for AC, a definite plus with 

lenders, electrical code officials, and 

future homebuyers. 

For safety, batteries should be isolated from living areas and electronics because they contain corrosive 

and explosive substances. Lead-acid 

batteries also require protection from

temperature extremes. 

Grid-Connected Systems

In grid-connected systems, the only 

additional equipment required is a 

power conditioning unit (inverter) 

that makes the turbine output electrically compatible with the utility grid. 

Usually, batteries are not needed. 

What Do Wind Systems 

Cost?

Installation costs vary greatly depending on local zoning, permitting, 

and utility interconnection costs. 

According to the American Wind 

Energy Association, small wind 

energy systems cost from $3,000 to 

$5,000 for every kilowatt of generating 

capacity. This is much cheaper than 

solar electric systems, but the payback 

period can still be lengthy.

Wind energy becomes more cost effective as the size of the turbine’s rotor 

increases. Although small turbines 

cost less in initial outlay, they are 

proportionally more expensive. The 

cost of an installed residential wind 

energy system with an 80-foot tower, 

batteries, and inverter typically 

ranges from $15,000 to $50,000 for 

a 3- to 10-kW wind turbine.

Although wind energy systems 

involve a significant initial investment, they can be competitive with 

conventional energy sources when 

you account for a lifetime of reduced 

or avoided utility costs. The length 

of the payback period—the time 

before the savings resulting from your 

system equal the cost of the system 

itself—depends on the system you 

choose, the wind resource on your 

site, electricity costs in your area, and 

how you use your wind system. For 

example, if you live in California and 

have received the 50% buydown of 

your small wind system, have net 

metering, and an average annual 

wind speed of 15 miles per hour 

(mph) (6.7 meters per second [m/

s]), your simple payback would be 

approximately 6 years.

A Southwest

Windpower Air

303, 300-watt

turbine is the sole

source of electricity

for this remote

home in northern

Arizona. Southwest Windpower/PIX09156
 Small Wind Electric Systems

Things to Consider When 

Purchasing a Wind Turbine

Once you determine you can install 

a wind energy system in compliance 

with local land use requirements, you 

can begin pricing systems and components. Comparatively shop for a wind 

system as you would any major purchase. Obtain and review the product 

literature from several manufacturers. 

As mentioned earlier, lists of manufacturers are available from AWEA, 

(see For More Information), but not 

all small turbine manufacturers are 

members of AWEA. Check the yellow 

pages for wind energy system dealers 

in your area. 

Once you have narrowed the field, 

research a few companies to be sure 

they are recognized wind energy 

businesses and that parts and service 

will be available when you need them. 

You may wish to contact the Better 

Business Bureau to check on 

the company’s integrity and ask for 

references of past customers with 

installations similar to the one you are 

considering. Ask the system owners 

about performance, reliability, and 

maintenance and repair requirements, 

and whether the system is meeting 

their expectations. Also, find out how 

long the warranty lasts and what it 

includes.

Where Can I Find 

Installation and 

Maintenance Support?

The manufacturer/dealer should be 

able to help you install your machine. 

Many people elect to install the 

machines themselves. Before attempting to install your wind turbine, ask 

yourself the following questions:

• Can I pour a proper cement 

foundation?

• Do I have access to a lift or a way of 

erecting the tower safely?

• Do I know the difference between 

AC and DC wiring?

• Do I know enough about electricity 

to safely wire my turbine?

• Do I know how to safely handle 

and install batteries?

If you answered no to any of the 

above questions, you should probably 

choose to have your system installed 

by a system integrator or installer. 

Contact the manufacturer for help 

or call your state energy office and 

local utility for a list of local system 

installers. You can also check the yellow pages for wind energy system 

service providers. A credible installer 

will provide many services such as 

permitting. Find out if the installer is a 

licensed electrician. Ask for references 

and check them out. You may also 

want to check with the Better Business 

Bureau.

Although small wind turbines are 

very sturdy machines, they do require 

Small wind

turbines like this

10-kW Bergey

XL.10 provide

electricity for

home, farm, and

ranch applications.

Warren Gretz, NREL/PIX09615
Small Wind Electric Systems 

some annual maintenance. Bolts 

and electrical connections should be 

checked and tightened if necessary. 

The machines should be checked for 

corrosion and the guy wires for 

proper tension. In addition, you 

should check for and replace any 

worn leading edge tape on the blades, 

if appropriate. After 10 years, the 

blades or bearings may need to be 

replaced, but with proper installation 

and maintenance, the machine should 

last up to 20 years or longer. 

If you do not have the expertise to 

maintain the machine, your installer 

may provide a service and maintenance program.

How Much Energy Will My 

System Generate?

Most U.S. manufacturers rate their 

turbines by the amount of power they 

can safely produce at a particular 

wind speed, usually chosen between 

24 mph (10.5 m/s) and 36 mph (16 m/

s). The following formula 

illustrates factors that are important 

to the performance of a wind turbine. 

Notice that the wind speed, V, has an 

exponent of 3 applied to it. This 

means that even a small increase in 

wind speed results in a large increase 

in power. That is why a taller tower 

will increase the productivity of any 

wind turbine by giving it access to 

higher wind speeds as shown in the 

Wind Speeds Increase with Height 

graph. The formula for calculating 

the power from a wind turbine is:

 Power = k Cp 1/2 ρ A V3

Where:

P = Power output, kilowatts

Cp = Maximum power coefficient, 

 ranging from 0.25 to 0.45, 

 dimension less (theoretical 

 maximum = 0.59)

ρ = Air density, lb/ft3

A = Rotor swept area, ft2 or 

 π D2/4 (D is the rotor 

 diameter in ft, π = 3.1416)

V = Wind speed, mph

k = 0.000133 A constant to yield 

 power in kilowatts. (Multiplying 

 the above kilowatt answer by 

 1.340 converts it to horse-

 power [i.e., 1 kW = 1.340 

 horsepower]).

The rotor swept area, A, is important 

because the rotor is the part of the 

turbine that captures the wind energy. 

8

7

6

5

4

3

2

1

0

1 2 3 4 5 6 7

Rotor Diameter, m

Rotor Diameter, m

Relative Size of Small Wind Turbines

40

30

20

10

0

Swept area, m2

7 m

6 m

5 m

4 m

3 m

2 m

1 m

02979303m

Source: Paul Gipe, Wind Energy Basics
10 Small Wind Electric Systems

So, the larger the rotor, the more 

energy it can capture. The air density, 

ρ, changes slightly with air temperature and with elevation. The ratings 

for wind turbines are based on 

standard conditions of 59° F (15° C) 

at sea level. A density correction 

should be made for higher elevations 

as shown in the Air Density Change 

with Elevation graph. A correction for 

temperature is typically not needed 

for predicting the long-term performance of a wind turbine. 

Although the calculation of wind 

power illustrates important features 

about wind turbines, the best measure of wind turbine performance is 

annual energy output. The difference 

between power and energy is that 

power (kilowatts [kW]) is the rate at 

which electricity is consumed, while 

energy (kilowatt-hours [kWh]) is the 

quantity consumed. An estimate of 

the annual energy output from your 

wind turbine, kWh/year, is the best 

way to determine whether a particular 

wind turbine and tower will produce 

enough electricity to meet your needs. 

A wind turbine manufacturer can help

you estimate the energy production 

you can expect. They will use a calculation based on the particular wind 

turbine power curve, the average 

annual wind speed at your site, the 

height of the tower that you plan to 

use, and the frequency distribution of 

the wind–an estimate of the number 

of hours that the wind will blow at 

each speed during an average year. 

They should also adjust this calculation for the elevation of your site. 

Contact a wind turbine manufacturer 

or dealer for assistance with this 

calculation.

To get a preliminary estimate of the 

performance of a particular wind turbine, use the formula below. 

 AEO = 0.01328 D2

 V3

Where:

AEO = Annual energy output, 

 kWh/year

D = Rotor diameter, feet

V = Annual average wind speed, 

 mph

The Wind Energy Payback Period 

Workbook found at www.nrel.gov/

wind/docs/spread_sheet_Final.xls is 

a spreadsheet tool that can help you 

analyze the economics of a small wind 

electric system and decide whether 

wind energy will work for you. The 

spreadsheet can be opened using 

Microsoft Excel 95 software. It asks 

you to provide information about how 

you’re going to finance the system, 

the characteristics of your site, and 

the properties of the system you’re 

considering. It then provides you with 

a simple payback estimation in years. 

If it takes too long to regain your capital investment—the number of years 

comes too close or is greater than the 

life of the system—wind energy will 

not be practical for you.

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

70 75 80 85 90 95 100

Density change compared to sea level, %

Elevation, ft

Air Density Change with Elevation

02979302m
Small Wind Electric Systems 11

Is There Enough Wind 

on My Site?

Does the wind blow hard and consistently enough at my site to make a 

small wind turbine system economically worthwhile? That is a key question and not always easily answered. 

The wind resource can vary significantly over an area of just a few miles 

because of local terrain influences

 on the wind flow. Yet, there are steps 

you can take that will go a long way 

towards answering the above 

question.

As a first step, wind resource maps 

like the one on pages 12 and 13 can

 be used to estimate the wind resource 

in your region. The highest average 

wind speeds in the United States are 

generally found along seacoasts, on 

ridgelines, and on the Great Plains; 

however, many areas have wind 

resources strong enough to power a 

small wind turbine economically. The 

wind resource estimates on this map 

generally apply to terrain features that 

are well exposed to the wind, such as 

plains, hilltops, and ridge crests. Local 

terrain features may cause the wind 

resource at a specific site to differ considerably from these estimates. More 

detailed wind resource information, 

including the Wind Energy Resource 

Atlas of United States, published by the 

U.S. Department of Energy (DOE), 

can be found at the National Wind 

Technology Center Web site at www.

nrel.gov/wind/ and the DOE Wind 

Powering America Web site at www.

windpoweringamerica.gov.

Another way to indirectly quantify 

the wind resource is to obtain average 

wind speed information from a 

nearby airport. However, caution 

should be used because local terrain 

influences and other factors may 

cause the wind speed recorded at 

an airport to be different from your 

particular location. Airport wind data 

are generally measured at heights 

about 20–33 ft (6–10 m) above ground. 

Average wind speeds increase with 

height and may be 15%–25% greater 

at a typical wind turbine hub-height 

of 80 ft (24 m) than those measured 

at airport anemometer heights. The 

National Climatic Data Center collects 

data from airports in the United States 

and makes wind data summaries 

available for purchase. Summaries 

of wind data from almost 1000 U.S. 

airports are also included in the Wind 

Energy Resource Atlas of the United 

States (see For More Information).

Another useful indirect measurement 

of the wind resource is the observation of an area’s vegetation. Trees, 

especially conifers or evergreens, can 

be permanently deformed by strong 

winds. This deformity, known as 

“flagging,” has been used to estimate 

the average wind speed for an area. 

For more information on the use of 

flagging, you may want to obtain 

Wind Speeds Increase with Height

02979308m

150

120

90

60

30

0 0

Increase in wind power, %

Tower height, ft

41 75 100 124
12 Small Wind Electric Systems Small Wind Electric Systems 13
14 Small Wind Electric Systems

A Siting Handbook for Small Wind 

Energy Conversion Systems (see For 

More Information). 

Direct monitoring by a wind resource 

measurement system at a site provides the clearest picture of the available resource. A good overall guide 

on this subject is the Wind Resource 

Assessment Handbook (see For More 

Information). Wind measurement 

systems are available for costs as low 

as $600 to $1200. This expense may or 

may not be hard to justify depending 

on the exact nature of the proposed 

small wind turbine system. The measurement equipment must be set high 

enough to avoid turbulence created 

by trees, buildings, and other obstructions. The most useful readings are 

those taken at hub-height, the elevation at the top of the tower where the 

wind turbine is going to be installed. 

If there is a small wind turbine system in your area, you may be able to 

obtain information on the annual 

output of the system and also wind 

speed data if available.

How Do I Choose the Best 

Site for My Wind Turbine?

You can have varied wind resources 

within the same property. In addition 

to measuring or finding out about 

the annual wind speeds, you need to 

know about the prevailing directions 

of the wind at your site. If you live in 

complex terrain, take care in selecting 

the installation site. If you site your 

wind turbine on the top of or on the 

windy side of a hill, for example, you 

will have more access to prevailing 

winds than in a gully or on the leeward (sheltered) side of a hill on the 

same property. In addition to geologic 

formations, you need to consider 

existing obstacles such as trees, 

houses, and sheds, and you need to 

plan for future obstructions such as 

new buildings or trees that have not 

reached their full height. Your turbine 

needs to be sited upwind of buildings and trees, and it needs to be 30 

feet above anything within 300 feet. 

You also need enough room to raise 

and lower the tower for maintenance, 

0

No

deformity

Flagging

Prevailing wind

I

Brushing

and slight

flagging

II

Slight

flagging

III

Moderate

flagging

IV

Complete

flagging

V

Partial

throwing

VI

Complete

throwing

VII

Carpeting

02979310m

 Griggs-Putnam Index of Deformity

Index I II III IV V VI VII

Wind mph 7-9 9-11 11-13 13-16 15-18 16-21 22+

Speed m/s 3-4 4-5 5-6 6-7 7-8 8-9 10

Flagging, the effect

of strong winds on

area vegetation,

can help determine

area wind speeds. 
Small Wind Electric Systems 15

and if your tower is guyed, you must 

allow room for the guy wires. 

Whether the system is stand-alone 

or grid-connected, you will also need 

to take the length of the wire run 

between the turbine and the load 

(house, batteries, water pumps, etc.) 

into consideration. A substantial 

amount of electricity can be lost as a 

result of the wire resistance—the longer the wire run, the more electricity is lost. Using more or larger wire 

will also increase your installation 

cost. Your wire run losses are greater 

when you have direct current (DC) 

instead of alternating current (AC). 

So, if you have a long wire run, it is 

advisable to invert DC to AC.

Can I Connect My System 

to the Utility Grid?

Small wind energy systems can be 

connected to the electricity distribution system and are called gridconnected systems. A grid-connected 

wind turbine can reduce your consumption of utility-supplied electricity for lighting, appliances, and 

electric heat. If the turbine cannot 

deliver the amount of energy you 

need, the utility makes up the difference. When the wind system produces

more electricity than the household 

requires, the excess is sent or sold to 

the utility. 

Grid-connected systems can be practical if the following conditions exist:

• You live in an area with average 

annual wind speed of at least 

10 mph (4.5 m/s)

• Utility-supplied electricity is 

expensive in your area (about 10 to 

15 cents per kilowatt-hour) 

• The utility’s requirements for 

connecting your system to its grid 

are not prohibitively expensive

• There are good incentives for the 

sale of excess electricity or for the 

purchase of wind turbines.

Federal regulations (specifically, the 

Public Utility Regulatory Policies Act

of 1978, or PURPA) require utilities 

to connect with and purchase power 

from small wind energy systems. 

However, you should contact your 

utility before connecting to their distribution lines to address any power 

quality and safety concerns. Your 

utility can provide you with a list of 

requirements for connecting your system to the grid. The American Wind 

Energy Association is another good 

source for information on utility 

interconnection requirements. The 

2 H 20 H

Obstruction of the Wind by a Building

or Tree of Height (H)

02979307m

H

2 H

Region

of highly

turbulent

flow

The farther you

place your wind

turbine from

obstacles such

as buildings or

trees, the less

turbulence you

will encounter.
16 Small Wind Electric Systems

following information about utility 

grid connection requirements was 

taken from AWEA’s Web site. For 

more detailed information, visit www.

awea.org/ or contact AWEA (see For 

More Information). 

Net Metering 

The concept of net metering programs 

is to allow the electric meters of customers with generating facilities to 

turn backwards when their generators 

are producing more energy than the 

customers’ demand. Net metering 

allows customers to use their generation to offset their consumption over 

the entire billing period, not just 

instantaneously. This offset would 

enable customers with generating 

facilities to receive retail prices for 

more of the electricity they generate.

Net metering varies by state and 

by utility company, depending on 

whether net metering was legislated or directed by the Public Utility 

Commission. Net metering programs 

all specify a way to handle the net 

excess generation (NEG) in terms of 

payment for electricity and/or length 

of time allowed for NEG credit. If 

the net metering requirements define 

NEG on a monthly basis, the consumer can only get credit for their excess 

that month. But if the net metering 

rules allow for annual NEG, the NEG 

credit can be carried for up to a year. 

Most of North America gets more 

wind in the winter than in the summer. For people using wind energy to 

displace a large load in the summer 

like air-conditioning or irrigation 

water pumping, having an annual 

NEG credit allows them to produce 

NEG in the winter and be credited in 

the summer.

Safety Requirements

Whether or not your wind turbine 

is connected to the utility grid, the 

installation and operation of the wind 

turbine is probably subject to the 

electrical codes that your local government (city or county), or in some 

instances your state government, has 

in place. The government’s principal 

concern is with the safety of the 

facility, so these code requirements 

emphasize proper wiring and installation and the use of components 

that have been certified for fire and 

electrical safety by approved testing 

laboratories, such as Underwriters 

Laboratories. Most local electrical 

codes requirements are based on 

the National Electrical Code (NEC), 

which is published by the National 

Fire Protection Association. As of 

1999, the latest version of the NEC did 

not have any sections specific to the 

installation of wind energy facilities’ 

consequently wind energy installations are governed by the generic 

provisions of the NEC.

Inverter

Load

AC

Wind

turbine

Grid-connected Systems

02979301m

Meter

A grid-connected

wind turbine

can reduce your

consumption of

utility-supplied

electricity.
Small Wind Electric Systems 17

If your wind turbine is connected to 

the local utility grid so that any of the 

power produced by your wind turbine is delivered to the grid, then your 

utility also has legitimate concerns 

about safety and power quality that 

need to be addressed. The utility’s 

principal concern is that your wind 

turbine automatically stops delivering any electricity to its power lines 

during a power outage. Otherwise 

line workers and the public, thinking 

that the line is “dead,” might not take 

normal precautions and might be 

hurt or even killed by the power from 

your turbine. Another concern among 

utilities is whether the power from 

your facility synchronizes properly 

with the utility grid and it matches the 

utility’s own power in terms of voltage, frequency, and power quality.

A few years ago, some state governments started developing new 

standardized interconnection requirements for small renewable energy 

generating facilities (including wind 

turbines). In most cases, the new 

requirements are based on consensus-based standards and testing procedures developed by independent 

third-party authorities, such as the 

Institute of Electrical and Electronic 

Engineers and Underwriters 

Laboratories.

Interconnection Requirements

Most utilities and other electricity 

providers require you to enter into a 

formal agreement with them before 

you interconnect your wind turbine 

with the utility grid. In states that 

have retail competition for electricity

service (e.g., your utility operates 

the local wires, but you have a 

choice of electricity provider) 

you may have to sign a separate 

agreement with each company. 

Usually these agreements are written by the utility or the electricity 

provider. In the case of private (investor-owned) utilities, the terms and 

conditions in these agreements must 

be reviewed and approved by state 

regulatory authorities.

Insurance

Some utilities require small wind

 turbine owners to maintain liability 

insurance in amounts of $1 million or 

more. Utilities consider these requirements necessary to protect them from 

liability for facilities they do not own 

and have no control over. Others 

consider the insurance requirements 

excessive and unduly burdensome, 

making wind energy uneconomic. In 

the 21 years since utilities have been 

required to allow small wind systems 

to interconnect with the grid, there 

has never been a liability claim, let 

alone a monetary award, relating to 

electrical safety.

In seven states (California, Georgia, 

Maryland, Nevada, Oklahoma, 

Oregon, and Washington), laws 

or regulatory authorities prohibit 

This gridconnected,

10-kW Bergey

wind turbine

offsets

electrical power

consumption for

a small business

in Norman,

Oklahoma.

Bergey Windpower/PIX07166
18 Small Wind Electric Systems

utilities from imposing any insurance 

requirements on small wind systems that qualify for “net metering.” 

In at least two other states (Idaho, 

Virginia), regulatory authorities have 

allowed utilities to impose insurance 

requirements but have reduced the 

required coverage amounts to levels 

consistent with conventional residential or commercial insurance policies 

(e.g., $100,000 to $300,000). If your 

insurance amounts seem excessive, 

you can ask for a reconsideration from 

regulatory authorities (in the case of 

private investor-owned utilities) or 

the utility’s governing board (in the 

case of publicly owned utilities).

Indemnification

An indemnity is an agreement 

between two parties in which one 

agrees to secure the other against loss 

or damage arising from some act or 

some assumed responsibility. In the 

context of customer-owned generating facilities, utilities often want 

customers to indemnify them for any 

potential liability arising from the 

operation of the customer’s generating 

facility. Although the basic principle 

is sound—utilities should not be 

held responsible for property damage or personal injury attributable 

to someone else—indemnity provisions should not favor the utility but 

should be fair to both parties. Look for 

language that says, “each party shall 

indemnify the other . . .” rather than 

“the customer shall indemnify the 

utility . . .”

Customer Charges

Customer charges can take a variety 

of forms, including interconnection 

charges, metering charges, and 

standby charges. You should not 

hesitate to question any charges that 

seem inappropriate to you. Federal 

law (Public Utility Regulatory Policies 

Act of 1978, or PURPA, Section 210) 

prohibits utilities from assessing discriminatory charges to customers who 

have their own generation facilities.

Connecting to the Utility Grid:

A Success Story

This 10-kW Bergey wind turbine, installed on 

a farm in Southwestern Kansas in 1983, produces an average 1700–1800 kilowatt-hours per 

month, reducing the user’s monthly utility bills 

by approximately 50%. The turbine cost about 

$20,000 when it was installed. Since then, the 

cost for operation and maintenance has been 

about $50 per year. The only unscheduled maintenance activity over the years was repair to the 

turbine required as a result of a lightning strike. 

Insurance covered all but $500 of the $9000 cost of 

damages. The basic system parts include:

Bergey XL.10 wind turbine

100-foot free-standing lattice tower

Inverter 

Warren Gretz, NREL/PIX09634
Small Wind Electric Systems 19

Can I Go “Off-Grid”?

Hybrid Systems

Hybrid wind energy systems can 

provide reliable off-grid power for 

homes, farms, or even entire communities (a co-housing project, for 

example) that are far from the nearest utility lines. According to many 

renewable energy experts, a “hybrid” 

system that combines wind and 

photovoltaic (PV) technologies offers 

several advantages over either single 

system. In much of the United States, 

wind speeds are low in the summer 

when the sun shines brightest and 

longest. The wind is strong in the 

winter when less sunlight is available. 

Because the peak operating times 

for wind and PV occur at different 

times of the day and year, hybrid 

systems are more likely to produce 

power when you need it. (For more 

information on solar electric or PV 

systems, contact the Energy Efficiency 

and Renewable Energy Information 

Portal—see For More Information.)

For the times when neither the wind 

turbine nor the PV modules are producing, most hybrid systems provide 

power through batteries and/or an 

engine-generator powered by conventional fuels such as diesel. If the batteries run low, the engine-generator 

can provide power and recharge 

the batteries. Adding an enginegenerator makes the system more 

complex, but modern electronic 

controllers can operate these systems 

automatically. An engine-generator 

can also reduce the size of the other 

components needed for the system. 

Keep in mind that the storage capacity must be large enough to supply 

electrical needs during non-charging 

periods. Battery banks are typically 

sized to supply the electric load for 

one to three days. 

An off-grid hybrid system may be 

practical for you if:

• You live in an area with average 

annual wind speed of at least 

9 mph (4.0 m/s)

• A grid connection is not available 

or can only be made through an 

Regulation and

conversion

Load

Battery bank

AC or 

DC

Wind

turbine

PV modules

Generator

Hybrid Power Systems

Combine multiple sources to deliver non-intermittent electric power

02979301m

A hybrid system

that combines a

wind system with a

solar and/or diesel

generator can

provide reliable offgrid power around

the clock. 
20 Small Wind Electric Systems

expensive extension. The cost of 

running a power line to a remote 

site to connect with the utility grid 

can be prohibitive, ranging from 

$15,000 to more than $50,000 per 

mile, depending on terrain.

• You would like to gain energy 

independence from the utility

• You would like to generate clean 

power.

Living Off-Grid: A Success Story 

This home, built near Ward, Colorado (at an elevation of 9000 feet), has been 

off-grid since it was built in 1972. When the house was built, the nearest utility was over a mile away, and it would have cost between $60K–$70K (based 

on 1985 rates) to connect to the utility lines. The owners decided to install a 

hybrid electric system powered by wind, 

solar, and a generator for a cost of about 

$19,700. The parts of the system include:

Bergey 1.5-kW wind turbine, 10-ft (3-m) 

diameter rotor, 70-ft. (21-m) tower 

Solarex PV panels, 480 watts

24 DC battery bank, 375 ampere-hours

Trace sine wave inverter, 120 AC, 1 phase, 

4 kW

Onan propane-fueled generator, 6.5 kW 

rated (3 kW derated for altitude) 

Electric appliances in the home include 

television, stereo, two computers, toaster, 

blender, vacuum cleaner, and hair dryer. 

The largest electric loads are created by 

a well pump and washing machine. The 

generator runs about 20% of the time, particularly when the washing machine 

is in use. Propane serves the other major 

loads in the home: range, refrigerator, hot 

water, and space heat. Solar collectors on 

the roof provide pre-heating for the hot 

water.

Jim Green, NREL/PIX02796
Small Wind Electric Systems 21

Glossary of Terms

Airfoil—The shape of the blade crosssection, which for most modern horizontal axis wind turbines is designed 

to enhance the lift and improve turbine performance.

Ampere-hour—A unit for the quantity 

of electricity obtained by integrating 

current flow in amperes over the time 

in hours for its flow; used as a measure of battery capacity.

Anemometer—A device to measure 

the wind speed.

Average wind speed—The mean wind 

speed over a specified period of time.

Blades—The aerodynamic surface that 

catches the wind.

Brake—Various systems used to stop 

the rotor from turning.

Converter—See Inverter.

Cut-in wind speed—The wind speed 

at which a wind turbine begins to 

generate electricity.

Cut-out wind speed—The wind speed 

at which a wind turbine ceases to 

generate electricity.

Density—Mass per unit of volume.

Downwind—On the opposite side 

from the direction from which the 

wind blows.

Furling—A passive protection for the 

turbine in which the rotor folds either 

up or around the tail vane.

Grid—The utility distribution system. 

The network that connects electricity 

generators to electricity users.

HAWT—Horizontal axis wind turbine.

Inverter—A device that converts direct

current (DC) to alternating current 

(AC).

kW—Kilowatt, a measure of power for 

electrical current (1000 watts).

kWh—Kilowatt-hour, a measure 

of energy equal to the use of one 

kilowatt in one hour.

MW—Megawatt, a measure of power 

(1,000,000 watts).

Nacelle—The body of a propeller-type 

wind turbine, containing the gearbox, 

generator, blade hub, and other parts.

O&M costs—Operation and maintenance costs.

Power coefficient—The ratio of the 

power extracted by a wind turbine 

to the power available in the wind 

stream.

Power curve—A chart showing a 

wind turbine’s power output across 

a range of wind speeds.

PUC—Public Utility Commission, a 

state agency which regulates utilities. 

In some areas known as Public Service 

Commission (PSC).

PURPA—Public Utility Regulatory 

Policies Act (1978), 16 U.S.C. § 2601.18 

CFR §292 that refers to small 

generator utility connection rules.

Rated output capacity—The output 

power of a wind machine operating 

at the rated wind speed.

Rated wind speed—The lowest wind 

speed at which the rated output 

power of a wind turbine is produced.

Rotor—The rotating part of a wind 

turbine, including either the blades 

and blade assembly or the rotating 

portion of a generator.

Rotor diameter—The diameter of the 

circle swept by the rotor.

Rotor speed—The revolutions per 

minute of the wind turbine rotor.

Start-up wind speed—The wind speed 

at which a wind turbine rotor will 

begin to spin. See also Cut-in wind 

speed.
Swept area—The area swept by the 

turbine rotor, A = π R2

, where R is the 

radius of the rotor.

Tip speed ratio—The speed at the tip 

of the rotor blade as it moves through 

the air divided by the wind velocity. 

This is typically a design requirement 

for the turbine.

Turbulence—The changes in wind 

speed and direction, frequently 

caused by obstacles.

Upwind—On the same side as the 

direction from which the wind is 

blowing—windward.

VAWT—Vertical axis wind turbine.

Wind farm—A group of wind turbines, often owned and maintained by

one company. Also known as a wind 

power plant.

Yaw—The movement of the tower top 

turbine that allows the turbine to stay 

into the wind.

For More Information

Books

A Siting Handbook for Small Wind 

Energy Conversion Systems

H. Wegley, J. Ramsdell, M. Orgill and 

R. Drake

Report No. PNL-2521 Rev.1, 1980

National Technical Information 

Service

5285 Port Royal Rd.

Springfield, VA 22151

(800) 553-6847

www.ntis.gov

Energy Savers Tips on Saving Energy 

and Money at Home — A consumer’s 

guide for saving energy and reducing 

utility bills. www.eere.energy.gov/

consumerinfo/energy_savers

Wind Energy Basics 

Paul Gipe

ISBN 1-890132-07-01

A comprehensive guide to modern 

small wind technology. 

American Wind Energy Association

(202) 383-2500

www.awea.org

or

Chelsea Green Publishing Company

www.chelseagreen.com

Wind Energy Resource Atlas of the 

United States

D. Elliott et al.

American Wind Energy Association

(202) 383-2500

www.awea.org

rredc.nrel.gov/wind/pubs/atlas

Wind Power for Home, Farm, and 

Business: Renewable Energy for the 

New Millenium

Paul Gipe

ISBN-1-931498-14-8

Completely revised and expanded 

edition of Wind Power for Home and 

Business

Chelsea Green Publishing Company

www.chelseagreen.com

Wind Power Workshop

Hugh Piggott

Provides an overview on how to 

design a home-built wind turbine.

The Center for Alternative 

Technology

Machynlleth, Powys

SY20 9AZ, UK

Phone: 06154-702400

E-mail: help@catinfo.demon.co.uk

www.foe.co.uk/CAT

22 Small Wind Electric Systems
Government Agencies

U.S. Department of Energy’s Energy 

Efficiency and Renewable Energy 

Information Portal

www.eere.energy.gov

National Climatic Data Center

Federal Building, 151 Patton Avenue

Asheville, North Carolina, 28801-5001

Phone: (828) 271-4800

www.ncdc.noaa.gov

U.S. Department of Commerce

National Technical Information 

Service

5285 Port Royal Road

Springfield, Virginia 22161

(800) 553-6847

www.ntis.gov

Non-Government Organizations

American Wind Energy Association

1101 14th St., NW

12th Floor

Washington, D.C. 20005

Phone: (202) 383-2500

www.awea.org

Solar Energy International

Short courses on renewable energy 

and sustainable development

Phone: (970) 963-8855

www.solarenergy.org

Periodicals

Apples and Oranges

Mick Sagrillo

A comprehensive comparison of 

available small wind turbines available on the Home Power Magazine 

Web site: www.homepower.com

Home Power Magazine

The definitive bimonthly magazine 

for the homemade power enthusiast.

Phone: (800)707-6586

www.homepower.com

Videos

An Introduction to Residential Wind 

Systems with Mick Sagrillo

A 63-minute video answering questions most often asked by homeowners as they consider purchasing and 

installing wind power systems

American Wind Energy Association

Phone: (202) 383-2500

www.awea.org

Web Sites

Small Wind Systems

Includes answers to frequently asked 

questions and information on U.S. 

manufacturers.

www.awea.org/smallwind.html

Database of State Incentives for 

Renewable Energy

www.dsireusa.org

Green Power Network Net Metering

Net metering programs are now available in more than 35 states.

www.eere.energy.gov/greenpower/

markets

Small Wind “Talk” on the Web

AWEA’s Home Energy Systems electronic mailing list is a forum for the 

discussion of small-scale energy systems that include wind. To subscribe, 

send a subscription request to aweawind-home-subscribe@egroups.com.

Wind Energy for Homeowners

This Web page covers items you 

should consider before investing 

in a small wind energy system and 

provides basic information about the 

systems.

www.nrel.gov/clean_energy/home_

wind.html

Wind Resource Assessment 

Handbook 

www.nrel.gov/docs/legosti/

fy97/22223.pdf

Small Wind Electric Systems 23
24 Small Wind Electric Systems

2002 Farm Bill — Wind 

Energy Development 

Provisions

Renewable Energy Systems and 

Energy Efficiency Improvements

Incentive Type: Low-interest loans, loan 

guarantees, and grants

Eligible Technologies: Renewable energy 

systems (energy derived from wind, 

solar, biomass, geothermal, and hydrogen derived from biomass or water 

using a renewable energy source) and 

energy efficiency improvements.

Applicable Sectors: Agriculture, rural 

small commercial

Amount: Varies. The grant may not exceed 

25% of the cost of a project, and a combined grant and loan or guarantee may 

not exceed 50% of the cost of a project.

Terms: 2003 – 2007

Date Enacted: 2002

Authority: Farm Bill, Title IX, Section 9006

Summary: This law allows direct financial 

assistance to farmers, ranchers, and rural 

small businesses for the purchase of wind 

power and other renewable energy systems and for energy efficiency improvements. This program is authorized for 

funding for up to $23,000,000 per year in 

2003-2007, totaling up to $115 million. In 

determining the amount of a grant or loan, 

USDA shall consider the type of renewable 

energy system, the quantity of energy likely 

to be generated, the expected environmental benefits, the extent to which the system 

is replicable, and the amount of energy 

savings from energy efficiency improvements and the likely payback period.

USDA Rural Development State Office 

contacts can be found at www.rurdev.

usda.gov/rbs/farmbill/contacts.htm

USDA Farm Bill Web site: www.rurdev.

usda.gov/rbs/farmbill/resourc.htm

Green Tag Purchase Program 

Mainstay Energy is a private company 

offering customers who install, or have 

installed, renewable energy systems the 

opportunity to sell the green tags (also 

known as renewable energy credits, or 

RECs) associated with the energy generated by these systems. These green tags 

will be brought to market as Green-e* 

http://www.green-e.org or state certified 

products. Participating customers receive 

regular, recurring payments through the 

Mainstay Energy Rewards Program. 

The amount of the payments depends on 

the size of the wind installation, the production of electricity by that system, and 

the length of the contract period. Mainstay 

offers 3-, 5-, and 10-year purchase contracts. The longer contract periods provide 

greater incentive payments on a $/kWh 

basis. Typical payments for wind, which 

are made quarterly, range from 0.2¢/kWh 

to 1.5¢/kWh.

There is a $100 certification fee to get 

started with Mainstay Rewards. However, 

the fee may be paid with future green tag 

sales, and is generally waived for participants who opt for 10-year contracts. 

The requirements are: 

 1. The system must be grid-connected;

 2. Net-metering by the utility does not 

restrict the system owner from selling 

the green tags;

 3. The system owner must have title to the 

green tags or renewable energy credits. 

They cannot have been sold 

or transferred to any other entity;

 4. The system must be a new renewable, 

which, in most states, means powered up on or after 1/1/1999. See the 

Mainstay Energy web site for 

exceptions;

 5. For any systems over 10 kW, the system 

generation must be metered separately. 

For systems under 10 kW, separate 

metering is not necessary. Payments 

are made based on estimated 

production.

Contact: 

Mainstay Rewards Program

Mainstay Energy 

161 E. Chicago Ave. 

Suite 41B 

Chicago, IL 60611-2624 

Phone: (877) 473-3682 

Fax: (312) 896-1515 

E-Mail: info@mainstayenergy.com 

Web site: http://mainstayenergy.com
Small Wind Electric Systems

Net Metering

(Citation 69-8-601)

Net metering allows customers with wind projects to feed 

the surplus power they generate back into the utility grid. 

The customers receive credit for the excess electricity that 

can be applied to their next utility bill. Any excess power at 

the end of the year is given to the utility. Contact your local 

utility for its net metering policy (allowable capacity will 

vary from 10 kW–50 kW).

Universal System Benefits

(Citation 69-8-402)

Through a Universal Systems Benefit (USB) charge paid by 

all NorthWestern Energy customers, the state encourages 

the development of renewable energy resources projects 

that use environmentally friendly—or “green”—technology 

to generate electricity. USB funding provides incentives for 

solar, wind, or geothermal projects. NorthWestern Energy 

occasionally issues Requests for Proposals (RFPs) for 

renewable resource projects for which USB funds may be 

available. Most projects funded to date include public 

education or demonstration sites to create awareness 

about the opportunities and benefits of renewable energy 

installations. Public and private ownership projects are 

considered for funding. For more information, visit /www.

northwesternenergy.com/documents/bright_ideas_in_

renewable_energy.pdf. and download your copy of “Bright 

Ideas in Renewable Energy—A Guide to Funding Your 

Renewable Energy Project.” 

Property Tax Exemption for Renewable Generating 

Facilities Under 1 MW 

(Citation 15-6-225) 

New generating facilities with nameplate capacity of less 

than 1 MW that use an alternative renew-able energy 

source are exempt from property taxes for 5 years after 

start of operation. No special form needed; contact 

Department of Revenue’s local county office for more 

information. 

Alternative Energy Investment Tax Credit

(Citation: 15-32-401)

Commercial and net metering alternative energy 

investments of $5,000 or more are eligible for up to 35% 

tax credit against individual or corporate tax on income 

generated by the investment. The credit may only be taken 

against net income produced by the eligible equipment 

or by associated new business activity (i.e., it must be a 

commercial operation). Associated facilities, manufacturing 

plants producing the alternative energy equipment, and 

industries using the energy generated may use the tax 

credit.

The tax credit must be taken the year the equipment is 

placed in service; however, any portion of the tax credit 

that exceeds the amount of tax to be paid may be carried 

over and applied against state tax liability for the following 

7 years. A project on an Indian reservation may carry the 

credit over for 15 years if it has an employment agreement 

with the tribal government.

Taxpayers may not take this credit in conjunction with any 

other state energy or state investment tax benefits or with 

the property tax exemption for non-fossil energy property 

15-6-201(4).

This credit is available to taxpayers purchasing an existing 

facility as well as to those building a new facility.

Contact: Department of Revenue, (406) 444-6900; use 

state tax form AEPC for individuals or for businesses. 

Income Tax Credit on Alternative Energy

(Citation 15-32-201)

Resident individuals may claim an income tax credit of 

up to $500 for installing a recognized non-fossil form of 

energy generation or heating, including low-emission 

wood or biomass combustion devices, in their principal 

residence. If necessary, the credit may be carried over for 

up to four years after the first year it is claimed. Contact: 

Department of Revenue, (406) 444-6900; use state tax 

form ENRG-B. 

Alternative Energy Revolving Loan Account (Citation 

75-25-101)

Now all Montana sectors are eligible for low-interest 

loans from the state of up to $40,000 for wind projects 

to generate energy for their own use and for net metering. 

Repayment is due in 10 years. Information on the loan 

program can be found at the Energize Montana Web site, 

www.energizemontana.com. For more information, 

contact Kathi Montgomery, (406) 841-5243; e-mail: 

kmontgomery@mt.gov.

Montana Incentives
A Strong Energy Portfolio for a Strong America

Energy efficiency and clean, renewable energy will mean a stronger economy, a cleaner environment, and greater energy independence for America. 

Working with a wide array of state, community, industry, and university partners, the U.S. Department of Energy’s Office of Energy Efficiency and 

Renewable Energy invests in a diverse portfolio of energy technologies. 

Produced for the U.S. Department of Energy by the 

National Renewable Energy Laboratory, 

a DOE national laboratory

DOE/GO-102006-2479 • August 2007

Printed with a renewable-source ink on paper containing at least 50% wastepaper, including 10% postconsumer waste.

For more information contact:

EERE Information Center

1-877-EERE-INF (1-877-337-3463)

www.eere.energy.gov

Montana Contacts

Montana Department of Environmental Quality

Georgia Brensdal

1100 N. Last Chance Gulch

P.O. Box 200901

Helena, MT 59620

Phone: (406) 841-5248

gbrensdal@mt.gov

www.state.mt.us

National Center for Appropriate Technology (NCAT)

P.O. Box 3838

Butte, MT 59702

Phone: (406) 494-8641

Toll-free: (800) 275-6228

Fax: (406) 494-2905

www.ncat.org

Montana Wind Energy Data

Wind data sources are listed here. Current and historical 

site information is available for measurement of Montana 

wind resources. 

www.energizemontana.com 

Montana Green Power

info@montanagreenpower.com

www.montanagreenpower.com

Montana Tax Incentives

For a detailed list of Montana tax incentives, visit: 

www.energizemontana.com

Wind Powering America

www.windpoweringamerica.gov

U.S. Department of Energy Wind Energy 

Program

www.windpoweringamerica.gov