Key Considerations Results

THE VIABILITY OF SMALL WIND DISTRIBUTED GENERATION 

FOR FARMERS WHO IRRIGATE

Becki Meadows, NREL Trudy Forsyth, NREL Scott Johnson, CWEC Dave Healow, Two Dot Wind, LLC

• Approximately 14% of U.S. farms are irrigated, representing ~57 million acres of irrigated land

• 61.5% of irrigation systems in the US are powered by electric energy

• In 2008, the energy expenses for pumps totaled $2.68 billion, an increase of 73% from 2003

• More than half of the top 15 irrigation states have good to excellent wind resources

• Wind reduces the impact on the environment, including significant water savings, as it does  

not require the cooling of thermal generators

State System Capacity

Limit

Net Excess Generation Applicable Utilies

California 1MW Credited to customer's next monthly bill at retail rate.  After 12 month

period, customer may opt to have net excess generation roll over

indefinitely, or to have the utility pay for any net excess at a rate to be

determined by the rate making authority

All utilities (except

LADWP):

Colorado 120% of the

customer's average

annual

consumption.

Credited to customer's next bill at retail rate.  IOUs pay customers at end

of calendar year at average hourly incremental cost, or customer may opt

for indefinite roll‐over

Investor Owned

Utilities

Arkansas 300kW Credited to customer's next bill at retail rate; granted to utility at end of

12‐month billing cycle

All utilities (municipal

utilities not subject to

commission rules)

Colorado 25kW Credited to customer's next bill at retail rate Muni and co ops provide Muni and co op

Summary of Net Metering Policies In Top Irrigation States

Sources: The National Agriculture Statistics Service (NASS) 2008 Farm and Ranch Irrigation Survey; NREL 50‐m Wind map; Database of State Incentives for Renewable Energy

As illustrated in the case studies below, in states with a good wind resource and large amounts of irrigation by electricity, a net metering

policy with an annual true up can lead to the greater expansion of distributed wind and significant savings for farmers who irrigate.

Colorado 25kW Credited to customer s next bill at retail rate.   Muni and co‐ops provide

annual reconciliation at a rate they deem appropriate

Muni and co‐op

customers

Kansas 200kW Credited to customer's next bill at retail rate; granted to utility at end of

12‐month billing cycle

Investor Owned

Utilities

Missouri 100 kW Credited to customer's next bill at avoided‐cost rate; granted to utility at

end of 12‐month period

All utilities

Montanna 50kW Credited to customer's next bill at retail rate; granted to utility at end of

12‐month billing cycle

Investor Owned

Utilities

Montanna 10kW Credited to customer's next bill; granted to utility at end of 12‐month

billing cycle

Electric cooperatives

(MECA members)

Nebraska 25kW Credited to customer's next bill at avoided‐cost rate; excessreconciled at

end of annual period

All utilities

Texas 20kW Credited to customer's next bill (monthly) at avoided‐cost rate Austin Energy

Conclusions

H20 Farms in Walsh, CO: Installed Two 50-kW Wind Turbines, 2009

Total Project Costs (w/out incentives):                   $360,000 %  Irrigation Load Offset: 55%

Incentives: $147,750

*Southeast Colorado Resource Conservation and Development Council Advancing

Colorado’s Renewable Energy (ACRE) Grant; USDA/NRCS Environmental Quality

Incentives Program (EQIP); Investment Tax Credit; MACRS Bonus Depreciation

%  Wind Energy Valued at Retail Rate: 80%

Variable Costs: $6,000/yr *Operations and Maintenance; Insurance

Average Annual Energy Savings:                               $18,637/yr

(over 30 years)

Estimated Average Annual Production:                 275,000 kWh Renewable Energy Credit Revenues:                       $6,386/yr *Tristate Renewable Energy Credit Program                                      (over 9 years)

Average Retail Cost of Electricity: $0.037/kWh Avoided Cost of Electricity: $0.027/kWh

Summary: An annual true up date was set to March 1, at which time all net excess wind generation is purchased by the

local cooperative at avoided cost rates. The Investment Tax Credit brought the after tax payback to under 5 years.

Sources:  Entegrity Wind Systems Incorporation; H20 Farms; Southeast Colorado Resource Conservation and Development Council

Salinas Valley Ranch, CA: 50-kW Turbine Feasibility Study Completed, 2009

One of the two 50 kW turbines located at H20 

Farms in Walsh, CO. PIX# 17246 

Estimated Payback:                                                    16.3 years *pre tax, unleveragedEstimated Payback:                                                    4.5 years *after tax (including the Investment Tax Credit), unleveraged

Total Project Costs (w/out incentives):                   $215,000 %  Irrigation Load Offset: 50%

Incentives: $125,000

*

%  Wind Energy Valued at Retail Rate: 100%

Summary: The high cost of electricity, available incentives, and California’s “True Net Metering” policy for all systems

smaller than 1 MW allow this project to pay for itself in less than 2 years. Additionally, this location experiences the highest

winds in the summer afternoons, corresponding with the utility’s peak demand times.

Sources:  Entegrity Wind Systems Incorporation; California Wind Energy Collaborative (CWEC)

An irrigation pivot shows the use of water on a working farm. 

iStock #1897682 

*USDA Rural Energy for America Program; California’s Self‐Generation Incentive

Program

Variable Costs: $3,000/yr

*Operations and Maintenance; Insurance

Average Annual Energy Savings:                              $23,113/yr

(over 30 years)

Estimated Average Annual Production:                  70,000 kWh Renewable Energy Credit Revenues:                       $700/yr

(over 5 years)

Average Retail Cost of Electricity: $0.15/kWh Avoided Cost of Electricity: $0.04/kWh

Estimated Payback:                                                    6.8 years *pre tax, unleveraged

Estimated Payback:                                                    1.7 years *after tax (including the Investment Tax Credit), unleveraged

Agnew Farms, Big Timber, MT: Installed One 65-kW Wind Turbine, 2002

Total Project Costs (w/out incentives):                   $45,000 *refurbished turbine

%  Irrigation Load Offset: >100%

Incentives: $0 %  Wind Energy Valued at Retail Rate: 0%

Variable Costs: $1,500/yr *includes a monthly wind integration fee of $81.61

Average Annual Energy Savings:                           $5,570/yr

(over 30 years)

2009 Actual Annual Production:                               61,556 kWh Renewable Energy Credit Revenues:                    $0/yr

Average Retail Cost of Electricity: $0.086/kWh Avoided Cost of Electricity: $0.049/kWh

Estimated Payback:                                                    15.5 years Estimated Payback: N/A

The information contained in this poster is subject to a government license | WINDPOWER | Dallas, TX | May 23-26, 2010 | NREL/PO-7A2-47971

NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Summary: This project exceeds Montana’s net metering system capacity limit of 50 kW. In comparison to the other two case

studies, the simple payback could be reduced to less than 10 years with an annualized net metering policy.

Sources:  Agnew Farms; Two Dot Wind, LLC The 65 kW, refurbished Windmatic, erected 

by Tom Agnew at Agnew Farms. PIX #11947

*pre tax, unleveraged *after tax (including the Investment Tax Credit), unleveraged

Optimal policy design for irrigators include: annualized net metering, single electricity tariff (combined demand and energy costs into

kWh charge), 100 kW minimum capacity limit for net metering, buydown and incentives (REAP, ITC, etc.)