A national laboratory of the U.S. Department of Energy

Office of Energy Efficiency & Renewable Energy

National Renewable Energy Laboratory 

Innovation for Our Energy Future 

Distributed Wind Market 

Applications 

T. Forsyth and I. Baring-Gould 

Technical Report 

NREL/TP-500-39851 

November 2007 

NREL is operated by Midwest Research Institute ● Battelle Contract No. DE-AC36-99-GO10337 
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by Midwest Research Institute • Battelle 

Contract No. DE-AC36-99-GO10337

Technical Report 

NREL/TP-500-39851 

November 2007 

Distributed Wind Market 

Applications 

T. Forsyth and I. Baring-Gould 

Prepared under Task No. WER6.7502 
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Table of Contents 

CHAPTER 1. EXECUTIVE SUMMARY.................................................................................................................1
 

I. SUMMARY OF MARKET POTENTIAL........................................................................................................................3
 

II. SUMMARY OF DOMESTIC MARKETS FOR DISTRIBUTED WIND TECHNOLOGIES .....................................................4
 

III. SUMMARY OF INTERNATIONAL MARKET FOR DISTRIBUTED WIND TECHNOLOGIES ............................................8
 

IV. MARKET-BASED BARRIERS TO THE DISTRIBUTED WIND MARKET....................................................................11
 

V. TECHNICAL BARRIERS TO THE DISTRIBUTED WIND MARKET .............................................................................12
 

VI. ACKNOWLEDGEMENTS ......................................................................................................................................13
 

VII. CONCLUSION ....................................................................................................................................................13
 

CHAPTER 2. SMALL-SCALE REMOTE OR OFF-GRID POWER..................................................................15
 

I. EXECUTIVE SUMMARY .........................................................................................................................................15
 

II. APPLICATION BACKGROUND...............................................................................................................................15
 

III. CURRENT STATUS OF SMALL-SCALE WIND .......................................................................................................16
 

IV. MARKET BARRIERS ISSUES AND ASSESSMENT ..................................................................................................17
 

Expected United States Market ..........................................................................................................................17
 

Expected International Market...........................................................................................................................17
 

Technology Adoption Timeframe .......................................................................................................................19
 

Non-Technical Barriers for Technology Adoption.............................................................................................20
 

Time-Critical Issues ...........................................................................................................................................22
 

Incentive Markets...............................................................................................................................................22
 

Utility Industry Perspectives ..............................................................................................................................22
 

V. TECHNICAL BARRIERS ISSUES AND ASSESSMENT ...............................................................................................23
 

Barriers for Small-Scale Turbines .....................................................................................................................23
 

VI. RECOMMENDED AREAS OF TECHNICAL CONCENTRATION.................................................................................26
 

Technical Challenges.........................................................................................................................................26
 

VII. CONCLUSIONS ..................................................................................................................................................30
 

VIII. REFERENCES ...................................................................................................................................................31
 

CHAPTER 3. RESIDENTIAL POWER .................................................................................................................32
 

I. EXECUTIVE SUMMARY .........................................................................................................................................32
 

II. APPLICATION BACKGROUND...............................................................................................................................33
 

III. CURRENT STATUS OF GRID-CONNECTED RESIDENTIAL DISTRIBUTED GENERATION .........................................34
 

The Future..........................................................................................................................................................34
 

IV. MARKET BARRIERS ISSUES AND ASSESSMENT ..................................................................................................35
 

Expected United States Market ..........................................................................................................................35
 

Expected International Market...........................................................................................................................39
 

Technology Adoption Time Frame.....................................................................................................................40
 

Non-Technical Barriers for Technology Adoption.............................................................................................41
 

Economics..........................................................................................................................................................41
 

Lack of Incentives...............................................................................................................................................44
 

Subsidy Market for Residential Wind Distributed Generation...........................................................................46
 

Utility Industry Impact of Residential Distributed Generation..........................................................................46
 

V. TECHNICAL BARRIERS ISSUES AND ASSESSMENT ...............................................................................................49
 

Technology Barriers for Distributed Wind Generation .....................................................................................49
 

Expected Turbine Size for Residential Distributed Generation .........................................................................52
 

Required Cost of Energy ....................................................................................................................................53
 

Seasonality and Geographic Nature of Wind Resource .....................................................................................54
 

Impact of Intermittency on Residential Wind Energy.........................................................................................55
 

Interface between Turbine and Wind-Distributed Generation...........................................................................55
 

VI. RECOMMENDED AREAS OF TECHNICAL CONCENTRATION.................................................................................55
 

The Future..........................................................................................................................................................55
 

VII. CONCLUSIONS ..................................................................................................................................................58
 

VIII. ACKNOWLEDGEMENTS....................................................................................................................................59
 

IX. REFERENCES......................................................................................................................................................59
 

i 
X. BIBLIOGRAPHY ...................................................................................................................................................61
 

CHAPTER 4. FARM, INDUSTRY, AND SMALL BUSINESS ............................................................................61
 

I. EXECUTIVE SUMMARY .........................................................................................................................................61
 

II. APPLICATION BACKGROUND...............................................................................................................................62
 

III. CURRENT STATUS OF ACTIVITIES FOR THIS APPLICATION .................................................................................62
 

IV. MARKET BARRIERS ISSUES AND ASSESSMENT ..................................................................................................63
 

Expected Market in the United States ................................................................................................................63
 

Expected International Market...........................................................................................................................65
 

V. TECHNICAL BARRIERS ISSUES AND ASSESSMENT ...............................................................................................65
 

VI. RECOMMENDED AREAS OF TECHNICAL CONCENTRATION.................................................................................66
 

VII. CONCLUSIONS ..................................................................................................................................................67
 

VIII. REFERENCES ...................................................................................................................................................69
 

XI. BIBLIOGRAPHY ..................................................................................................................................................69
 

CHAPTER 5. “SMALL-SCALE” COMMUNITY WIND POWER ....................................................................70
 

I. EXECUTIVE SUMMARY .........................................................................................................................................70
 

II. APPLICATION BACKGROUND...............................................................................................................................71
 

III. CURRENT STATUS OF COMMUNITY WIND..........................................................................................................72
 

IV. MARKET BARRIERS ISSUES & ASSESSMENT ......................................................................................................74
 

Expected U.S. Market for “Small-Scale” Community Wind Applications.........................................................74
 

Expected International Market for “Small-Scale” Community Wind Applications...........................................75
 

“Small-Scale” Community Wind Technology Adoption Time Frame................................................................76
 

Non-Technical Barriers for “Small-Scale” Community Wind Technology Adoption........................................78
 

Time-Critical Nature of “Small-Scale” Community Wind Technology .............................................................80
 

Subsidy Market for “Small-Scale” Community Wind ........................................................................................82
 

Utility Industry Impact of “Small-Scale” Community Wind..............................................................................82
 

V. TECHNICAL BARRIERS ISSUES AND ASSESSMENT ...............................................................................................83
 

Technology Barriers for “Small-Scale” Community Wind................................................................................83
 

Complexity of “Small-Scale” Community Wind Technology Barriers ..............................................................85
 

Expected Turbine Size to Meet “Small-Scale” Community Wind Market .........................................................85
 

Required Cost of Energy to Compete in “Small-Scale” Community Wind Market ...........................................86
 

Seasonality and Geographic Nature of Wind Resource .....................................................................................86
 

Impact of Intermittency ......................................................................................................................................86
 

Interface for “Small-Scale” Community Wind ..................................................................................................87
 

VI. RECOMMENDED AREAS OF TECHNICAL CONCENTRATION.................................................................................88
 

The Future..........................................................................................................................................................88
 

VII. CONCLUSIONS ..................................................................................................................................................91
 

VIII. ACKNOWLEDGEMENTS....................................................................................................................................91
 

IX. REFERENCES......................................................................................................................................................92
 

X. BIBLIOGRAPHY ...................................................................................................................................................93
 

XI. APPENDIX A ......................................................................................................................................................95
 

ii 
Table of Figures

Figure E.1. Overview of market segments and commercial wind turbines........................................ 3 

Figure E-2. Market projections using number of units installed in the United States........................ 5 

Figure E.3. Incremental domestic installed capacity by sector through 2020 .................................... 7 

Figure E.4. Potential capacity variation for all domestic market segments........................................ 8 

Figure E.5. Incremental international installed capacity by sector through 2020 without data for 

off-grid or small-system segment (which is too large to show graphically)................................. 10 

Figure E.6. Potential capacity variation for all international market segments..................................10 

Figure 3-1. Renewable energy system end-use information from Home Power readers’ survey ...... 36 

Figure 3-2. Renewable energy end-user information from Home Power readers survey .................. 38 

Figure 3-3. Constructing a demand curve for DWT – experience from PV [27] ............................... 44 

Figure 3-4. United States residential average retail price of electricity by state, 2004 (cents/kWh).. 54 

Figure 5-1. United States large- and small-scale community wind energy market upper-bound 

growth forecast.............................................................................................................................. 72 

Table of Tables 

Table E.1. Market Projections of Domestically Installed Units .........................................................5 

Table E.2. Projected Domestic Installed Capacity (MW) by Sector through 2020............................ 6 

Table E.3. Cumulative Installed International Capacity in MW by Sector through 2020..................9 

Table 2-1. Electrical Access in Developing Countries by Region (Year 2000) ................................. 20 

Table 2-2. Summary Information Table: Small-Scale Remote Power (Residential or Village) ........ 29 

Table 3-1. 2006 Survey Responses on Grid-Connected Residential Wind Market Barriers..............43 

Table 3-2. Small Wind Programs by State.......................................................................................... 48 

Table 3-3. 2006 Grid-Connected Survey Responses .......................................................................... 51 

Table 3-4. Average Customer Load in kWh/year, by State and Segment .......................................... 53 

Table 3-5. Summary Information Table: Residential Power..............................................................57 

Table 4-1. Summary Information Table: Farm, Industry, and Small Business..................................68 

Table 5-1. 2006 Survey Responses on “Small-Scale” Community Wind Market Barriers................ 80 

Table 5-2. 2006 Survey Responses on “Small-Scale” Community Wind Technical Barriers ...........84 

Table 5-3. Summary Information Table: “Small-Scale” Community Wind Power ........................... 90 

Table 5-4. Community-Owned Wind Projects Utilizing Turbines from 100 kW to 1,000 kW ......... 95 

iii 
Chapter 1. Executive Summary 

The Executive Summary will discuss the distributed wind market potential from a domestic and 

international perspective with greater confidence in the number of units installed for the 

domestic market. The market potential discussion will be followed by a summary of information 

provided in each chapter, including regions of market interest for both the domestic and 

international market, key market and technical barriers, time-critical issues for market 

development, technology adoption timeframe, and recommended areas of concentration. 

Distributed wind energy systems provide clean, renewable power for on-site use and help relieve 

pressure on the power grid while providing jobs and contributing to energy security for homes, 

farms, schools, factories, private and public facilities, distribution utilities, and remote locations. 

America pioneered small wind technology in the 1920s, and it is the only renewable energy 

industry segment that the United States still dominates in technology, manufacturing, and world 

market share. 

The series of analyses covered by this report were conducted to assess some of the most likely 

ways that advanced wind turbines could be utilized as an option to large, central station power 

systems. Each chapter represents a final report on specific market segments written by leading 

experts in each sector. As such, this document does not speak with one voice but rather a 

compendium of different perspectives from the U.S. distributed wind field. 

For this analysis, the U.S. Department of Energy (DOE) Wind and Hydropower Technologies 

Program and the National Renewable Energy Laboratory’s (NREL’s) National Wind Technology 

Center (NWTC) defined distributed applications as wind turbines of any size that are installed 

remotely or connected to the grid but at a distribution-level voltage. 

Distributed wind systems generally provide electricity on the retail side of the electric meter 

without need of transmission lines, offering a strong, low-cost alternative to photovoltaic (PV) 

power systems that are increasingly used in urban communities. Small-scale distributed wind 

turbines also produce electricity at lower wind speeds than large, utility-grade turbines, greatly 

expanding the availability of land with a harvestable wind resource. These factors, combined 

with increasingly high retail energy prices and demand for on-site power generation, have 

resulted in strong market pull for the distributed wind industry, which is poised for rapid market 

expansion. 

Seven market segments were identified for initial investigation. These market segments, 

documented in this report, include small-scale remote or off-grid power; residential or on-grid 

power; farm, business, and small industrial wind applications; and “small-scale” community 

wind. A summary of the market for remote wind-diesel applications is also included in this 

summary, although a full report was never completed. The remaining two market segments, 

water pumping for large-scale irrigation and water desalination, are currently being assessed as 

part of other program activities and are not included at this time. While some of these market 

applications have existed for some time, others are just beginning to emerge as part of distributed 

wind power. A short introduction to each of these assessments is provided below. 

• Small-scale remote or off-grid power (residential or village): Supplying energy to 

rural, off-grid applications in the developed and developing world. This market 

1
 
encompasses either individual homes or small community applications and is usually 

integrated with other components, such as storage and power converters and PV systems. 

•	 Residential or on-grid power: Small wind turbines used in residential settings that are 

installed on the house side of the home electrical meter using net metering to supply 

energy directly to the home. Excess energy is sold back to the supplying utility. 

•	 Farm, business, and small industrial wind applications: Supplying farms, businesses, 

and small industrial applications with low-cost electric power. The loads represented by 

this sector are larger than most residential applications, and payback must be equivalent 

to similar expenditures (4 to 7 years). In many cases, businesses are not eligible for net 

metering applications; thus the commercial loads must use most of the power from the 

turbine. 

•	 “Small-scale” community wind: Using wind turbines to power large, grid-connected 

loads such as schools, public lighting, government buildings, and municipal services. 

Turbines can range in size from very small, several-kW turbines to small clusters of 

utility-scale multi-megawatt turbines. The key, defining factor is that these systems are 

owned by or for the community. 

•	 Wind/diesel power systems: Providing power to rural communities currently supplied 

through diesel technology in an effort to reduce the amount of diesel fuel consumed. The 

rising cost of diesel fuel and increased environmental concerns regarding diesel fuel, 

transportation, and storage have made project economics more sensible. 

•	 Irrigation water pumping: Using wind turbines to supply energy for agricultural 

applications. Current applications are powered by grid electricity, diesel, gasoline, 

propane, and particularly natural gas. Wind or hybrid systems allow farmers to offset use 

of high-priced fossil fuels. 

•	 Water desalination: Using wind energy to directly or indirectly desalinate sea or 

brackish water using reverse osmosis, electrodialysis, or other desalination technologies. 

The economic and technical performance of wind-powered desalination depends on the 

configuration and placement of wind resource with regard to the impaired water and 

existing energy resources. Water desalination works well with the wind resource found in 

coastal or desert environments. 

In these analyses, the DOE Wind and Hydropower Technology Program is assessing two new 

segments that have not historically been classified under the distributed wind banner: farm/ 

commercial and the “small-scale” community wind market. Both of these markets struggle to 

find commercial turbines to meet their needs, demonstrating opportunity for the development of 

U.S. turbines. 

These two emergent market segments combined with the existing small wind market result in 

three conglomerated turbine capacities. The first is the residential and smaller business sector at 

roughly 0 kilowatt (kW) to 100 kW capacity. The second sector is the farm/commercial market 

sector that includes farm, industrial, and wind/diesel from 100 kW to 500 kW. The last market 

sector for distributed wind is the “small-scale” community wind sector, which has been 

estimated to be 500 kW to 1 megawatt (MW). Although not covered specifically within this 

analysis, there is also likely a need to develop methodologies to lower the cost of power from 

large, multi-megawatt turbines that are installed in distributed community applications. Further 

hardware development in all of these sectors would help meet the desires of Americans to 

2
 
provide their own electricity, whether for a residence, farm, or business in rural America where 

zoning challenges are minimized. 

This study identifies and describes how the distributed wind industry can overcome longstanding barriers and play an important role (in the United States and the international arena) in 

supplying power near the point of end use or behind the meter. 

I. Summary of Market Potential 

Authors were asked to conservatively assess the potential market size for the five market 

segments in terms of the number of units expected to be installed in 5-year increments through 

2020. Additionally, authors were asked to recommend the expected turbine size that would be 

most applicable to meet the proposed markets. Figure E.1 shows an overview of the different 

market segments, the kilowatt capacity of the turbines for each market segment, and the existing 

turbines available within each distributed market segment. 

Market Segments 

Small-Scale Remote Power
 

Residential Power
 

Farm/Business/Ind Power
 

Wind/Diesel Power
 

“Small-Scale” Community Power 

300W

DOE Size Categories 

US Commercial Products 

Non-US Commercial Products* 

Refurbished

1 kW 5 kW 10 

kW 

20 

kW 

50 

kW 

65 

kW 100kW 200kW 300kW 400kW 500kW 600kW 700kW + 

-

1 kW 5 kW 10 

kW

20

kW

50

kW

65

kW 100kW 200kW 300kW 400kW 500kW 600kW 700kW +

Net Billing, on site 

Irrigation, Industrial 

US 

International 

Distributed Wind Turbine Commercial/Farm Small-Scale Community 

-

Commercial * - Currently sold in the US * - Currently sold in the US 4/27/06

PrototypePrototype

Figure E.1. Overview of market segments and commercial wind turbines 

From a manufacturing perspective, the strongest market segment is turbines smaller than 10 kW 

in size, with 20 domestic or internationally manufactured turbines to choose from. The number 

3
 
of turbine choices between 20 kW and 100 kW is quite limited, and turbines between 100 kW to 

1 MW are practically nonexistent. 

It should be noted that the re-powering of wind farms in Europe and the United States has made 

available re-manufactured turbines that are being used to supply many current distributed 

applications. Although generally inexpensive compared to existing new turbine models, most of 

these are based on significantly outdated technology. Turbine design, reliability, and energy 

capture have been improved over the intervening time, resulting in current projects with reduced 

energy capture than would be expected from projects with turbines incorporating current 

technology and design practices. 

II. Summary of Domestic Markets for Distributed Wind Technologies 

Teams of technical experts with knowledge of their market segments provided the market 

projections summarized below. Each of these experts was asked to provide a conservative 

estimate to ensure the report validity in retrospect. It should be noted that NREL did not attempt 

to validate the expected market data from these market summary reports. 

The benefits from distributed wind projects are minimized when quantified using total 

megawatts of installed capacity, especially for the smaller distributed turbines. However, the use 

of a simple number of units produced reduces the visibility of the mid-size turbines used in the 

farm/commercial, wind/diesel, and “small-scale” community wind segments. For this reason, the 

summary results are presented in terms of both the number of units and total installed capacity. It 

should be noted that the estimates of the number of units and thus the total installed megawatts 

are very rough and should only be considered in relative terms. The DOE Wind and Hydropower 

Program is in the process of conducting more detailed market assessments for the segments that 

show the most promise. 

Table E.1 summarizes the cumulative number of expected domestic turbine sales over the five 

market segments. Note that the table also presents the turbine size for each market segment. 

Currently the largest sector in terms of the number of installed units is the small-scale remote or 

off-grid power market segment. The majority of these off-grid units have a lower capacity, with 

a typical turbine size in the range of a few kilowatts or less. All market segments combine to a 

potential total of 680,000 installed units by the end of 2020. 

There are several market niches within the domestic off-grid segment, specifically in Alaska and 

Native American communities. An example is the Navajo Nation—approximately one-third of 

the 250,000 people on the reservation lack electricity. 

The estimated market growth across 15 years to 2020 is 11% per year for the small-scale remote 

or off-grid market segment; 22% per year for the residential or on-grid segment; 48% across the 

farm, business, and small industrial segment; 26% per year for the wind/diesel segment; and 23% 

per year for the “small-scale” community segment. 

4
 
Table E.1. Market Projections of Domestically Installed Units 

Off-grid Residential 

Farm, Industrial & 

Business 

" Small Scale" 

Community Wind/Diesel 

Turbine 

size 300 W - 60 kW 1 - 25 kW 

Large: 250-400 kW 

Net Bill: 10-60kW 100 - 1000 kW 100 - 300 kW 

2005 125,700 1,800 20 150 65 

2010 219,450 6,250 1,270 360 565 

2015 455,450 14,000 4,270 1,010 1,565 

2020 631,450 36,500 7,395 3,235 2,190 

These data are shown graphically in Figure E.2. The off-grid market segment is excluded due to 

its dominance of the graph, which reduces the reader’s ability to see the effects of other market 

segments. With the off-grid data removed, the residential market segments show that on a unitproduction basis, residential leads the distributed market segment. From a manufacturing 

standpoint, in which high volume can reduce cost, the high number of units should be attractive. 

60,000 

50,000 

40,000 

30,000 

20,000 

10,000 

0 

2005 2010 2015 2020 

Year 

Residential Farm, Industrial & Business 

" Small Scale" Community Wind/Diesel 

Number of Units 

Figure E-2. Market projections using number of units installed in the United States 

Table E.2 and Figure E.3 show these same data based on the expected cumulative installed 

domestic capacity of the turbines in these market segments. This figure provides a different view 

of the markets in that although fewer turbines will be installed in either the farm or community 

wind markets, their capacity (in terms of rated kilowatts) is much larger than the cumulative sum 

of the smaller residential and off-grid market segments. 

It should also be understood that the “small-scale” community wind market was arbitrarily 

capped at a maximum turbine size of 1 MW. It is quite clear that a vibrant community wind 

market exists that uses turbines greater than 1 MW in size, with multiple installations reaching 

up to 20-MW sites. Further DOE market assessment activities will likely extend this size range 

5
 
of turbines to be considered to include turbines up to 1.5 MW in size. 

Table E.2. Projected Domestic Installed Capacity (MW) by Sector through 2020 

Year Off-grid Residential 

Farm, Industrial & 

Business 

" Small Scale" 

Community Wind/Diesel 

Turbine 

size 1 kW 12.5 kW 

Large: 325 kW 

Net Bill: 30 kW 750 kW 200 kW 

Cumulative installed capacity (MW) 

2005 

2010 

2015 

2020 

126 

219 

455 

631 

23 4 113 

78 260 270 

175 875 758 

456 1,516 2,426 

13 

113 

313 

438 

Table E.2 shows the market segment with the largest installed capacity as “small-scale” 

community wind, followed by the farm, business, and small industrial market segment. Note that 

the farm, business, and small industrial market segment shares the same size turbine capacity as 

the wind/diesel market segment. Technological solutions would likely address both market 

segments. And combining the total projected market capacity of the farm, business, and small 

industrial segments results in approximately the same total as the “small-scale” community 

segment. 

To date, approximately 270 MW of community wind projects are installed in the United States, 

representing $250 million in investment in rural communities. Of those, 110 MW would meet the 

“small-scale” community wind definition of 1 MW or less. At least 440 MW of new communityowned wind projects are in the advanced planning states in the United States; however, project 

developers expect to utilize turbines larger than 1 MW for nearly all of this future capacity (due 

to their better economics and availability). 

Figure E.3 shows the total of all five market segments, resulting in 5.4 gigawatts (GW) of 

projected capacity by the end of 2020. 

6
 
0 

1,000 

2,000 

3,000 

4,000 

5,000 

6,000 

2005 2010 2015 2020 

Year 

Off-grid Residential 

Farm, Industrial & Business " Small Scale" Community 

Wind/Diesel 

Installed Capacity, MW 

Figure E.3. Incremental domestic installed capacity by sector through 2020 

A number of capacities were presented for each market segment, as shown in Tables E.1 and E.2. 

Each market segment chapter provides a range of market potential for 2010, 2015, and 2020 

(found in each chapter’s Summary Information Table). Based on those data, we evaluated the 

total market potential assuming minimum values of capacity and market potential, likely values 

of capacity and market potential (as shown in the above tables and figures), and the maximum 

value of capacity and market potential. Figure E.4 shows the bars, which represent the likely 

value of installed capacity in megawatts. The lines for each bar show the minimum and 

maximum for future years. 

7
 
0 

5,000 

10,000 

15,000 

20,000 

25,000 

30,000 

35,000 

40,000 

45,000 

50,000 

2005 2010 2015 2020 

Year 

Installed Capacity, MW 

Figure E.4. Potential capacity variation for all domestic market segments 

A large variation exists between the minimum and maximum value for the year 2020. This is due 

to several factors, including uncertainty about the optimum turbine size for each market segment, 

uncertainty in the removal of market barriers that are needed to propel the market forward, and 

uncertainty in the technology cost and the competitiveness of new products in the marketplace. 

III. Summary of International Market for Distributed Wind Technologies 

Although not the focus of this work, each of the market segment authors was asked to estimate 

the international market for distributed applications. It should be noted that international market 

information is notoriously difficult to measure, and the scope of these documents only allowed a 

cursory investigation. 

The international market is of special interest because unlike the market for large wind turbines, 

U.S. small wind turbine manufactures currently hold a dominant market share. U.S. 

manufacturers of small and distributed wind turbines represent the most diverse and 

internationally recognized industry in this technology area. 

Table E.3 provides a summary of the international market potential as identified in the market 

segment reports. Note that the table also presents the turbine size for each market segment. The 

largest sector in terms of installed megawatts is the community wind market segment. 

Historically, the European Union has been the leader in community wind, with about 80% of all 

the installed wind turbines considered community applications. This market is currently 

estimated to be 8.2 GW of installed units under 1 MW. 

8
 
In comparison to the domestic market, three international market items stand out. First, “smallscale” community wind becomes a more dominant player in the world wind market, replacing 

the substantially increased off-grid market. Second, wind/diesel applications become a stronger 

market element. Finally, residential wind diminishes in importance. The off-grid market, 

although not as large as “small-scale” community wind, still offers a huge potential. Although 

most of this market potential is outside the developed world, China has a current installed 

capacity of 170,000 mini wind turbines (60 to 200 W). 

Table E.3. Cumulative Installed International Capacity in MW by Sector through 2020 

Year Off-grid Residential Farm/Industrial/Bus Community Wind/Diesel 

Turbine 

size 5 kW 12.5 kW 

Large: 325 kW 

Net Bill: 30 kW 750 kW 200 kW 

2005 2,361 14 0 8,250 10 

2010 3,118 36 154 17,250 310 

2015 6,275 99 410 40,125 1,810 

2020 10,693 286 666 95,625 3,810 

Table E.3 summarizes the cumulative capacity of expected international turbine sales over the 

five market segments. Note that the table also presents the turbine size for each market segment 

while Figure E.5 shows the expected number of installed units of each market segment, 

excluding the off-grid or small-system segment, which is expected to grow at more than 150,000 

units per year in 2020, and distorts the impact of the other market segments. The largest sector in 

terms of the number of installed units is the off-grid or small-scale remote power market 

segment; however, the majority of these off-grid units will have a lower capacity, with a typical 

turbine size in the range of a few kilowatts or less. All market segments combine to a potential 

total of almost 1,500,000 installed units by the end of 2020. The total year-over-year 

international market grown is estimated at about 20%. It should be noted that due to the limited 

data available to support these estimates, the range between minimum, likely, and maximum 

values of capacity is quite large (Figure E.6). 

9
 
0 

50,000 

100,000 

150,000 

200,000 

2005 2010 2015 2020 

Year 

Number of Units 

Residential Farm, Industrial & Business 

" Small Scale" Community Wind/Diesel 

Figure E.5. Incremental international installed capacity by sector through 2020 without data for 

off-grid or small-system segment (which is too large to show graphically) 

0 

20,000 

40,000 

60,000 

80,000 

100,000 

120,000 

140,000 

160,000 

180,000 

200,000 

2005 2010 2015 2020 

Year 

Installed Capacity, MW 

Figure E.6. Potential capacity variation for all international market segments 

A robust market potential is estimated for the farm, business, and small industrial segment due to 

strong economic policy (for example, the German “feed in” tariffs, in which high economic 

value is given to the production of kilowatt-hours based in part on higher electricity rates). China 

also has aggressive renewable energy goals, and there is already proven use of mini turbines. 

10 
IV. Market-Based Barriers to the Distributed Wind Market 

Through this market analysis, several market-based barriers were identified that hinder the 

development of the distributed wind applications market. Unless otherwise noted, many of the 

barriers, which are described in basic rank order of importance, were found to be casual factors 

in multiple market segments. 

•	 Technology not quite cost competitive: Although markets exist in which incentive 

programs can be combined to give consumers 50% cost-sharing of their turbines, further 

cost decreases through volume manufacturing will be needed to allow appropriate 

payback periods for most American consumers. (Markets in which distributed wind 

technologies are cost effective exist in Class 3 to 4 wind resource areas and locations 

with high electricity costs, such as remote diesel stations.) 

•	 Turbine availability: In the current market, turbines sized between 100 kW and 1 MW 

to serve farm, business, small industrial, wind/diesel, and small-scale community loads 

are not produced. There is also a shortage of turbines sized greater than 1 MW because of 

pre-purchases by wind developers using the Production Tax Credit. There are also 

opportunities for turbine development in the 5-kW to 15-kW range to meet needs in the 

residential market segment. 

•	 Zoning/permitting restrictions or complications: Zoning remains a large issue for 

distributed applications, specifically for individual home or business owners seeking to 

install a small wind turbine on their properties in suburban America. The permitting costs 

and zoning requirements can greatly increase the overall cost, lead time, and complexity 

of installing even the smallest wind turbine. In most locations across rural America, 

zoning and permitting are not an issue for smaller turbines, but those locations don’t 

typically have the incentives in place to compel the purchase of a distributed wind 

turbine. Model zoning ordinances for mid-size turbines currently do not exist, and there is 

a need for them. These ordinances should consider proper setback for sound levels and 

safety, as well as avian and other wildlife issues. 

•	 Interconnection to the grid, including standards and defined requirements: Turbine 

grid interconnection is a complex issue that varies from state to state and generally from 

utility service provider to service provider. This creates a number of complexities, both 

from a technology perspective and an information outreach perspective. With such a wide 

range of requirements, it’s almost impossible for the industry and other supporting 

organizations to provide informative assistance to interested homeowners. 

•	 Lack of consistent incentive policies across markets: The lack of clear, consistent, and 

economically motivating incentives complicates and distorts markets for small wind 

systems. More systematic market incentives, such as “feed in” tariffs, a national 

investment tax credit for distributed wind applications, and state-based rebates for all 

distributed applications would expand the technology adoption. 

•	 Poor image due to past small wind experiences: The historical performance of some 

distributed wind turbines has resulted in a somewhat persistent belief that small wind 

turbines are noisy, unsafe, and unreliable. Outreach activities addressing previous market 

issues and some of the largest preconceived notions of modern small wind turbines are 

needed. 

11
 
V. Technical Barriers to the Distributed Wind Market 

In addition to market barriers, technical barriers were also identified. A summary of these 

barriers, all of which are discussed in greater length in each of the chapters, is provided. 

•	 Product reliability and performance: Turbine and system reliability, especially in 

distributed applications where service personal are less readily available, hinder the 

adoption of wind systems. Performance is typically over-predicted (usually due to a poor 

understanding of the wind resource, the micrositing of the turbine system, and 

insufficient tower heights). 

•	 Limited size choices using older designs: The limited number of commercial turbines 

50 kW and greater, combined with non-optimized turbine efficiency and design, result in 

missed market share. Many technological advances have been made on residential turbine 

designs and multi-megawatt turbine designs, and these technological advances could be 

applied to distributed turbines. 

•	 Availability of maintenance support: By definition, distributed applications will not be 

installed in organized wind farms where field support is readily available. The lack of or 

additional cost of field support undermines technology acceptance. 

•	 Lack of performance standards, testing, and ratings: The lack of industry-accepted 

standards undermines the credibility of performance estimates for wind turbines. In many 

cases, incentive organizations are unsure of which products to endorse and incent, 

limiting the available product with good economic value. 

•	 Technologies for low-wind regimes: Most mid-size wind turbines used in the 

distributed market were designed before recent advances in low-wind-speed technology. 

However, a large number of sites where distributed applications will be applied are not in 

high-wind-speed regimes and would receive the most advantage of low-wind-speed 

designs. 

•	 Turbine noise: Although distributed turbines are becoming quieter with each successive 

generation, some are still considered too noisy to be used in residential settings. Further 

technical advances to reduce noise will allow turbines to operate in a wider variety of 

settings. 

•	 Lightning susceptibility and grounding: The susceptibility of distributed wind turbines 

to lightning and the cost of lightning protection increase the cost and technical 

complexity of wind systems. 

•	 Grid interconnection and integration: The technical complexity and cost of 

interconnection of small wind systems to the electric distribution grid require further 

advancement, standardization, and testing. Distributing turbines through the use of more 

sophisticated remote-monitored controllers can allow the turbine to support the weak 

rural distribution systems, providing grid stability. 

•	 Tower options for larger wind systems: Most towers are currently designed around 

wind turbines for central station wind farms. To allow for more cost-effective installation 

and maintenance, distributed wind turbines must be developed with towers and systems 

specifically designed for the distributed wind market, such as self-erecting towers or 

lightweight, tall towers for small turbines in rural low-wind-speed applications. 

•	 Energy storage for remote power systems: Remote, non-grid-connected power and 

water irrigation applications require some form of energy storage to supply consistent, 

grid-quality electrical service. Energy storage is currently the highest life-cycle cost 

12
 
component of a remote power system. Improving the cost and technical performance of 

energy storage will increase the applicability of wind-driven remote power systems. 

VI. Acknowledgements 

The following people and organizations completed the work summarized in this document: 

The residential and “small-scale” community wind reports were written by a team led by Heather 

Rhoads-Weaver of eFormative Options LLC. The residential market team includes Amy LeGere, 

Brian Antonich, Johnny Holz, Steve Grover, Craig Hansen, Mick Sagrillo, Ed Kennell, Thomas 

Wind, Ron Lehr, Meg Gluckman, and Thom Wallace. The “small-scale” community wind team 

includes Brian Antonich, Lisa Daniels, Jonny Holz, Steve Grover, Craig Hansen, Mick Sagrillo, 

Ed Kennell, Thomas Wind, Ron Lehr, Amy LeGere, Meg Gluckman, and Thom Wallace. 

The small-scale remote power report was written by Robert Foster and L. Martin Gomez Rocha 

from New Mexico State University – Southwest Technology Development Institute and Ken 

Starcher and Vaughn Nelson from West Texas A&M University – Alternative Energy Institute. 

The farm, business, and small industry report was written by Ken Starcher and Vaughn Nelson 

from West Texas A&M University – Alternative Energy Institute and Robert Foster and Luis 

Estrada from New Mexico State University – Southwest Technology Development Institute. 

Additional reports were completed by Dustin Gaskins, Steve Amosson, Thomas Marek, DeDe 

Jones, Bridget Guerrero, Lal Almas, and Fran Bretz of the Agricultural Research and Extension 

Center, Texas A&M University; and James Janecek, Tom Acker, Abe Springer, Jan Theron, 

Mark Manone, Grant Brummels, and Sean Martin of the Sustainable Water Resource Alliance 

and Sustainable Energy Solutions Group at Northern Arizona University. Jesse Stowell of 

Northern Power Systems also contributed to this report. 

All of these teams have significant experience dealing with the market sector that they reported 

on and have provided potential market growth estimates based on their experiences. Their reports 

include a description of the market today, current market and technical barriers, their associated 

time frames, and projected market growth for the domestic and international markets. 

The authors would also like to thank the U.S. DOE Wind and Hydropower Technologies 

Program for its support of this work. 

VII. Conclusion 

Distributed wind technologies provide an avenue for Americans and people from across the 

globe to economically take part in the determination of the world’s energy future. Until recently, 

most of the world’s population was dependent on outside forces to provide energy services, 

primarily through large central-station power generation. Although individuals with adequate 

financial resources have been able to rely on personal energy sources, such as photovoltaic 

panels or small fossil-fueled generators, these personal energy sources have been out of reach for 

many. The dramatic reduction in the cost and availability of distributed wind technologies, 

combined with new policy incentives in many parts of the world, has started to change this 

dynamic. This report documents a substantial market for distributed wind applications and, 

13
 
although some technical and market-based barriers exist, none of them are insurmountable. The 

report also indicates that there is much to be understood about this market and that further 

analysis will be required in areas of specific interest. As the nation moves toward a posture of 

energy independence using more environmentally friendly energy technologies and away from 

large, central-station power generation and the large transmission lines that these will require, 

distributed wind applications—from residential wind turbines connected to our homes to large 

distributed wind and wind/diesel applications—can play a greater and significant role in our 

energy portfolio. 

14
 
Chapter 2. Small-Scale Remote or Off-Grid Power 

Prepared by: 

Robert E. Foster and L. Martín Goméz Rocha, New Mexico State University – Southwest 

Technology Development Institute 

Ken L. Starcher and Vaughn C. Nelson, West Texas A&M University – Alternative Energy 

Institute 

I. Executive Summary 

This section evaluates the key market and technical barriers faced by wind energy technology for 

the small-scale remote or off-grid power (residential and village) market sector. Market and 

technical questions posed by the National Renewable Energy Laboratory (NREL) are discussed 

to identify promising priority areas for U.S. Department of Energy (DOE) wind program 

research and development activities. 

Small-scale wind energy systems employing renewable energy offer an attractive and practical 

approach to meet electrical power needs for individual households and rural communities around 

the globe. Small wind turbines are a distributed energy source with good potential for rapid 

growth in the next 20 years. The key to long-term success for any small-scale wind energy 

system is to install a well-designed energy system while keeping in mind the institutional 

framework and structure needed to provide long-term operation and maintenance for the system. 

The small wind turbine industry is already a sustainable market around the globe. With about 1.7 

billion people without electric grid power, the village electrification market is estimated to be at 

least 26 GW [1]. Remote village power can be designed as a complete system with options of 

wind, photovoltaics (PV), batteries, and diesel generators. The major challenges are system costs, 

sizing system components, and establishing high-volume production of systems with a 

corresponding price reduction. 

II. Application Background 

Small wind energy systems come in many sizes to fit the need for energy and the resources 

available to the end users. This market encompasses single-home or small-community 

applications by supplying electricity to rural, off-grid applications in the developed and 

developing world. Sizes range from simple home-sized systems (60 W and up) to larger, villagescale systems with hundreds of kilowatts of wind added to the generation mix. In the United 

States, most consumers want to use wind energy to meet their energy needs at remote sites away 

from the grid or to make themselves energy self-sufficient. Developing countries desire small 

wind energy systems to supply energy for remote homes and villages without increased 

infrastructure demands on the limited resources of the central governments. 

Wind power can provide significant amounts of energy to rural households and communities 

currently supplied through diesel technology and reduce consumption of diesel fuel. Small wind 

offers capabilities for individual loads or a collection of loads to be met. 

In some villages, positive exposure to the first small wind energy systems predictably has led to 

an overall increase of energy use. Load management needs to be considered for each wind 

system installation because system designers cannot plan for unlimited growth in their initial 

system designs. Enforcing payments from the energy users seems one way to curb the 

15
 
exponential growth in system load, but it is feasible only if the costs are kept low so that energy 

value remains affordable. 

High penetration for wind/diesel is defined as the wind providing at least 75% of the current 

load. For high-penetration, wind/diesel power systems without energy storage, there are three 

operating stages: (1) diesel only, (2) wind/diesel, and (3) wind only. The transition between these 

three separate operation stages is the most difficult part of system control. Both the wind and the 

load will fluctuate over short time periods. 

III. Current Status of Small-Scale Wind 

Small wind energy systems have been around for many decades and are a mature technology, 

initially gaining popularity in the early 20th century for small farms and ranches in the Midwest. 

Most of these farms and ranches were already accustomed to using wind-powered mechanical 

water pumping systems. Before the large U.S. rural electrification programs, many rural farms 

installed small wind electric systems to supply energy (e.g., Jacobs units). However, small wind 

popularity waned as the large rural grid-electrification programs were initiated during the 

Depression and after World War II. But the small wind industry has once again gained popularity 

in recent years as more people move to rural, off-grid areas and most states offer net metering. 

Net metering allows utility customers to use their wind generation to offset their power 

consumption over an entire billing period. 

The small wind turbine industry is consistently growing, but not as rapidly as the large wind 

turbine industry. To date, more than 430,000 small wind units are installed worldwide, 

representing about 110 MW of installed capacity. The most successful turbines for the smallscale industry are the smaller units, usually only a few hundreds Watts in size. The largest 

market for these small turbines is overseas, in places such as China and Mongolia. The turbines 

are most often used to power individual households. There are also about 150 wind-hybrid power 

systems installed around the globe, using larger wind turbines (typically ranging from 1 kW to 

50 kW). For these larger hybrid systems, institutional management issues are key to their longterm success. Likewise, a similar number of telecommunication systems around the world use 

small wind technologies to help power microwave repeater stations, etc. 

The leading U.S. and world manufacturer of small wind turbines is Southwest Windpower 

(SWWP) in Flagstaff, Arizona, which has sold nearly 100,000 units to date. SWWP has roughly 

half of the world market share for small wind turbines, with 40% sold domestically and 60% 

overseas. The market that includes turbines for sailboats is shrinking and represents 15% of 

SWWP’s sales. In 2006 (SWWP’s best sales year to date), sales sometimes surpassed 1,000 units 

per month and, at the time of this writing, were expected to be about 12,000 for the year. Highvolume production has allowed SWWP to sell a competitive-priced unit [2]. Other key 

manufacturers are Marlec from the UK (more than 50,000 90-W units produced) and Bergey 

Windpower in Oklahoma (more than 4,800 units produced, both 1-kW and 10-kW units). 

16
 
IV. Market Barriers Issues and Assessment 

Expected United States Market 

In the United States today, there are an estimated 35,000+ kW of installed small wind turbines, 

representing more than 90,000 total units in the 90-Watt to 25,000-Watt size range. The U.S. 

small wind market is growing at about 15% to 20% per year, and it roughly doubles every 5 

years. 

There is a growing interest in small wind systems in the United States, especially for rural 

households. The implementation of net metering in most states is allowing the small wind 

industry to grow. Also, since the U.S. rural electric grids were never set up with the intent of 

meeting all of the electrical services for today’s modern households with their many electrical 

appliances (big-screen TVs, satellite dishes, microwave ovens, computers, etc.), small wind 

systems could play a role in strengthening the rural electric grids. 

There are several U.S. wind niche markets. For instance, some rural U.S. villages are not 

electrified (most notably in Alaska). Approximately 75,000 people live in 175 rural communities 

throughout Alaska [3]. Of these, 42,000-plus people in 91 communities have a high potential for 

wind/diesel systems. Most of these are Native American communities. 

The largest Indian reservation in the United States is the Navajo Nation, and approximately onethird of the 250,000 people on the reservation lack electricity. The households are typically 

scattered and will never be electrified by the grid or a village system. The Navajo Tribal Utility 

Authority has already installed hundreds of individual PV systems for some of these rural 

households (typically about 300 Wp each). Small wind generators can help augment battery 

charging for these existing and new systems. 

Another significant, often overlooked U.S. niche market is the sailboat market. Small wind 

turbines (e.g., Air Marine) are very popular with boaters. This market was one of the first to help 

launch Southwest Windpower to success. 

Expected International Market 

Predicting the future overseas market for the small-scale, remote power distributed wind 

applications market is not a simple process. Many political, technical, and fuel price variables 

will have a direct impact on future market growth. Energy demand for overseas markets will 

continue to rapidly grow in the near term (decade), but most will be supplied by conventional 

generation. Likewise, as oil prices continue to increase over the next decade, the economics of 

small wind systems improve. There will also be greater interest in using wind energy 

technologies as a clean energy technology to help offset CO2 and other global warming 

emissions. The use of wind energy will become more desirable to operate remote diesel minigrid systems as diesel fuel costs continue to increase. Small wind turbines (1 kW to 50 kW) can 

be shipped in containers and assembled and installed in areas with little or moderate 

infrastructure. The operation will be modular in that two to ten units can be added as needed. The 

prognosis is excellent for increased growth for small wind in the international markets for years 

to come. 

17
 
China. China has been a leader in adopting small wind technologies. More than 70 million 

people in rural areas are still not connected to the national electricity grid. China has nearly 

125,000 villages with 8.89 million households without electrical power. About one-third could be 

powered by renewable energy [4], as grid expansion is too slow and expensive. The province of 

Inner Mongolia has implemented a U.S.$30 million fund per year for 5 years for rural 

electrification. The United Nations recently completed a survey of Chinese village power and 

found that there are about 45 wind/solar or hybrid village power systems, with an installed 

capacity of 1,363 kW. 

More than 170,000 mini wind turbines (60 to 200 Watts) operate in China, of which more than 

110,000 are located in Inner Mongolia. An additional 12,000 units are installed in Mongolia. The 

annual production of mini wind turbines exceeds 21,000 units in the region. The Chinese 

government estimates that the total installed capacity of mini wind turbines was about 30 MW in 

2000 and will be about 140 MW in 2020, with total energy generation of 90 and 450 GW-hours, 

respectively. 

India. As per projections by the Indian Ministry of Non-Conventional Energy Sources, 10% of 

the 24,000 megawatts of the anticipated installed capacity requirement by the year 2012 will 

come from renewables. Half of this capacity (12,000 MW) may come from wind power. India 

has gained a wealth of technical and operational experience for mid-size to large wind turbines. 

It is anticipated that as the larger wind turbines become more popular, this will also have a 

positive effect on smaller wind turbine usage in rural areas and with hybrid systems. There are 

more than 24,000 remote village sites across all 23 states of India, many of which are located in 

good wind regimes. 

Latin America. Mexico, Brazil, and the Caribbean represent the largest potential small wind 

markets in the Americas. More than 5 million people in Mexico in more than 70,000 small 

communities are without power. In 2006, the United Nations Development Program studied the 

use of distributed small wind systems for productive use applications in rural Mexico. The UN 

intends to help finance 15 MW of rural wind projects before the end of the decade. Likewise, 

Brazil has more than 25 million people without power in hundreds of thousands of dispersed 

small communities. Other areas, such as Central America and the Southern Cone, also have 

significant potential for hybrid systems development, with more than 10 million people without 

electric service. 

Europe. Europe has an extensive electric grid, so there is little need for off-grid wind energy 

systems. However, there is some potential for small on-grid wind energy systems, which many 

Europeans would find attractive. Likewise, the European Union members are examining ways to 

successfully develop and market hybrid wind systems for developing countries, as well as supply 

high-penetration systems for existing diesel-powered micro grids. A survey from monitoring 

programs in France states that there were 276 renewable projects in the European Union, with 

only 24 projects that could be classed as hybrid or autonomous wind systems [5]. 

Spain has an increased interest in hybrid systems because of the recent success of the utilityscale wind farms in Tenerife [Spain]. In the Canary Islands, two research groups (ITC and ITER) 

are active in testing these types of systems. Federal funds are funneled to the CIEMAT test 

18
 
facility in Soria, Spain, to develop components and whole systems for autonomous hybrid 

systems. 

Africa. Africa has seen relatively little use and development of small wind technology to date. 

South Africa, the most developed country on the continent, is only now seriously examining 

hybrid systems for village electrification. There are a few small pilot wind hybrid projects, 

including a 1-kW PV, 6-kW genset, 1-kW wind system by Peninsula Teknicon in Port Elizabeth, 

which is used to power a local radio station. There is a 500-W PV, 4-kW genset powering a 

remote area school north of Durban in Kwa Zulu, Natal Province. Finally, there are three 150- to 

250-kW PV/wind/diesel hybrid systems powering the Hluleka Nature Reserve on the Wild Coast 

in the Eastern Cape Province, as well as two other villages in the same area. 

Global. A good indicator of potential market size for small- and village wind hybrid systems is 

the need for electrification around the globe. Approximately 1.7 billion people around the world 

are without electrical service. The largest unserved electrical markets are in Asia and Africa. 

Table 2-1 provides relative comparisons among unserved electrical markets around the globe. 

Technology Adoption Timeframe 

While further innovations are needed for supporting technologies such as energy storage, the 

timeframe for technology adoption is not dependent on these. Generally, any site with a Class 2 

or better wind resource, such as much of the Midwest, is good enough to justify the investment 

for a small wind turbine. Economics for small wind systems are very good in Class 3 or better 

wind sites. There is already a robust small wind energy manufacturing industry in China, the 

United States, and the United Kingdom. 

One of the key drivers will be energy prices, especially as compared to conventional energy and 

the likely continued escalation of diesel fuels and electricity costs. There will be an eventual 

tipping point at which diesel mini-grids, which can already cost U.S.$.50/kWh or more to 

operate, become so expensive to operate that wind hybrid systems could become the system of 

choice for many regions. As other energy prices increase over the next 10 to 20 years, the market 

for small wind systems will rapidly open (especially grid-connected, the way it has recently 

opened for PV). 

As the rest of the world becomes electrified, wind will be selected as a better option over 

extending the grid for many places. If the grid can be easily extended to a location, chances are 

good that it’s already there. The remaining areas to electrify are often difficult to get to and 

located farthest from existing infrastructure. 

Small wind technology and know-how exist already. We have experience with more than 150 

pilot wind hybrid systems around the world. The small wind technology can be rather quickly 

adopted and implemented. Additional capacity building will be needed, especially overseas, to 

help hasten the pace of adoption. 

19
 
Table 2-1. Electrical Access in Developing Countries by Region (Year 2000) 

Total Population Electrical Access 

Year 2000 (estimate) With Access Unserved 

Millions Millions % Millions % 

Total 5,060.0 3,391.7 67.0 1,668.3 29.2 

Europe & Central Asia 477.1 472.4 99.0 4.7 1.0 

Latin America & 507.8 441.4 86.9 66.4 11.5 

Caribbean 

East Asia & Pacific 1,798.7 1,582.6 88.0 216.1 11.0 

Middle East & North 292.4 256.0 87.6 36.4 10.4 

Africa 

South Asia 1,343.5 529.5 39.4 813.9 52.2 

Sub-Saharan Africa 640.5 109.7 17.1 530.8 66.7 

Source: World Bank, 2001. Prepared from country-level estimates using best available data. 

Non-Technical Barriers for Technology Adoption 

Current small wind technology has not been as widely successful as small solar electric systems, 

even though solar is a more expensive technology. Issues regarding interconnection, cost, safety, 

and net metering for small wind systems impede market development. Some of the key nontechnical barriers are as follows: 

Cost. A key driver for all renewable energy technologies is the installed cost. The adage that 

“wind energy is free – but it’s not cheap” is a problem, especially for the smaller wind turbines. 

The cost is particularly high for village systems. Many of these systems are initially subsidized 

by the government, but then there are no funds available for the long-term operation of the 

system. 

Education. Education of people at all levels, including the general public, is a barrier to 

widespread wind technology adoption. Local maintenance personnel and installers need to be 

trained to reduce dependence on foreign knowledge and expertise. Utility and government 

planners should be trained so they can understand how wind can be a viable, economic, and 

reliable source of energy that can be employed without dependence on foreign assets. 

Information that is understandable to local users needs to be disseminated (workshops) during 

system planning. Information for the general public about wise energy use will go a long way in 

reducing the village power micro-grid loads during the initial operation. 

Regional infrastructure. There is a critical mass of systems required in any region to develop 

and retain sufficient technical expertise to properly maintain systems. With enough systems 

installed in a region, regional utilities obtain economies of scale for administration, operation, 

and maintenance. Using a minimum of half local materials/construction methods would reduce 

overall system costs and involve the locals at the onset of a project. Keeping the size of projects 

20
 
manageable for the anticipated grid size is a method of keeping maintenance costs down. 

Systems can be worked on without significant outside involvement of tools and materials for 

unexpected repairs. Increasing in-country training of systems developers, installers, and 

operators would allow for quicker response to system errors, making more people available 

system-wide to notice discrepancies or poor system performance. Suppliers need to offer a 

minimum 2-year warranty on parts, labor, and travel. If conventional generation is included, the 

units should be supplied in country, which would reduce dependence of small countries on 

developed countries. 

Developing industry in the host country can pay off in the long run for U.S. manufacturers. 

Reducing shipping costs and down time by having materials readily available will make local 

government more apt to choose them over a competitor. Showing that the technology can be 

turned over to properly trained in-country representatives and letting them "work the territory," 

instead of U.S. representatives coming in as outsiders, should pay handsome dividends, as well 

as taking advantage of favorable exchange rates in managing company payrolls. 

Image. The small wind industry sometimes suffers from a poor image in some sectors. This is in 

part due to a number of installed substandard small wind turbines that were not very reliable. 

Overseas, the image is even worse, as almost any garage shop can make a perfunctory wind 

turbine out of a car alternator and fan blades. These homemade units do not have the same 

reliability as well-engineered production units. 

Safety concerns also exist for installing and operating units, as well as for living in proximity to 

an operating unit. When a wind turbine that is designed to feather its blades is operated in high 

winds, it sounds like a Formula One racecar, and neighbors become concerned that the unit is 

about to self-destruct. Likewise, turbines have been known to throw blades, etc. So decisions to 

install a wind turbine next to highly populated areas, such as a school, may require extra thought 

and preparation. The industry should self-police itself and develop minimal safety requirements 

for turbines. 

When prototypes of first system installations are made, manufacturers should make a concerted 

effort to support viable projects and not just make the sale. Ten village hybrid projects installed 

in Mexico in the 1990s left the industry with a poor image after most failed within a few years 

and essentially resulted in a national hold on this kind of development. 

Developers and manufacturers need to take a long-view approach when working in a country for 

the first time. It may be more advantageous to design the correct system instead of selling the 

system requested that may not fit the bill. Even if a problem has nothing to do with the wind 

turbine (e.g., inverter failure), the wind industry image is still tarnished. One of the ingredients 

for SWWP’s success is good customer service (even though SWWP had its fair share of turbine 

problems as the technology developed). Pilot and demonstration projects, especially for village 

hybrids, require at least 2 years of manufacturer support to ensure that everything works beyond 

the project inauguration day. 

Institutional. Especially for village hybrid projects, institutional issues are key to the long-term 

project success. Too often hybrid projects involve complex technology that the local villagers 

cannot possibly operate and maintain. The community has to be involved in the planning process 

to determine goals and expectations. The implementation process requires sufficient political 

21
 
will, duration, good administration, and follow-up to be successful. Unrestrained load growth on 

a wind-hybrid village system cannot be supported. The industry must overcome the obstacle of 

villagers thinking that energy is free and no one at the local level has ownership in the system. 

Minimal payment for energy has to be implemented at the local level. It is important for the 

small wind industry to work with local partners on maintenance, tariff design, development 

coordination, planning tools, and delivery. The ultimate goal of such pilot projects is a 

standardized design for commercial replication. Project planning parameters that should be taken 

into account include performance, proven technology, loads, diesel retrofits, monitoring, buydown, and bundling multiple projects. 

Time-Critical Issues 

Time critical issues are most often a factor of the project scale: the larger and more complicated 

a project, the more that time is an issue. A small individual wind generator of a few hundred 

Watts does not face significant time-critical issues for technology selection. The availability of 

small wind turbines is generally good in the United States, although such availability may vary 

regionally. 

Larger village hybrid systems with perhaps hundreds of kilowatts of wind turbines face more 

time-critical issues, from possible new technology development (e.g., controllers) to the time and 

cost for transport and packaging of units (especially to remote villages). Also, often there are 

significant timelines for obtaining project financing for larger projects such as village hybrids. 

Incentive Markets 

In the domestic market, some states (and federal programs) provide wind energy subsidies and 

incentives. These include grant programs such as those offered by the USDA, net metering, and 

the production tax credit. Net metering is the only incentive that is really helpful for small ongrid systems. However, there are no relevant domestic incentives for small-scale, off-grid wind 

energy systems. 

International markets have a variety of subsidies that are country dependent. Europe has feed-in 

tariffs that are beneficial for on-grid wind systems. Unfortunately, like the United States, 

European countries do not offer many incentives for off-grid wind systems. 

Developing countries have even fewer incentives for small-scale, distributed wind energy 

development. In less-developed countries, rural users typically have limited financial means and 

usually do not even pay taxes. So the only possible subsidy of interest would be a direct subsidy 

for technology buy-down, and some international development programs will do this (e.g., the 

USAID/Winrock Dominican Republic small wind project in the late 1990s). The United Nations 

Development Program (UNDP) is already supporting small-scale wind development projects in 

China and Mexico. 

Utility Industry Perspectives 

For the most part, the utility industry (which includes rural cooperatives, investor-owned 

utilities, and municipal utilities) is not significantly impacted by the use of small wind turbines, 

22
 
either on or off the grid. Utilities can take advantage of small wind systems to limit their 

infrastructure investments. The utility did not build the hardware, so it does not have to maintain 

the wind energy systems. Individual small wind energy systems that are connected to the electric 

grid have essentially no impact on the grid and make the utility essentially indifferent to their 

application. 

In developing countries, small wind systems can be an attractive option for utilities in lieu of 

extending the conventional grid to remote communities over difficult geographical hurdles. 

Some utilities operate independent diesel mini-grids that can use small wind turbines (given the 

appropriate resource) as a complementary fuel source that can help reduce diesel fuel 

expenditures and transportation. 

V. Technical Barriers Issues and Assessment 

Barriers for Small-Scale Turbines 

There are many reliable and rugged wind turbines on the market for small wind systems. Small 

wind turbine technology has been around for some time, particularly for off-grid applications. 

The growth of small wind turbines providing grid-connected electricity is a relatively new 

market application, but it represents significant growth opportunities, some of which have 

already been realized. DC systems have an advantage of being more readily understood in 

remote areas due to exposure to automotive battery systems; however, AC power is more readily 

transported, and AC appliances are more available. Some of the key technology barriers for the 

further development and expanded implementation of small turbine technology are as follows: 

Energy storage. One of the largest barriers to widespread small wind technology acceptance is 

energy storage, which is expensive. Most wind turbines use lead-acid battery storage, which is an 

old battery storage technology. Batteries currently offer the best method of energy storage for 

wind systems and help to reduce the on/off cycles of gensets when used at low wind/limited 

sunlight times of the day. The greatest fuel savings occur when the gensets are shut down; even a 

small amount of storage would aid in those periods when renewable energy flow is just meeting 

or slightly under the load needs. 

Operation and maintenance (O&M). Wind turbines are rotating machinery, and thus they 

require maintenance. Long-term O&M is a problem, especially for installations in remote areas 

where there is little maintenance infrastructure. Lack of observation, diagnosis, and repair can 

take months or longer if there are no locally trained operators. O&M issues are of greatest 

concern in severe environments, such as corrosive coastal or severe arctic environments. Initial 

village installations need to be kept relatively small so that maintenance requirements are 

manageable. Inverters are expensive and generally not repairable at the local level. 

Electrical grounding. Damaging lightning strikes are always an issue for the wind energy 

industry, big or small. Wind turbines in the West and Southeast often face significant problems 

from and can be shut down due to lightning events. Structural performance, sensitivity to 

electromagnetic effects, and grounding techniques make a difference as to wind system 

survivability. 

23
 
Long-term reliability of blade coatings. Little research has been conducted on blade surface 

technology development and long-term life of coatings. Surface performance, soiling 

degradation, and aging are factors that are not currently monitored. 

Controls. Power electronic and controls offer enhanced function. The most improvement in 

terms of system reliability and ruggedness can be made to the microprocessor or computer 

controller. Power monitoring of the grid is also an expensive item, yet a necessary component of 

any grid-tied system to keep the voltage/frequency levels suitable for good power transmission 

and to maintain suitable power quality. High-speed power switches can be made more rugged 

and able to energize on zero crossing of AC-voltage levels to minimize surges and unwanted 

harmonics in the microgrid. 

Hybrid systems. There is a lack of high-quality, well-documented information of the true 

performance and costs of hybrid systems. Through detailed monitoring and evaluation of pilot 

systems, a large discrepancy was found between the power produced by small wind turbines and 

energy production estimates based on the wind resource and the turbine power curve. The 

reasons for this discrepancy vary but can result in as much as a 75% reduction in turbine output. 

Partial solutions include the wider use of discretionary loads and improved system control. 

System design impact should be considered, and computer models need to be evaluated to 

accurately assess this problem [6]. 

To avoid failure, village hybrid systems must include realistic system sizing and proper 

institutional controls from the onset. Planners must allow for anticipated load growth, a realistic 

tariff structure, and a means to meet future maintenance requirements. Allowable ranges of 

frequency fluctuation can be higher in microgrid applications than in conventional utility grid 

systems; a 3% variation is probably acceptable. This allows for simpler controllers and less 

stringent efforts on the part of the system controller to maintain frequency levels. Village power 

microgrids will often be the first exposure to utility power for many of the users, and they will 

not be disappointed with this level of variation over a day when compared with no power 

availability. 

For wind hybrid systems to be a viable and sustainable energy solution for remote village 

applications, an adequate and manageable institutional structure must accompany the technology 

intervention. The need for accurate meters installed at each point of service is required to 

empower local leaders to establish a use-based tariff that is equitable and manageable. Villagers 

need to be trained on how to operate an equitable tariff system. Key lessons learned from village 

wind hybrid system experience around the world are as follows [6]: 

• Maintenance is critical for long-term system survival. 

• System ownership and responsibilities need to be established early. 

• Metering is key for successful operation of village hybrid systems. 

• Local village support and training are crucial for a successful hybrid system. 

• Long-term planning is needed for all village hybrids. 

• Corrosion-proof hardware for coastal locations is required. 

• Battery charging from the generator is needed to enhance system efficiency and battery 

life. 

24
 
Complexity of technical barriers. Maintaining a database of systems to determine what has 

worked and failed in other locales would help developers and designers pick components and 

controllers with a proven field record and avoid those that need more design or manufacturing 

improvements. 

Diesel grids need to be retrofitted with hydrogen storage/peak shaving systems, a storable fuel 

cell, or heat engines to completely displace non-renewable fuels. 

Design tools are helpful to plan or project the savings from hybrid operation; they must be 

readily available, user-friendly, and reliable. Simulating the mix of renewables with existing or 

planned conventional energy will help developers see the benefits of renewables when they are, 

in fact, economically viable. There are several good models to model complex systems, 

including the Hybrid Power System Simulation Model (Hybrid 2), the Hybrid Optimization 

Model for Electric Renewables (HOMER), ViPOR, and RETScreen International. 

Optimal turbine size. For small household systems, optimal turbine sizes vary from about 0.3 

kW to 3 kW. For hybrid systems, optimal turbine size is from 5 kW to 50 kW. This size range is 

considered the optimal village size, easiest to match with existing components and not too large 

to install in remote, undeveloped areas. Turbines are not readily available in size ranges for 

modular hybrid systems because there is not enough production volume to keep costs low, and 

the sizes currently in production make load matching difficult. 

Cost of energy. System costs have been a stumbling block to the sales of small wind systems, 

especially for wind-hybrid systems. The key competitors for the small wind industry are diesel 

gensets, followed by the PV industry. 

A small 1-kW wind system will cost approximately $3,200 to install. In a good wind regime, 

assuming a 20% capacity factor, such a unit might produce about 880 kWh/year. The most 

inexpensive wind turbines will cost about U.S.$1,000 to $1,200 to install, including all balanceof-system costs. This translates to a cost of energy of about $0.15 to 0.18/kWh for small wind 

turbines in a good wind regime and with little follow-up maintenance. The cost of energy of the 

wind turbine itself is about half of this amount; however, the final energy cost is due to the entire 

balance of system (inverters, cables, towers, etc.). 

Thus, the small wind systems are already cost-competitive in off-grid applications, where diesel 

gensets can cost $.40/kWh or more to operate, and off-grid PV systems are almost as much. For 

on-grid applications, the small wind systems are not yet economically competitive with retail 

grid costs of $0.06 to .10/kWh. Some industry members believe that small turbine costs can be 

halved in the next 5 to 10 years, especially as production volumes increase [2]. Thus, in another 

decade or two, interconnected small wind turbines should prove competitive with an increasingly 

expensive grid power. However, for the meantime, subsidies and incentives will be required for 

small wind to compete against grid power. 

For wind hybrids, the lack of a manufacturer with modular systems of the same design is a major 

problem. If standard-configuration, modular systems were available (instead of a newly 

25
 
engineered prototype or demonstration project), real costs would be reduced. Manufacturers 

would be able to buy components in bulk, and a single standard design, tweaked to fit the locale, 

would ultimately lead to commercial success. 

Seasonal and intermittency wind resource impacts. For off-grid systems, seasonality is a 

larger issue. For instance, in the case of the Mexico Xcalak hybrid project, the villagers always 

suffered through about 2 to 4 weeks of little power during September, the lowest wind month [6]. 

This was unacceptable to them, and the issue would have been removed if the diesel generator 

were able to charge the battery bank. For other applications, the seasonality also can play a role, 

such as for water pumping (i.e., does the wind blow in the summer when the water is most 

needed?). 

Some utilities (e.g., Xcel Energy, Idaho Power, Kansas co-ops) have installed off-grid solar 

energy systems to pump water so that extensive rural lines do not have to be maintained for 

small loads. It is conceivable that utilities could also be sold on the same concept for small wind 

systems (although in the Midwest there is a tendency for less wind in the summer when water 

pumping is of highest priority). 

Interface. For small wind hybrid systems, 120- to 240-volt AC single-phase and 240- to 480- 

volt 3-phase microgrids are the two most common system voltage/configurations. Single-phase 

systems are most commonly selected for lighting and residential use, while the 3-phase is 

selected to handle industrial loads and to take advantage of the cheaper 3-phase gensets 

available. There are also many small off-grid wind systems used for battery charging, normally at 

12 or 24 V. 

Some components are incompatible when a wind turbine is combined with controllers, batteries, 

and PV or diesel gensets. While the individual components can be obtained from current 

manufacturers, it is often the designer’s problem to size and integrate components to provide the 

best overall system. The integration of mismatched components will yield a working system, but 

not one that gives the best energy value over the life of the system. For off-grid systems, 

component mismatch is larger since there are more components than for grid-tied AC systems. 

VI. Recommended Areas of Technical Concentration 

Technical Challenges 

Technical challenges focus on systems integration but also include innovative designs of 

controller/inverter integration or simply modifying current wind turbines to allow battery 

charging or autonomous operation. Some of the key areas for future technical research are as 

follows: 

Energy storage. Small wind can be used in combination with other generation or with energy 

storage capability alone to meet small to medium loads. Adding some storage can improve fuel 

savings by reducing diesel start/stops and by reducing idling. Idling units consume 30% of fullload fuel rates. This also requires a reliable starting mechanism for each independent genset. But 

the battery bank comes at a high initial cost, and battery maintenance is an additional system 

operating expense. There may be other, newer energy storage technologies, such as NiMH 

26
 
batteries or fuel cells that can be used to replace more traditional lead-acid battery technology. 

Additional research should be performed on short-term battery storage to reduce diesel cycles 

during low/medium wind conditions when lightly loaded gensets are least efficient. 

Controllers. Controls and metering need to be assessed for differing applications. Controllers 

and the control strategy that will simplify the coordination and connection of many 

manufacturers’ units into a seamless system are a top research priority. The highest priority 

should be given to controllers, which determine the operational stages and integration with the 

conventional diesel gensets. Testing of the controllers near system limits of stability for extended 

periods of time is imperative. However, efforts also need to be placed on a standard methodology 

and a robust and reliable control plan. While some fluctuations are allowed, overall power 

quality will not be compromised. The operating stages are diesel, hybrid, and renewable power. 

Adding variable-sized diesels with complex controllers is a second method to better match loads 

to resource; starting a 30-kW diesel instead of a 100-kW diesel for a 20-kW load is preferable 

over the long term. There are limited developers and suppliers of controllers that are compact 

and rugged enough to last in field conditions for the life of the system. This limited availability 

results in high initial costs and a lack of opportunity to develop a standard controller for general 

applications rather than a specific high-cost controller for each system as it is specified. 

Technology improvement. Optimizing rotor/controls for small wind turbines, along with 

optimizing the overall system layouts/controls should be completed. Among the prime targets 

are: 

• New blade designs for light wind regimes 

• Low Reynolds Number airfoils 

• Axial permanent magnet generators 

• Switched reluctance generators 

• Passive yaw/passive power regulation 

• Energy storage. 

Hybrid village systems. Research has to be directed at reducing cost and improving 

performance and reliability. Many of these problems are intertwined with institutional issues at 

the local and regional level. Even though standardization and modular components would help 

reduce costs, the main problem is to have the standard, modular components in an integrated 

working hybrid system that is robust and has high availability. Economies of scale are needed to 

reduce costs for remote villages. 

A standard design with modular components must be developed for village hybrid systems. This 

would allow resources to be added as the load grows within the original design. A new design for 

each village power system is a waste of engineering effort and cannot reduce costs. Lowmaintenance and easy-to-maintain and easy-to-operate systems must be developed. 

Computer models need to be validated against village hybrid systems at three stages: 

planning/design, installation, and after at least 2 years of operation. A simplified spreadsheet tool 

of expected performance and costs, with graphics output, for planners who are not technical 

experts must be readily available. 

27
 
A database on problems of village systems at the following three stages must be developed: 

planning/design, installation (first 3 months of operation), and after at least 2 years of operation. 

Unless a database of component failures is available, it is difficult to determine where research 

emphasis should be placed. The current NREL village power database should be extended to 

include this information. 

Targets to improve the amount of operating time in hybrid mode are: 

• Reduce wind speed cut-in of turbines by increased rotor area 

• Use as high a penetration of turbines as can be economically afforded to increase the 

wind band percentage time 

• Increase the reliability of system controller to supply synchronous capacitance to 

maintain grid frequency with no diesel operation 

• Rugged dump loads to shed unneeded power into useful storage at times of high
 

wind/low village load. 

Water desalination (salt or brackish water). Many areas with fresh water limitations have 

brackish or saline water availability in differing aquifers. This is especially true of coastal 

regions where there is also a good wind resource, as well as many desert regions. Wind energy 

could be applied to desalination techniques that could prove to be a huge industry. Likewise, 

fresh water can be stored fairly inexpensively. Technical challenges include assessing direct 

(high-efficiency) desalination opportunities and integration with wind turbines. This could be a 

particularly interesting market sector for off-grid small wind. 

28
 
Table 2-2. Summary Information Table: Small-Scale Remote Power (Residential or Village) 

Domestic Market Off-Grid Only Regions of Specific Interest 

(Specify units – MW potential, # of units) (not year-dependent) 

2010 16,000 turbines/yr, 11 MW 1. Western states (ranches, etc.) 

2015 40,000 turbines/yr, 28 MW 2. Tribal lands (Alaska, Navajo) 

2020 85,000 turbines/yr, 60 MW 3. Islands, sailboats (New England, 

Washington) 

International Market Off-Grid Only Countries of Specific International Interest 

(Specify units – MW, # of units) Off-Grid 

2010 24,000 turbines/yr, 17 MW 1. China 

2015 60,000 turbines/yr, 42 MW 2. India 

2020 150,000 turbines/yr, 105 MW 3. Caribbean 

Key Technical Barriers 

1. Energy storage 

2. Reliability/BOS lifetime 

3. Undersized/underdesigned 

4. Maintenance availability 

Key Market Barriers 

1. Cost 

2. Lack of market investment 

incentives 

3. Training/education 

4. Image (noise, safety, reliability 

concerns) 

Expected Turbine Size Range 

0.3 kW to 60 kW United States 

0.1 kW to 10 kW International 

Expected Turbine Coupling 

Mechanical (High speed:__; Low speed:__; proposed nominal speed:_____ ) 

Electrical (Voltage: 12 to 48 DC, a few hybrids at 240/480 V AC; 1- or 3-phase)
 

Thermal (Temperature: ____ ) 

Other: ___________
 

29
 
VII. Conclusions 

The known problems have not changed much over the past few years. The major problems 

involve cost, low performance and reliability, and institutional problems. Also the maintenance 

should be allocated so that the villagers do not feel that the new power source is simply a right or 

gift from a benevolent government but is their responsibility to operate and upkeep. Charging 

even a pittance to ensure that the benefactors of the power are also the ones supporting its 

operation would make each one responsive to the real costs and value of this energy. This could 

also curb the unlimited growth in power use as more and more villagers become used to the 

advantages and benefits of reliable electricity. Village systems that were designed for 10% load 

growth over 5 years and experienced increases of 20% to 30% in a single year can quickly be 

overtaxed and fail prematurely. 

Some key barriers facing the small wind industry for widespread adoption of small wind systems 

(both off-grid) include the following: 

• Deployment challenges 

• Untrained dealer network and high dealer pricing 

• Questionable (unverified) wind resources 

• Lack of available towers 

• Lack of market investment incentives. 

Planners should develop regional utility systems or cooperatives for village power systems for 

administration and maintenance. The hybrid system is still operated at the local village. There 

must be enough systems in a region or a state for a viable infrastructure. The main 

recommendations for further development of the use of distributed wind power in isolated power 

systems are as follows: 

• Develop the use of wind power in isolated systems as concerted actions in 

national and international programs rather than as individual projects. 

• Join forces in development of international standards for decentralized power 

systems with renewable energies. 

• Develop best practice guidelines as dynamic documents with common references 

and based on updated experience from recent projects. 

• Promote wind power in small- to medium-size systems following simple and 

proven approaches; e.g., by repeating and/or downscaling pilot and demonstration 

systems with positive track records. 

• Filter down from the large-scale systems any technological achievements 

adaptable to smaller systems. 

• Invest research and development in small systems to support development of 

rugged technology applicable for remote communities. 

• Use modeling assumptions from the hardware reality for the types of systems that
 

will be applied. 

• Install experimental systems only at test benches prepared to serve as 

experimental facilities. 

30
 
• Encourage the industry to offer medium-scale wind turbines (10 kW to 300 kW) 

for hybrid system applications; large wind turbine manufacturers need to give 

priority to allocation of production line capacity for smaller machines. 

In summary, the technical capacity to design, build, and operate isolated power systems with 

high penetration of wind power exists, but the mature product and the market have not met. 

Interesting markets, such as water desalination, have not been significantly explored. The above 

recommendations are seen as moves that would lead to development of the use of wind power in 

distributed power systems, but as in any technological development process, financing is needed. 

VIII. References 

1.	 King, W.R.; Johnson, B.L. III. Worldwide Wind/Diesel Hybrid Power System Study: 

Potential Applications and Technical Issues. SERI/TP-257-3757. Golden, CO: Solar 

Energy Research Institute (now the National Renewable Energy Laboratory), April 1991. 

2.	 Kruse, A. Personal communications, Southwest Windpower, March and November 2006. 

3. Hughes, P.; Reeve, B. "The Alaskan Market for Wind Energy." Windpower 1999 

Proceedings, American Wind Energy Association. 

4. Dou, C. Personal communication, Bergey Windpower, March 2006. 

5. Avia, F.; Cruz, I.; Arribas, L.M. "R&D& D: The Key for Opening the Market of Wind 

Energy Autonomous Systems." Windpower for the 21st Century Proceedings; September 

2000, Kassel, Germany. 

6. Foster, R. E. ; Orozco, R.C.; Romero, A. “Lessons Learned from the Xcalak Village 

Hybrid System: A Seven Year Retrospective.” 1999 ISES Solar World Conference 

Proceedings, July 4-9, 1999, Jerusalem, Israel. International Solar Energy Society, Israel 

Ministry of Science, Volume I, p. I-319-328. 

31
 
Chapter 3. Residential Power 

Prepared by: 

Heather Rhoads-Weaver and Meg Gluckman, eFormative Options, L.L.C. 

Amy LeGere, NetGenuity 

Brian Antonich, Windustry 

Jonny Holz and Steve Grover, ECONorthwest 

Craig Hansen, Windward Engineering 

Mick Sagrillo, Sagrillo Power & Light 

Ed Kennell, Clean Energy Products 

Thomas Wind, Wind Utility Consulting 

Ron Lehr, American Wind Energy Association 

Thom Wallace, Ecofusion Multimedia 

I. Executive Summary 

The distributed wind industry is poised for rapid market growth in response to continuing energy 

price hikes and increased demand for on-site power generation. However, in order for distributed 

wind to reach its mainstream market potential, the industry must overcome several hurdles, 

primarily in system costs, interconnection, and installation restrictions. 

This study provides a preliminary assessment of the grid-connected residential wind market, with 

an emphasis on potential market size and critical technical and market barriers. It recommends 

high-priority research, policy, and outreach efforts to address these obstacles. This study is 

designed to assist the U.S. Department of Energy (DOE) Wind and Hydropower Technologies 

Program and NREL in their consideration of future technical and other programmatic 

investments. 

The study confirms substantial and growing market potential in this sector; the dominant role of 

the United States distributed wind turbine (DWT) industry in domestic and international markets; 

and compelling reasons to continue research, development, and dissemination efforts to foster 

continued market expansion. Findings are based on surveys and interviews with key industry 

participants, a review of published and unpublished articles and studies, and the industry 

familiarity and expertise of the team members who conducted this study. 

The small wind turbine and distributed generation markets are emergent in nature, with 

approximately 2,900 residential grid-connected turbines totaling 14.5 MW installed worldwide 

as of 2005. United States turbine manufacturers provide an aggressive outlook for the DWT 

market, forecasting approximately 32% annual growth in grid-connected residential sales. 

Historically, the residential grid-connected sector has comprised less than 5% of total small 

turbine sales (up to 100 kW). However, manufacturers expect that portion to grow to more than 

20% by 2020. As a mid-point forecast between lower and upper bound estimates, this study 

projects that this sector of the DWT market will grow to about 78,000 units totaling 830 MW 

worldwide by 2020. 

Currently, United States manufacturers dominate the world market, but new turbines from China, 

India, and Europe will provide stiff competition for U.S. products in overseas markets and 

32
 
potentially in the U.S. market as well. China and United Kingdom provide examples of strong 

government support for DWT product development and market incentives. 

Historically the most significant barrier to residential market growth has been high total installed 

costs, which essentially reflects the cost of energy generated. The economics of residential DWT 

are highly variable, with an average cost of energy in the range of $0.08-0.12/kWh required to be 

competitive with conventional generation sources. The most common alternative to residential 

DWT, solar photovoltaics (PV), currently has total installed costs of about $7-10/W or around 

$0.20-0.35/kWh without incentives, compared to $4-7/W or $0.12-0.15/kW for grid-connected 

DWT. In order to achieve significant market expansion in the U.S. grid-connected market, 

reductions in DWT total installed costs to $2-3/W are needed. This can be achieved through 

technology improvements along with policy support. Drivers of market growth include financial 

incentives, favorable net metering, standardized interconnection policies, and high retail 

electricity rates. Key technical challenges include the lack of performance standards and ratings, 

product reliability, low-wind-regime technologies, and quiet operation. 

Oversight of performance certification and compliance testing is urgently needed to address 

critical reliability and credibility issues in order to support major expected growth in the gridconnected residential wind market. A third party familiar with the issues of both inverter and 

turbine manufacturers is in the best position to bridge the gap and provide innovative system 

solutions. These are important roles for an independent national testing laboratory to fill. 

With large wind turbine and PV manufacturers scrambling to keep up with demand, this study 

describes how the distributed wind industry can overcome long-standing stumbling blocks and 

play an important role both in the United States and internationally in supplying power at the 

point of end use. Efforts to enhance the viability of the DWT industry will have major global 

benefits in securing future energy supplies and meeting increased demand for decentralized, 

affordable clean power. 

II. Application Background 

Residential distributed wind generation, for the purpose of this study, is defined as small wind 

turbine systems, typically 1 to25 kW, connected to the utility grid on the customer side of the 

meter to supply electricity for residential applications, also referred to as grid-tied or gridconnected residential DWT. 

Small wind energy systems provide clean, renewable power for on-site use and help relieve 

pressure on the nation’s power grid, while providing domestic jobs and contributing to energy 

reliability and security. The United States pioneered this technology in the 1920s, and it is the 

one renewable energy technology that the United States still dominates. American companies 

lead in both technology and world market share. In contrast to utility-scale wind turbines that no 

longer have a strong U.S. manufacturing base, more than 90% of small wind turbines installed in 

the United States are still manufactured in the United States. 

Based on industry statistics, the 1- to 10-kW segment of the residential DWT market currently 

has the widest product coverage, with numerous market newcomers expected in various sizes 

[1]. Growing current and potential markets for these turbines are found in industrialized as well 

as developing countries. 

33
 
Small wind turbine systems are typically procured by property owners. Manufacturers market 

their systems through distributors, dealers, and directly to customers. Local dealers or installers 

typically install grid-connected systems, although some customers install their own systems with 

inspections conducted by certified electricians. The wind resource, turbine size and model, 

micro-siting, and installation requirements such as tower height and foundation are site-specific. 

Many states, counties, and utilities are promoting distributed wind generation for its clean energy 

benefits and contribution to renewable portfolio standards, energy reliability, and energy 

independence. 

Widespread deployment of small wind turbines can increase the public’s familiarity with wind 

turbine visual impacts, attract mainstream media coverage, and pave the way for local 

community support for larger wind developments. Small turbines, in particular installations at 

schools and other high-visibility locations, can become an important asset in reducing fears about 

unfamiliar technology, which in turn can help reduce the expense and unpredictable nature of 

siting and permitting large wind developments. Small turbines can be installed in selected 

neighborhoods to increase public awareness of residential wind options and provide an additional 

benefit by educating students on how electricity is made and the benefits of wind power. 

Neighborhood DWT installations can also help utilities increase customer interest and 

participation in voluntary green power programs and provide local “advertisements” of utilities’ 

involvement in renewable energy. 

III. Current Status of Grid-Connected Residential Distributed Generation 

The Future 

Residential DWT installed capacity has historically comprised less than 5% of total sales of 

small wind turbines (up to 100 kW) [worldwide]. However, manufacturers expect that portion to 

grow to more than 20% by 2020 [2]. The U.S. Department of Energy Renewable Energy Plant 

Information System (REPiS) has documented nearly 1,200 small wind turbines (up to 100 kW) 

totaling 16 MW as of 2005 in 45 states. Approximately 70% of the DWT systems and 40% of 

the DWT capacity documented in the REPiS database are estimated to be grid-connected 

residential applications [3]. 

Based on a review of available market data, this study estimates that approximately 700 wind 

turbines totaling 3.5 MW were sold worldwide for residential grid-connected applications during 

2005, with 500 of these totaling 2.5 MW sold in the United States. This study estimates that the 

cumulative grid-connected residential installed capacity was 2,900 units totaling 14.5 MW 

worldwide as of 2005, with 1,800 of these units totaling 9 MW installed in the United States. 

Market challenges. Because economics are a significant barrier to market adoption and growth 

of grid-connected DWT, it is important to examine factors contributing to turbine system costs. 

Key determining factors include turbine size (rotor diameter, rated capacity), average wind speed 

at hub height, power output control/limitation technology, and applied grid control technology. 

External factors include infrastructure and transport logistics costs, permitting costs and time, 

and other location-specific conditions. 

From the perspectives of power generation potential (kWh/kW), return on investment, and cost 

of energy (cents/kWh), current small turbine designs are at a disadvantage compared with much 

larger utility-scale wind turbines. Small turbines are relatively more expensive to manufacture 

34
 
(both materials and labor) and their limited hub heights (because of cost, setback requirements, 

aesthetics, etc.) result in comparatively less energy production. In addition, their low volume 

currently manufactured impede cost reductions with series-scale production [4]. The lack of 

performance standards, independent testing and consistent ratings for DWT contribute to product 

reliability concerns in the market. Complex interconnection standards and the reluctance of 

utilities to adopt net metering and DWT incentive programs further constrain the market and 

hinder market efficiencies. Dealers and installers increasingly report that the insurance industry 

is requiring additional insurance coverage for DWT owners. Finally, small wind turbines are not 

consistently addressed in state renewable portfolio standards (RPS), incentive policies, and 

consumer education campaigns. 

In the United Kingdom, the most commonly perceived barriers to residential distributed 

generation are permitting, expensive metering, lack of installation targets and incentives, high 

cost, and low consumer awareness. As in the United States, the United Kingdom experiences a 

high correlation between incentives and installations [5]. 

Utility acceptance. The market for grid-connected residential wind is primarily rural 

homeowners and small businesses. Many domestic residential sites appropriate for wind power 

are served by rural electric co-ops (RECs), which typically view net metering and distributed 

generation as cross-subsidies and inconsistent with co-op principles that members share equally 

in the investment, risk, and benefits of the co-operative [6]. The official position of the National 

Rural Electric Co-operative Association (NRECA) is that net metering results in reduced co-op 

revenue while the fixed costs remain the same and that the co-op’s other consumers ultimately 

subsidize the self-generating consumer [7]. While RECs do hold a large territory, many other 

utilities in more populated areas do not oppose net metering. However, most utilities still require 

significant education, softening of interconnection requirements, and generally an improved 

understanding of the benefits of capturing consumer investments in DWT. 

Potential new market segments. While the rural residential market has been the primary target 

for United States grid-connected small wind systems, new initiatives are exploring the urban and 

suburban markets. Among others, a U.S. manufacturer is aggressively pursuing small wind for 

the suburban residential market with new turbine technology and shorter towers. It can be 

anticipated that at least 1 year of market experience will be required to determine if this is a 

viable market segment for DWT and to identify the key technical and market barriers for this 

market segment, as well as the best practices for suburban residential market penetration. 

Several efforts are underway internationally to develop roof-top mounted [8] and buildingintegrated DWT designs [9], but so far none have proven commercially viable. It is premature to 

anticipate the feasibility of such designs, especially until extensive testing establishes that they 

pose no potential threat to the integrity of the structures on which they are mounted. The 

concepts are mentioned simply as examples of enabling technologies that may have the potential 

to significantly augment the distributed generation market in the future. 

IV. Market Barriers Issues and Assessment 

Expected United States Market 

Market targets. Historically, rural properties have been the primary market for residential-scale 

wind distributed generation systems. The industry is increasingly focused on the rural residential 

market, with new attention on the large-lot suburban residential market. As shown below in 

35
 
Figure 3-1, a 2004 survey of readers of Home Power Magazine (3,573 respondents) indicated 

that 38% intended to utilize renewable energy in a rural home, 27% in a suburban home, and 

16% in an urban home, with more than 40% of respondents planning to install wind turbines 

[10]. 

Figure 3-1. Renewable energy system end-use information from Home Power readers’ survey 

Market potential. The growth potential of the U.S. residential DWT market presents a unique, 

timely opportunity. Moreover, trends show that growth may occur at significantly increased rates 

if critical market barriers are overcome. A new market survey of the grid-connected residential 

wind market was conducted for this study in January 20061. This most recent survey found that 

the leading U.S. DWT manufacturers are projecting an average annual growth rate of 32% for 

the U.S. grid-connected market through 2020, with their potential domestic market share as high 

as 9,500 units totaling 26 MW in 2010, 21,000 units totaling 70 MW in 2015, and 41,000 units 

totaling 130 MW in 2020. These projections provide an aggressive outlook for the DWT market 

and signify that manufacturers are confident that the market is poised for strong growth. 

It is important to note that predictions about the percentage of future DWT market growth vary 

greatly and often depend heavily on the degree of expected state and federal support for DWT. 

The DWT market study conducted by the American Wind Energy Association (AWEA) in the 

spring of 2005 [11] found that in ideal market conditions (i.e., with sufficient policy support), 

annual U.S. sales of DWT could reach $55M by 2010. The same study forecasts a slow growth 

scenario based on scaled-back projections from only the established industry players, estimating 

annual U.S. sales at $27M in 2010 if the key barriers are not addressed. These estimates 

represent higher and lower bound average annual growth rates of 24% and 9%, respectively; 

however, some industry members believe that these projections are too conservative. With 

increased monitoring of these market trends, it is becoming increasingly evident that the DWT 

industry has the potential to become one of the leading renewable energy distributed system 

industries for residential homes in the United States. 

1

 See the Acknowledgements section for a list of survey participants. 

36
 
In 2002, AWEA set a bold industry goal of installing 50,000 MW of total DWT capacity (3% of 

domestic electricity demand) by 2020 based on census data for appropriately sized lots and 

acreages, and put the total potential domestic market at 15.1 million homes2

. The AWEA report 

estimated that more than 80% of the United States DWT market will be grid-connected 

residential systems with an average turbine size of 7.5 kW. Reaching 50,000 MW by 2020 would 

require average annual growth of around 60% over the next 15 years. Although this is an 

ambitious goal, given the recent annual market growth of 40% [12], it may be obtainable with 

adequate incentives, research and development (R&D) funding, and other policy support at state 

and federal levels. 

In consideration of these studies and familiarity with current industry trends, this study 

conservatively estimates that cumulative U.S. on-grid residential wind turbine installations in 

2010 will have a lower bound of 5,100 units totaling 29 MW and an upper bound of 7,400 units 

totaling 44 MW, with average annual growth rates of 9% and 28%, respectively. An increase in 

the average turbine size for this sector from 5 kW in 2005 to 9 kW in 2020 is projected as a 

result of the availability of new products. As shown in the Summary Information Table (Table 3-

5), assuming the same growth rates in the number of units, this study’s lower and upper bound 

United States estimates are 10,000-26,000 units totaling 72-211 MW in 2015 and 18,000-92,000 

units totaling 170-1,000 MW in 2020, resulting in a midpoint forecast for the United States gridconnected residential market sector of 55,000 units totaling 590 MW in 2020. 

One of the conclusions of this study is that the residential wind industry would benefit from a 

new, detailed potential market analysis. An in-depth market study focused on consumer 

motivations would provide valuable information to inform research, product development, 

marketing, and policy decisions. 

Regions of interest. The criteria for states in the United States with strong residential DWT 

markets include high residential electricity rates and/or loads, adequate wind resources, financial 

incentives, clear and reasonable permitting requirements, positive public perception of small 

turbines, state or utility public education and awareness campaigns, and simplified 

interconnection processes. 

Taking into consideration relevant economic variables, a 2004 study by Lawrence Berkeley 

National Laboratory calculated simple payback for DWT break-even turnkey costs in the United 

States [13]. The top ten states for DWT simple payback at $2.50/W were reported to be 

California, New York, New Jersey, Rhode Island, Vermont, Hawaii, Montana, Maine, Alaska, 

and Illinois.3

 Since then, California and Illinois rebate funding levels have declined, and 

Massachusetts and Washington have introduced significant DWT incentive programs. Fifteen 

states have renewable energy funds with $3.5 billion in aggregate for renewable energy from 

1998 to 2010: California, Connecticut, Delaware, Illinois, Maine, Massachusetts, Minnesota, 

Missouri, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, and Wisconsin 

[14]. However, so far only a few of these have established funding mechanisms for DWT. 

2

 The 2002 AWEA Roadmap estimated that by 2020 there will be 43.2 million homes with more than 0.50 acre of land 

and that 35% of these homes will have a sufficient wind resource to generate electricity from DWT.

3

 The model assumed a 10-kW system, 25-year system lifetime, 8% IRR on investment, operating and maintenance 

at 1.5¢/kWh, cash payment, and wind production valued at full average residential electricity rate. 

37
 
Responses to the survey conducted for this study confirm that the states of specific interest for 

the grid-connected residential market fall into three primary regions: 

• West Coast (California and Washington State) 

• Northeast and Mid-Atlantic (New York, Massachusetts, Pennsylvania, Vermont) 

• Midwest/Central (Texas, Ohio, Minnesota, Iowa, Wisconsin, Colorado). 

Correlations to residential PV. Considerable market information is available for the residential 

PV industry that could be useful to the DWT industry. Examples include trends in gridconnected PV installations and forecasts,4

 cost of energy, consumer demographics, purchase 

criteria, effectiveness of incentives and market drivers, and potential applications and market size 

for hybrid wind/PV systems. This insight can help inform marketing and technology decisions 

for the potentially large suburban residential market that some small wind turbine manufacturers 

are beginning to target. 

Figure 3-2. Renewable energy end-user information from Home Power readers survey 

4

 The U.S. Department of Energy’s Energy Information Administration (EIA) forecasts residential grid-connected PV 

to be 127 MW of installed capacity in 2010, 141 MW in 2015, and 157 MW in 2020. The calculations are based on 2-

kW residential systems. 

38
 
It is also important to note that the PV industry has significant public support and resources to 

advance policy incentives, obtain research funding, and conduct public education and awareness 

campaigns. Coordination between the DWT and PV industries based on similar interconnection 

technologies and overlapping target markets could prove effective for developing 

recommendations beneficial to both industries. Customer motivations and resource information, 

such as that collected by Home Power Magazine in a 2003 reader’s survey (Figure 3-2) can 

provide important insights for marketing both PV and DWT. 

Expected International Market 

U.S. DWT manufacturers are in an excellent position to take advantage of the international DWT 

market. AWEA estimates that more than 40% of U.S.-manufactured DWT are exported [15]. 

Currently, two U.S. manufacturers, Bergey Windpower and Southwest Windpower, are both 

recognized as the world’s dominant market leaders in terms of sales volume [16]. A recent study 

conducted by Marbek for the Canadian Wind Energy Association indicated that 96% of reported 

sales in Canada are attributed to three U.S. manufacturers: Bergey Windpower, Southwest 

Windpower, and Aeromax [17]. The international export market, therefore, presents a 

considerable economic opportunity for U.S. manufacturers, both for grid-connected residential 

DWT as well as off-grid, remote applications. 

The 2006 market survey conducted for this study confirms a robust international export growth 

outlook. The leading U.S. DWT manufacturers are projecting an average annual growth rate of 

34% for the non-U.S. grid-connected market through 2020, indicating a potential U.S. export 

market of 3,200 units totaling 11 MW in 2010, 10,000 units totaling 31 MW in 2015, and 22,000 

units totaling 66 MW in 2020. 

Other estimates of the international DWT market come from AWEA’s 2005 DWT market study 

and a 2002 study by Garrad Hassan Consulting. The AWEA study estimates that the 

international small wind market is roughly the size of the total domestic market and that 40% of 

DWT manufactured in the United States are exported. A 2002 article in REFOCUS magazine by 

United Kingdom-based Garrad Hassan Consulting projects a five-fold increase from 2002 for 

global small wind sales. This estimate equates to 150 MW/year, or 150,000 turbines/year 

assuming $5/W total installed costs and an average turbine size of 1 kW [18]. 

A number of countries have shown considerable interest in DWT technologies. In 2005, Canada 

and the United Kingdom published studies about their potential markets for small wind. A 2005 

United Kingdom study on “microgeneration” anticipates up to 5 GWh of energy from residential 

wind by 2030 (1.5-kW systems), with a doubling by 2050 and with small wind supplying 4% of 

United Kingdom’s electricity requirement [19]. The study, commissioned by the UK Department 

of Trade and Industry, estimates an upper bound of nearly 120 MW and a lower bound of 20 

MW of installed DWT capacity by 2020, depending on the amount of government support. 

The Canadian study reports a total potential of 120,000 units for grid-connected residential, 3-

kW average capacity, and total capacity of 360,000 kW. The study references U.S. programs and 

market adoption rates and concludes that the Canadian DWT market requires incentives in four 

areas: market development (federal rebate and provincial incentives), policy development (net 

metering and streamlined environmental processes), technology development (standardized 

testing and demonstration programs), and education and awareness-raising (model 

39
 
interconnection agreements and installation guidelines for siting, zoning, permitting, and 

interconnection) [20]. 

Lawrence Berkeley National Lab reports that China manufactured 12,000 small wind turbines in 

2000 and that the Chinese market has been strongly supported by government policies and 

incentives [21]. In February 2005, China passed a groundbreaking law to promote renewable 

energy. However, while China has a great potential for wind, as in much of the world, its 

primary market is off-grid rural electrification [22]. 

In consideration of these studies, the large DWT market share held by U.S. manufacturers, and 

familiarity with current industry trends, this study conservatively estimates lower and upper 

bound international annual growth rates of 11% and 28%, respectively. These rates are slightly 

higher than those estimated for the domestic residential DWT market as a result of the likelihood 

that new international residential markets will continue to emerge and expand. As with the U.S. 

market, the average international turbine size for this sector is expected to increase from 5 kW in 

2005 to about 9 kW in 2020 as a result of the availability of new products. 

As shown in the Summary Information Table (Table 3-5), using these estimated growth rates for 

the number of units, cumulative international on-grid residential wind turbine installations in 

2010 are estimated to have a lower bound of 2,500 units totaling 14 MW and an upper bound of 

3,300 units totaling 19 MW. Lower and upper bound international grid-connected residential 

wind installation estimates are 4,800-11,000 units totaling 34-86 MW in 2015 and 8,700-37,000 

units totaling 82-410 MW in 2020, resulting in an international mid-point forecast for this sector 

of 23,000 units totaling 250 MW in 2020. 

Regions of interest. Responses to the survey conducted for this study indicate that the major 

international markets for grid-connected residential wind fall in these three regions: 

• Asia (Japan, China, India) 

• Europe (United Kingdom, Spain, Italy, Germany, Netherlands, Greece) 

• Central and South America. 

Technology Adoption Time Frame 

There are some technologies on the horizon that could stymie the implementation of worldwide 

residential DWT. Fuel cells are often cited as a potential future example. However, commercially 

available fuel cells that do not rely on ever-tighter supplies of natural gas will not be available 

for several decades. By contrast, the recent United Kingdom “microgeneration” study forecasts 

mass-commercialization of DWT in 2015, with electricity prices the most important market 

change for small wind [23]. 

A much more immediately available technology, and one that “competes” with small wind in 

various applications today, is PV. Given the current public benefits programs, PV is more 

competitive than wind in the 1- to 3-kW category. In addition, currently PV systems can be 

ordered, permitted, and installed in a fraction of the time that is required to install a comparably 

sized residential wind turbine. However, in areas that do not have incentives for PV, residential 

wind is cost-competitive and easily installed for those facing reasonable zoning, permitting, and 

interconnection requirements. While PV is often viewed as a competitor, market growth can be 

anticipated in hybrid wind/PV systems. 

40
 
That said, there are still pressing hurdles that the DWT industry needs to overcome to reduce 

consumer hesitation with the technology, specifically in regard to reliability and timeframe for 

installation. In addition, the limited availability of cost-effective, state-of-the-art, synchronous 

inverters is a constraint to 3-kW (and larger) grid-connected variable-speed turbine types. While 

the manufacturers of these inverters also manufacture products for the grid-tied PV market, the 

inverter itself controls DWT generators differently than PV systems. When a small wind turbine 

manufacturer develops a new turbine model, inverter manufacturers may find it risky to invest in 

a new product line without the prospect of selling substantial numbers. Inverters and system 

electronics continue to be the least reliable component of small wind technology, which in turn 

has stalled innovation [24]. Some companies, such as SMA of Germany and Magnetek of the 

United States, have designed inverters for a number of residential wind turbines. 

Development of new small wind turbines that do not require an inverter for grid-intertie 

applications is another direction being pursued by a few designers. This would bypass the abovementioned dilemma. However, current development on these concepts has been greatly slowed 

by lack of R&D funding. Multiple paths for inverterless small wind turbines should be employed 

to seek the best solution to connecting DWT to the grid in a timely manner, including directdrive induction generators and gear-driven systems. 

Another significant time-sensitive barrier to current small wind turbine designers is the lack of 

effective computer modeling covering all components of a small wind turbine, in a variety of 

wind conditions including furling wind speeds. Quickly addressing this need could expedite 

crucial design improvements to help meet required cost targets during this critical window of 

opportunity to maintain U.S. dominance in this sector. 

Towers are one of the greatest challenges for DWT. Towers for large wind turbines are generally 

less than 20% of the hardware cost. For small wind turbines, towers often comprise 40%-80% of 

the hardware cost. A concerted effort to develop more cost-effective designs with composites or 

other materials should be explored. 

Non-Technical Barriers for Technology Adoption 

The January 2006 survey (Table 3-1) conducted for this study indicates that economics, lack of 

incentives, zoning, public perception challenges, and interconnection issues are the most 

significant barriers to residential DWT market adoption. Up-front costs also are rated as the key 

decision-making factor in a recent Canadian DWT market study [25]. 

Economics 

Most consumers carefully weigh the economics of DWT systems, taking into consideration total 

installed costs, out-of-pocket costs, perception of value and return on investment. Factors 

contributing to DWT system costs are listed above in the market challenges section. Reductions 

in total residential DWT installed costs from the current range of $4-7/W to $2-3/W after 

incentives will be necessary for significant market expansion in the U.S. grid-connected market 

[26]. This estimate is based on an analysis of PV module shipments vs. price (Figure 3-3) and an 

assumption that since PV and small wind are competitors in the grid-connected market, small 

wind must be priced competitively with PV. 

Lengthy and costly permitting processes, requirements to access state incentive funds 

(environmental analyses, site assessments, installation inspections, lengthy applications), and 

other site-related processes also drive up total installed costs because dealers and installers 

41
 
typically assist consumers with these steps. Inconsistent “rated output” turbine model 

designations may be an additional factor in reducing consumer confidence and perceived value. 

42
 
Table 3-1. 2006 Survey Responses on Grid-Connected Residential Wind Market Barriers 

Residential Wind Market 

Barriers Not an Issue Moderately Low Medium Moderately 

High 

Biggest 

Barrier 

Response 

Average 

Economics / out-of-pocket costs 

(total installed cost) 0% (0) 2% (1) 26% (11) 55% (23) 17% (7) 3.86 

Economics/perception of value (cost 

of energy, return on investment) 0% (0) 10% (4) 26% (11) 43% (18) 21% (9) 3.76 

Lack of incentives (rebates, buydowns, loans) 2% (1) 22% (9) 17% (7) 49% (20) 10% (4) 3.41 

Restrictive zoning 10% (4) 18% (7) 28% (11) 28% (11) 18% (7) 3.25 

Connecting to the grid (rural 

electric co-op) 5% (2) 22% (9) 29% (12) 34% (14) 10% (4) 3.22 

Visual impacts/neighbor concerns 0% (0) 34% (14) 24% (10) 27% (11) 15% (6) 3.22 

Inadequate net metering/net billing 10% (4) 20% (8) 34% (14) 24% (10) 12% (5) 3.10 

End User convenience/complexity 

(siting, installation, maintenance) 7% (3) 22% (9) 39% (16) 24% (10) 7% (3) 3.02 

Wind myths (reliability, sound, 

aesthetics, safety, avian impact) 7% (3) 27% (11) 24% (10) 41% (17) 0% (0) 3.00 

Lack of utility-sponsored programs 

and marketing for wind 7% (3) 24% (10) 34% (14) 29% (12) 5% (2) 3.00 

Permitting costs and time 7% (3) 27% (11) 37% (15) 20% (8) 10% (4) 2.98 

Low public awareness/support 10% (4) 22% (9) 32% (13) 34% (14) 2% (1) 2.98 

Lack of tax incentives (sales, 

property) 10% (4) 24% (10) 34% (14) 27% (11) 5% (2) 2.93 

Connecting to the grid (investorowned utility) 10% (4) 30% (12) 33% (13) 25% (10) 3% (1) 2.80 

Lack of consumer access to wind 

resource information/maps 22% (9) 32% (13) 41% (17) 5% (2) 0% (0) 2.29 

43
 
Figure 3-3. Constructing a demand curve for DWT – experience from PV [27] 

Lack of Incentives 

Federal, state, and local governments have a role in establishing policies and incentives that 

affect market adoption of residential distributed generation. Both the small wind and PV markets 

have seen growth surges following the introduction of state financial and policy incentives and 

extensive public education campaigns. The most recent federal tax credit for small wind turbines 

was 1985; 2005 federal legislation did not include small wind in a residential tax credit for PV. 

At the local level, industry participants consistently report that the work required to remove or 

reduce DWT permitting barriers is time consuming and cost-intensive. However, actively 

engaging federal, state, and local governments in addressing the key economic, permitting, and 

public education barriers can ensure the realization of the energy security, self-sufficiency, and 

reliability that DWT promises. 

Zoning, permitting, neighbor perception, and public awareness. Restrictive zoning (tower 

height, setbacks) and environmental requirements (state environmental assessments) contribute 

to the complexity, time, and costs required to install residential grid-connected systems. Model 

zoning ordinances and standardized data on sound, safety, reliability, rated output, setback 

requirements, and biological impact should be developed to streamline the zoning, permitting, 

and incentive application processes. 

The industry would benefit from a national public education campaign to promote awareness 

among consumers and public policy makers and to create market demand. These campaigns 

would promote the benefits of DWT and address concerns about wind energy in general 

(reliability, acoustics, aesthetics, safety, avian impact). A separate campaign targeted at utilities 

could provide education on the topics listed above and promote economic and customer 

satisfaction benefits for utilities. DWT system cost and payback calculators, wind resource maps, 

and consumer guidebooks, such as those on the Wind Powering America Web site [28], need to 

be maintained and enhanced to aid consumers with residential DWT purchase decisions. 

Connecting to the grid. Interconnection standards are important to streamline installations and 

reduce up-front costs for consumers. Increased awareness and support among investor-owned 

44
 
utilities (IOUs) and RECs will be necessary for small wind to be included in utility marketing 

efforts. As most preferred residential wind turbine sites are rural and fall in REC service 

territories, the unwillingness of many RECs to interconnect distributed generation is a significant 

market barrier for residential wind. New business models for both private and public utilities 

such as turbine leasing, sales, installation, maintenance, and turn-key “green energy” programs 

can be advanced as incentives for utilities to promote small wind. A marketing and public 

awareness campaign for RECs could assist in resolving grid balance and cross-subsidy issues. 

Overcoming barriers. The majority of the barriers listed above are consistent with the 2002 

U.S. Small Wind Turbine Industry Roadmap [29] that identified the following key market and 

policy barriers: 

•	 Market: Lack of effective standards, low visibility of the industry and technology, 

misconceptions about the wind resources, insufficient capitalization, complicated 

financial impact, lack of multilateral bank funding for export markets. 

•	 Policy: Lack of federal incentives, restrictive zoning, NIMBY (not in my backyard) and 

environmental concerns, excessive interconnection requirements and unequal billing 

policies, undervaluation of green energy, disincentives in the tax code, lack of state-based 

and national incentives, interconnection standards, and national models for net metering 

and zoning rules. 

Since the publication of the 2002 Roadmap, the industry has made progress on addressing many 

of the challenges identified, in developing turbine standards, promoting small wind applications, 

contributing to state and national policy discussions, and developing zoning models. A leading 

industry member predicts that innovative turbine designs significantly reducing the cost of 

energy will lead to tremendous success for the small wind industry [30]. 

Time-critical nature of small wind technology. Residential-scale wind technology is driven by 

a range of customer needs and desires. These include customer requirements for reliable sources 

of electric power, the desire to reduce utility bills by self-generation, and customer interest in 

owning and running wind turbines. On-site electric power can be reliably provided by a number 

of other technologies, including fossil- and renewable-fueled generators, PV, fuel cells, batteries, 

and small hydro generators. These technologies can also serve to reduce utility bills. Other 

efficiency and conservation methods include solar hot water, solar and geothermal heat 

collectors and cooling, and building designs that include passive solar features, such as solar 

lighting strategies. Therefore, several alternatives are competitively available for nearly all 

customer motivations. 

The main market drivers that impact customers’ choices among technologies are the cost and 

perceived value of wind turbines available, effective incentive programs, the strength of provider 

firms’ marketing and customer response capabilities, zoning and interconnection policies, and 

high fuel prices. Most of these issues lead to broad-scale patterns characterized by gradual shifts 

in market demand, rather than immediate or crisis-mode response. However, spikes in fuel prices 

can motivate customer decisions to investigate and invest in alternatives that reduce customer 

costs and risks, so it is important that advances in DWT technology are made in a timely manner 

to address the adoption timeframe issues discussed previously in this report. 

45
 
Subsidy Market for Residential Wind Distributed Generation 

Market drivers. The most significant drivers of residential DWT market growth in the United 

States are state incentives (buy-down programs, production incentives, tax credits or exemptions, 

favorable financing), favorable policies (net metering, standardized interconnection), and high 

retail electricity rates [31]. The DWT market has seen growth surges following the introduction 

of state financial incentives and extensive public education campaigns. Policy actions, such as 

state renewable portfolio standards, can increase interest and sale of renewable energy systems. 

Green marketing programs such as green tags, renewable energy credits, and utility green rates 

will have increasing impact on DWT market dynamics in the near future. These programs also 

serve as a metric for consumers’ willingness to pay more for green energy products. 

Several states and utilities have some form of incentives or enhanced buy-back rates for 

distributed generation, but in many cases these programs are not available for DWT or are not 

significant enough to move the market. One example of DWT’s exclusion is the $0.15 premium 

paid to net-metered PV systems by WE Energies in southeastern Wisconsin. In 2005, the state of 

Washington introduced a feed-in law to pay up to $2,000/year for both solar and wind generation 

at $0.15/kWh; however, implementation of the program has been stalled. Massachusetts and 

New Mexico have enacted similar production-based incentives directed toward PV. Market 

experience in California and New York has shown that up-front financial incentives of 

approximately 50% are required to accelerate residential DWT market adoption. Annualized net 

metering can also be a market stimulus in areas with high retail rates. 

Currently there are no federal incentives targeting small wind. However, Congressional and 

industry support is increasing for a federal investment tax credit following the passage of the 

30% investment tax credit for PV in the 2005 Federal Energy Policy Act as an opportunity to 

“level the playing field.” Although residential wind is eligible for the USDA Farm Bill Section 

9006 grants, the grants are only available for agricultural producers and much of the scoring 

weight of applications is placed on the cost of energy, therefore limiting the applicability of this 

program to residential wind projects. [Editorial note: The USDA 9006 grants are available to 

rural homeowners and businesses, not just agricultural producers. Although the cost of energy 

alternatives is one of the many criteria, it is not a majority portion of the scoring weight.] 

Typically, Renewable Portfolio Standard rules do not effectively address small wind, although 

states and advocates are showing increased interest in including set-asides or extra credit for PV 

in RPS policies. Table 3-2 provides a summary of U.S. state small wind programs as of January 

2006 [32]. 

Utility Industry Impact of Residential Distributed Generation 

Investor-owned utilities. An increase in the number of residential wind turbines would likely 

have minimal impact on the IOU industry because the grid penetration on any particular feeder 

line is not likely to be very high. Therefore, the electrical impact and revenue loss for the local 

utility will be minimal from residential wind turbines. It should be noted that utilities are 

somewhat skeptical of DWT, in part a result of the common concerns about wind safety, 

interconnection, and reliability. 

Rural electric co-ops. As stated earlier, although some RECs support residential-scale 

renewable energy systems, most view distributed generation as a cross-subsidy and inconsistent 

with co-op principles that members share equally in the investment, risk, and benefits of the coop. Many RECs also perceive safety and reliability issues with distributed generation. 

46
 
Co-ops in many areas of the country have grid capacity that could serve to aggregate and export 

distributed generation. Some minor technical modifications may be required at the utility 

substation to enable it to handle bi-directional power, but there are no technical reasons that the 

rural distribution system cannot act like a collector system for gathering distributed wind power 

and delivering it to the substation and higher voltage transmission system. Using the rural 

electric distribution system would provide economic diversification and fair-policy benefits for 

co-ops, economic returns for co-op members, and benefits to augment the national grid system. 

Utilizing utilities to create market demand. There is a business opportunity for RECs and 

IOUs to provide DWT sales, lease, installation, and maintenance services as a new revenue 

source and customer service option. Offering turnkey systems to green-energy program 

customers, similar to programs in place for PV, would benefit both the small wind industry and 

consumers. 

47
 
Table 3-2. Small Wind Programs by State 

48
 
V. Technical Barriers Issues and Assessment 

Technology Barriers for Distributed Wind Generation 

The introduction of new grid-connected small wind generators in recent years along with major 

market growth demonstrate the public’s desire to invest in residential-scale DWT. Economic 

factors including total installed cost, cost of energy produced, and payback, as noted throughout 

this study, drive the distributed generation market. While some industry participants are 

optimistic that DWT technology can reach cost targets to produce energy for approximately 

$0.05/kWh within the next few years, a more realistic near-term target may be the retail cost of 

energy. The average U.S. retail rate was $0.09/kWh in 2004 [33]. Technological advances, in 

addition to improved policy and financial incentives, can help the DWT industry to meet these 

targets and effectively compete in the residential distributed generation market. 

As shown in Table 3-3, the January 2006 survey of key industry participants conducted for this 

study indicated that the most important technical challenges for the grid-connected residential 

wind market are consumer credibility and the lack of effective performance standards, testing, 

and ratings; product reliability, performance, and manufacturer support; the lack of equipment 

choices for low wind regimes; and quiet operation. 

Performance standards, testing, and ratings. Establishing hardware certification, conducting 

certified field tests, and releasing consumer-friendly standardized ratings for small wind turbine 

performance and sound levels are urgent priorities for the residential DWT industry in order to 

assure consumers, zoning authorities, funding agencies, and lenders that small turbines are safe 

and will perform as expected. This activity is critically important to increase industry credibility 

and help prevent exaggerated claims and unethical marketing as new incentives become 

available. In several cases, including Oregon and California, the lack of effective standards and 

consistent ratings has delayed the implementation and funding of state rebate programs. Without 

credible, widely used performance and reporting standards for small wind turbines, there is a risk 

that some inexperienced manufacturers might sell unsafe or poorly performing systems that 

could damage the reputation of the entire wind-energy industry. 

Product reliability, performance, and manufacturer support. Power electronics, the most 

unreliable element of DWT systems, would benefit from increased robustness, with more 

attention paid to efficiency and power quality. Integrated monitors could report on long-term 

system performance and track maintenance issues. Adding capabilities for PV inputs and 

alternate outputs (such as resistance heat or battery charging) could increase utility confidence. 

Small grid-tie inverters need to be more tolerant of ground faults and lightning, while also able to 

load the turbine in absence of the grid to reduce acoustics and rotor loading. Manufacturer 

support has been difficult because different companies usually build the inverter and the turbine. 

A fresh look at small direct-drive induction machines is warranted as they offer the promise of 

eliminating the inverter without introducing reliability problems of gearboxes. Most direct-drive 

DWT alternators would also benefit from more powerful super-magnets, reduced cogging, and a 

steeper or exponential output curve. Maximum power point tracker (MPPT) technology could 

also aid DWT performance. 

Technologies for low-wind regimes. The highest percentage of people interested and willing to 

install small wind turbines do not live in high-wind regimes suitable for large commercial wind 

farms but in moderate Class 2 and 3 sites. There is a significant need for easily constructed DWT 

designs that function adequately and reliably in low wind regimes, work in turbulent 

49
 
environments, and produce enough energy to satisfy the needs of these homeowners with an 

anticipated long service-free life. 

Survey respondents recommended R&D efforts for supervisory control systems that coordinate 

wind turbine operation with load management (discretionary electric loads, heating loads, 

refrigeration loads, etc.), energy storage to enhance the performance and economics of 

distributed wind, and improved electronics and integration systems. Several industry players 

believe that towers need to be much taller because in some cases the doubling of tower height 

from 20 m to 40 m adds as little as 10% to system cost while increasing energy capture by 35%. 

It should be noted, however, that a major industry player believes that a high-performance 

turbine on a short tower is needed to address zoning restrictions and aesthetic considerations in 

order to penetrate the potentially large suburban residential market. Regardless, new lighterweight tower materials and self-erecting capability, when coupled with simpler footing and 

anchor systems, could reduce costs and enhance aesthetics for all turbine designs. 

Reduction of acoustic emissions. As rotors are optimized for Class 2 and 3 wind resources, 

higher tip speeds during gusts will create greater acoustic challenges as the optimal tip-speed 

ratio will occur at lower wind speeds. Lower tip-speed ratios and higher blade solidity are worth 

investigating. Computer models are needed to predict the complex behavior of passive rotor 

control strategies along with quantifying blade, wind shaft, and tower reactions to help manage 

rotor speed during governing and in unloaded conditions. Small changes to a blade design (such 

as the tip or leading edge shape) can greatly aid in reducing acoustic emissions without the need 

for redesigning the entire system. NREL’s initial R&D in this area has made promising 

advances; however, more research and product development are needed to achieve consistently 

quiet operation. 

Complexity of Technology Barriers 

The technology barriers discussed previously are not unique to any single small grid-tie wind 

turbine manufacturer but are common to all. Addressing these challenges will require 

considerable time and monetary resources beyond the capabilities of most manufacturers. 

Performance certification along with examining reliability issues is the natural role of a single 

independent national testing laboratory. Standards can be proposed by the industry, but 

compliance testing must be overseen by an outside source. A third party familiar with the issues 

of both inverter and turbine manufacturers is in the best position to bridge the gap and provide 

innovative system solutions. 

Many of the reliability improvements outlined in Section V can be applied incrementally in the 

form of minor detailed design changes or exchanging one component for a more reliable but 

otherwise equivalent component. Improved alternators, generators, and power electronics can be 

introduced to a design with relative ease if their basic specifications (such as the torque vs. RPM 

curve) are not significantly changed. 

50
 
Table 3-3. 2006 Grid-Connected Survey Responses 

Residential Wind Technical Barriers Not an 

issue 

Moderately 

Low Medium Moderately High 

Biggest 

Immediate 

Challenge 

Response 

Average 

Credibility with consumers/lack of 

effective performance standards & ratings 6% (2) 17% (6) 28% (10) 31% (11) 19% (7) 3.42 

Product Reliability 6% (2) 18% (6) 35% (12) 26% (9) 15% (5) 3.26 

Sound levels/quiet operation 6% (2) 21% (7) 44% (15) 26% (9) 3% (1) 3.00 

Manufacturer support 6% (2) 29% (10) 26% (9) 35% (12) 3% (1) 3.00 

Installation 3% (1) 38% (13) 29% (10) 21% (7) 9% (3) 2.94 

Hardware & shipping costs 9% (3) 40% (14) 26% (9) 14% (5) 11% (4) 2.80 

Power electronics & software 9% (3) 30% (10) 42% (14) 15% (5) 3% (1) 2.73 

Maintenance costs 9% (3) 35% (12) 44% (15) 12% (4) 0% (0) 2.59 

Engineering or reengineering of specific 

turbine components 16% (4) 36% (9) 36% (9) 12% (3) 0% (0) 2.44 

High cut-in speed/complete turbine 

redesign 13% (4) 47% (15) 28% (9) 9% (3) 3% (1) 2.44 

Designing self-erecting capabilities 21% (7) 30% (10) 33% (11) 15% (5) 0% (0) 2.42 

Some of the improvements may require major system redesigns. Certification may lead to 

substantial redesign of a system if that system is found to be unsafe. A new airfoil may change 

the rotor loads and performance so much that the supporting structure and controls would also 

need to be adjusted. In most cases, the use of a new tower would not require redesign of the 

turbine, but there may be situations, particularly for larger and/or constant-speed systems, where 

system changes would be necessary. 

While excessive sound levels from wind systems remain a large consumer issue, especially for 

residential DWT to access the suburban market, for some manufacturers acoustics are farther 

down the priority list. One possible reason is the complexity of the issue and the necessity of 

hiring outside expertise largely beyond the manufacturers’ resources. In addition, because of its 

complexity, variable geometry rotors have yet to be modeled satisfactorily. Such modeling 

would surely benefit all passive controlled machine manufacturers, as well as manufacturers of 

blade-pitch-governed machines that furl in high winds beyond their rated capacity and during 

unloaded operation. 

A dynamic look at a furling rotor under the influence of wildly varying angles of attack with 

specific attention paid to acoustic emissions would greatly aid the advancement of small wind 

technology. Development of such a model is likely beyond the scope of a single small turbine 

manufacturer, but it would benefit nearly all small turbine designs. 

51
 
Expected Turbine Size for Residential Distributed Generation 

Small wind systems for grid-connected residential applications require turbines in the 1- to 

25-kW range. The appropriate turbine size for residential applications is site specific and cannot 

be generalized. This wide range in turbine size takes into account variations in residential 

consumptions for different types of homes and energy conservation measures, the wind resource 

available, seasonal load variations, and economic incentives, such as net metering. This turbine 

range is also consistent with the wide variation in residential lot sizes and related zoning 

provisions (e.g., smaller turbines for more densely populated areas). 

The January 2006 survey of key industry participants conducted for this study revealed that the 

most common size for the residential market falls in the 1-kW to 25-kW range (96% of the 

responses falling within this range) based on the average U.S. residential consumption of 10,900 

kWh per year [34]. Currently, turbine models rated at 1, 2.5, 3, 10, and 20 kW are commercially 

available. Within this range of available turbines, there are notable gaps for 5- and 15-kW 

systems where development and substantial market growth could be seen if products become 

available. Turbines at the larger end of this range are expected to see only limited residential use 

because they have less attractive economics related to high upfront costs, limitations on threephase service in residential areas, height and setback restrictions on many residential lot sizes, 

and reduced production where there are height restrictions. Smaller turbines must be highly 

efficient to offer significant power output and competitive cost per installed kW of capacity. 

The DOE’s consumer guide for small wind electric systems states that for a typical home with an 

annual electricity consumption of 10,000 kWh, depending on the wind resource, a 5- to 15-kW 

wind turbine is required to make a significant contribution to this demand [35]. In the United 

States, load varies substantially by region and season as well as household size. Table 3-4 

provides a breakout of average residential load by state and region [36]. This information further 

supports the need for various turbine sizes for the residential distributed generation market. 

Feedback from dealers and installers reveals that many residential consumers install distributed 

generation systems to offset electricity costs and benefit the environment; few expect to export 

significant amounts of electricity to the grid [37]. Small wind residential systems, in the absence 

of annualized net metering, are generally sized to generate approximately 80% of the residential 

load to maximize the offset of retail energy. 

52
 
Table 3-4. Average Customer Load in kWh/year, by State and Segment 

Required Cost of Energy 

The survey conducted for this study indicated a range of $0.05-0.19/kWh in the retail cost of 

energy required for wind systems to compete in the grid-connected residential market without 

incentives, with most responses between $0.08 and $0.12/kWh. Consumers generally desire a 

payback period of 8 to 12 years, assuming nominal rate increases. In addition to electric rates, 

standby demand charges can impact the economics of small residential projects. 

Because residential DWT is usually an alternative to grid-connected electricity, its cost must be 

close to the cost of commercial energy to the end user for the project to be economically 

competitive. The residential retail electricity rates vary widely across the U.S. (Figure 3-4), with 

state averages ranging from about $0.06 to $0.18/kWh as of 2004 [38]. This data is useful to 

calculate the required cost of energy for DWT economic returns and to identify the key states for 

expected DWT market growth. The most common alternative to residential DWT, PV, currently 

costs about $7-10/W or around $0.20-0.35/kWh without incentives, compared to $4-7/W or 

$0.12-0.15/kW for grid-connected DWT sited in adequate wind resources [39]. 

53
 
Figure 3-4. United States residential average retail price of electricity by state, 2004 (cents/kWh) 

Seasonality and Geographic Nature of Wind Resource 

In general, most grid-connected rural residential areas with adequate wind resources are suitable 

for small wind turbines. However, turbulence resulting from the presence of trees, obstructions, 

and uneven terrain remains a significant problem for residential wind systems, particularly for 

the large suburban market and with towers that have less than 10 m clearance above nearby 

obstacles. 

Coastal marine environments can also cause problems for turbine operation over time. Power 

electronics in unheated spaces suffer from corrosion of connections, relays, and contactors. In 

warmer climates, serious tower erosion, slip ring corrosion, and shorting of windings can greatly 

reduce system life. 

The structure of net metering laws can have a significant affect on the economics of residential 

systems. Seasonal wind variations are strong in many regions with the result that a residential 

turbine may produce more energy than the consumer demands in some months and much less in 

others. Banking of excess generation on a yearly basis allows customers to accumulate electricity 

credits in the winter and spring when winds are typically strongest and use them in months when 

less wind is available. Annual net metering enhances the value of wind energy and reduces the 

54
 
cost and complexity of evaluating a site by eliminating questions regarding seasonal matching of 

load and wind. 

NREL’s research conducted to date has greatly aided performance in cold climates and with 

roughness-tolerant blades and is an example of how federal research and development programs 

can assist the industry. 

Impact of Intermittency on Residential Wind Energy 

The intermittency and variable nature of wind generation reduces the value of the electricity 

generated to some utilities. However, for residential applications, net metering essentially 

mitigates the intermittency issue because it lets wind turbine owners bank their excess generation 

with the utility for later use when the wind turbines are not generating enough power to meet site 

loads. If net metering is not available, intermittency of the wind resource reduces the amount of 

wind-generated electricity that can be used because any excess cannot be banked and must be 

granted or sold to the utility at “avoided cost.” Therefore, the owner has an incentive to undersize 

the wind turbine so as to minimize the excess sold back to the utility; because smaller wind 

turbines typically cost more per kWh, systems become less attractive without net metering. 

Wind resources typically are not well correlated with utility load profiles. Therefore, utilities still 

need to size their systems for peak load. While the cumulative amount of residential distributed 

generation may be significant, peak load correlation may be promoted as added value with 

utilities at the local level when there is a peak-coincident wind regime. Improved wind resource 

maps will be necessary to improve turbine siting and resource matching. 

A research and demonstration project for supervisory control systems that coordinate wind 

turbine operation with load management (discretionary electric loads, heating loads, refrigeration 

loads, etc.) and/or energy storage to enhance the performance and economics of distributed wind 

may be helpful to the grid-connected DWT industry. 

Interface between Turbine and Wind-Distributed Generation 

Typically, the interface of residential wind turbines is 120/240V AC at 60 Hz as this is the 

standard voltage and frequency of most residential loads. Smaller wind turbines in the range of 1 

to 10 kW use permanent magnet alternators that generate AC of variable frequency and voltage 

level, which must be converted using a power electronic inverter to DC and back to AC at 

120/240V at 60 Hz. Most residential loads have single-phase service, limiting the size options 

available for turbines without significant upgrades to the typical home’s electrical service. Larger 

wind turbines are three-phase because of the simpler, more robust design of induction machines. 

Any applications that smaller turbines might power in a residential setting will already have the 

ability to interface with 120/240 V and 60 Hz AC. The development of more versatile, efficient, 

reliable, and robust controllers/inverters with higher power quality is needed to improve the 

interface of small wind systems with residential service. 

VI. Recommended Areas of Technical Concentration 

The Future 

The United States dominates the international small-wind turbine industry, and the major 

industry participants are small, privately owned companies. Other governments (e.g., United 

Kingdom, China) are providing technical and market support for their fledgling small turbine 

55
 
manufacturing industries. Federal assistance in the form of R&D, performance standards, testing, 

and ratings will be required for U.S. manufacturers to continue to dominate and compete in the 

DWT market. 

Recommended areas of technical concentration for the grid-connected residential wind sector fall 

into four primary areas. 

Performance standards, testing, and ratings. In several cases, the lack of effective standards 

and consistent ratings has delayed the implementation of state rebate programs for small wind 

systems. The industry must establish hardware certification, conduct certified field tests, and 

release consumer-friendly standardized ratings for small wind turbine performance and sound 

levels. If these standards can be established, consumers will have reliable data upon which to 

base purchase decisions, and industry credibility will be enhanced. The existence of industry 

standards will also deter exaggerated product claims and unethical marketing. The industry 

requires federal assistance to develop performance standards, testing, and ratings. 

Reliability and performance. Power electronics are the most unreliable element in any wind 

system. Numerous technical enhancements are needed for increased robustness, reliability, and 

efficiency: integrated monitors, capabilities for PV inputs and alternate outputs, lightningtolerant components, acoustic and rotor loading enhancements, and maximum power point 

tracker technology. Direct-drive turbine alternators would benefit from more powerful supermagnets, reduced cogging, and a steeper or exponential output curve. Addressing reliability 

problems with gearboxes for direct-drive induction machines without inverters is also warranted. 

Low-wind regime technologies. New turbine technologies are required for cost-competitive 

energy in low-wind regimes, often characteristic of the suburban residential areas, which offer 

huge potential for distributed generation. Turbines must function reliably in low wind regimes 

(Class 2 and 3) and turbulent environments resulting from topography, vegetation, or ground 

structures. R&D investments include supervisory control systems that coordinate turbine 

operation with load management, improved electronics and integration systems, and lighterweight towers with self-erecting capability. 

Acoustics. Lower tip-speed ratios, higher solidity, and blade design will help reduce acoustic 

emissions. Computer models to predict the complex behavior of variables to help manage rotor 

speed are also needed. 

56
 
Table 3-5. Summary Information Table: Residential Power 

Domestic Grid-Connected Residential Wind Market Potential* 

Potential Market Size (cumulative installations) 

2005 9 MW 1,800 Units 

2010 29-44 MW 5,100-7,400 Units 

2015 72-211 MW 10,000-18,000 Units 

2020 170-1,000 MW 18,000-55,000 Units 

Regions of Specific Interest 

1. West Coast (California and Washington State) 

2. Northeast and Mid-Atlantic (New York, Massachusetts, Pennsylvania, Vermont) 

3. Midwest/Central (Texas, Ohio, Minnesota, Iowa, Wisconsin, Colorado) 

International Grid-Connected Residential Wind Market Potential* 

Potential Market Size (cumulative installations) 

2005 5.5 MW 1,100 Units 

2010 14-19 MW 2,500-3,300 Units 

2015 34-86 MW 4,800-11,000 Units 

2020 82-410 MW 8,700-37,000 Units 

Countries of Specific Interest 

1. Asia (Japan, China, India) 

2. Europe (United Kingdom, Spain, Italy, Germany, Netherlands, Greece) 

3. Central and South America 

* Grid-connected residential capacity has historically been less than 5% of the total DWT market (up to 

100 kW); however, that portion is expected to grow to more than 20% by 2020. 

Key Market Barriers 

1. Economics (total installed cost, cost of energy generated, payback period) 

2. Lack of incentives (financial and policy, state and federal) 

3. Zoning, permitting, neighbor perception, and public awareness 

4. Connecting to the grid (interconnection standards, IOU, and REC issues) 

Key Technical Barriers 

1. Lack of performance standards, testing, and ratings 

2. Product reliability 

3. Technologies for low-wind regimes 

4. Sound levels / quiet operation 

Expected Turbine Size Range: 

1 kW to 25 kW, market void for 5-kW and 15-kW turbines 

Expected Turbine Coupling 

Voltage: 120V to 240V, 60-Hz AC, the standard electrical service of most residential homes 

57
 
VII. Conclusions 

Small wind energy systems provide clean, renewable power for on-site use and help relieve 

pressure on the nation’s power grid while providing domestic jobs and contributing to energy 

security. America pioneered this technology in the 1920s, and it is the one renewable energy 

technology that the United States still dominates. American companies lead in both technology 

and world market share. In contrast to utility-scale wind turbines that no longer have a strong 

U.S. manufacturing base, more than 90% of small wind turbines installed in the United States are 

still manufactured in the United States. 

Actively engaging federal, state, and local governments in addressing key economic, policy, 

permitting, and public education barriers can ensure the realization of the energy security, selfsufficiency, and reliability that DWT promises. The DWT market will be vitally enhanced by 

cost-competitive and easily obtainable equipment, with production rates keeping up with 

growing market demand. Technology advances with rotors, towers, and controllers can 

substantially improve DWT performance, as well as ease installation complexity and 

maintenance. Industry standards, consistent policy and financial incentives, and public education 

campaigns will all help enable residential wind turbines to compete vigorously in the distributed 

generation market. On the other hand, if there are not credible, widely used performance and 

reporting standards for small wind turbines, there is a risk that some inexperienced 

manufacturers might sell unsafe or poorly performing systems that could damage the reputation 

of the entire wind energy industry. 

Federal assistance in the form of R&D, support for performance and rating standards 

development, and testing facilities and expertise will be required for U.S. manufacturers to 

continue to dominate and compete in the DWT market. A third party familiar with the issues of 

inverter and turbine manufacturers is in the best position to bridge the gap and provide 

innovative system solutions. Performance certification along with examining reliability issues is 

the natural role of a single independent national testing laboratory. Standards can be proposed by 

the industry, but compliance testing must be overseen by an outside source. Residential 

distributed wind generation would benefit from technology enhancements and public awareness 

programs to shift the business paradigm of rural electric co-ops to include support services for 

members generating wind power as a “cash crop.” Co-ops could aggregate wind power from 

members for sale to outside parties, upgrading their extensive distribution and transmission 

infrastructure for bi-directional power. Both IOUs and co-ops could offer sales, leasing, 

installation, and/or maintenance of wind turbines for rural residential members. 

The residential wind industry would benefit from a new detailed potential market analysis. With 

the emergence of more accurate wind resource maps, new low-wind turbine technologies, 

updated census data, and analysis of economic and social market drivers, a new in-depth market 

study focused on consumer motivations would provide valuable information to inform research, 

product development, marketing, and policy decisions. 

Widespread deployment of small wind turbines can increase the public’s familiarity with windenergy generation, attract mainstream media coverage, help mitigate concerns about visual and 

avian impacts, and pave the way for local community support for large wind developments. 

Small turbines, in particular installations at schools and other high-visibility locations, can 

become an important asset in reducing fears about unfamiliar technology, which in turn can help 

reduce the expense and unpredictable nature of siting and permitting large wind developments. 

58
 
For example, small turbines can be installed in selected neighborhoods to increase public 

awareness of residential wind options and provide an additional benefit by educating students on 

how electricity is made and the benefits of wind power. Neighborhood DWT installations can 

also help utilities increase customer interest and participation in voluntary green power programs 

and provide local “advertisements” of utilities’ involvement in renewable energy. 

The international market, and more importantly the international impact on the growth of the 

residential DWT market, is much larger than the capacity estimates indicate. The added 

megawatts of distributed grid-connected electricity can make a huge difference to people around 

the world. Energy security and grid stability can be greatly improved by spreading distributed 

generation over a broad area. Efforts to enhance the viability of the DWT industry will have 

major global benefits in securing future energy supplies and meeting increased demand for 

decentralized, affordable clean power. Mainstream adoption of DWT can enhance awareness and 

support for the entire wind-energy industry. 

VIII. Acknowledgements 

The authors thank the following individuals for providing invaluable industry insight and 

information for this study: Robert Preus, Abundant Renewable Energy; Michael Bergey, Bergey 

WindPower; Lawrence Mott, Earth Turbines; Larry Sherwood, Interstate Renewable Energy 

Council; Jim Green, NREL; and Jennifer Oliver and Andy Kruse, Southwest Windpower. 

We thank the following organizations who provided important perspectives in the DWT survey 

conducted for this study: Abundant Renewable Energy; Aerofire Windpower; Aeromax; 

Alternative Energy Institute; Appalachian State University; AWS Truewind LLC; Baca Green 

Energy, LLC; Bergey Windpower Co.; California Energy Commission; Conergy Inc.; DC Power 

Systems; Detronics Ltd; Earth Turbines, Inc.; EMS, LLC; Energy Options; Enertech, Inc.; ETM 

Solar Works; Halus Power Systems; hullwind.org; Interstate Renewable Energy Council; 

Intertribal Council On Utility Policy; Kidwind; Lawrence Berkeley National Laboratory; Lorax 

Energy Systems, LLC; Maine State Energy Program; Minnesota Department of Commerce; 

National Conference of State Legislatures; Northern Arizona University; Northern Power 

Systems; NYSERDA; PPM Energy; Responsive Load Limited; Shuttleworth & Ingersoll; SMA 

America; Solar Coaching; Southwest Windpower, Inc.; Suntec Energy Supply; Sustainable 

Automation LLC; Sustainable Energy Developments, Inc.; The Stella Group, Ltd.; The Wind 

Turbine Company; Ventera Energy Inc; and Vermont Department of Public Service. 

IX. References 

1. Windkraftanlagenmarkt 2005. Annual special edition of Erneuerbare Energien, Sun Media, 

Hannover, Germany, April 2005. Reported in Renewable Energy World, “WIND: Small is 

Beautiful,” September-October 2005, p. 123. 

2. Rhoads-Weaver, H. American Wind Energy Association, 2006. 

3. Leyshon, J. National Renewable Energy Laboratory, 2006. 

www.nrel.gov/analysis/repis/whatisRepis.html 

4. Renewable Energy World. “WIND: Small is Beautiful,” September-October 2005, p. 123. 

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“Potential for (UK) Microgeneration Study and Analysis,” 2005. 

59
 
6. Jim Green, National Renewable Energy Lab. Conversation with Amy LeGere, January 2006. 

7. National Rural Electric Cooperative Association White Paper on Wind Power, 2003. 

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RES-e Project. 2005. 

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www.renewabledevices.com 

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Level,” 2005. www.awea.org/AWEA_SWT_Market_Study_6-05.pdf. 

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2002. www.awea.org/smallwind/documents/31958.pdf; REFOCUS, “Small Wind Turbines: 

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March 2004. 

14. Database of State Incentives for Renewable Energy, 2006. www.dsireusa.org. 

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Level,” 2005. www.awea.org/AWEA_SWT_Market_Study_6-05.pdf. 

16. Renewable Energy World, September-October 2005. p. 121. 

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Market in Canada.” 2005. 

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March/April 2002. 

19. UK Department of Trade and Industry, Energy Saving Trust TM Econnect elementenergy, 

“Potential for (UK) Microgeneration Study and Analysis,” 2005. 

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Market in Canada,” 2005. 

21. Ryan Wiser, Lawrence Berkeley National Laboratory, “An Overview of Domestic and 

Global Markets for Wind Power Systems,” July 2004. 

22. China Business Weekly, March 17, 2005 and www.martinot.info/china.htm. 

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“Potential for (UK) Microgeneration Study and Analysis,” 2005. 

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Market in Canada,” 2005. 

26. Ryan Wiser, Lawrence Berkeley National Laboratory, “An Overview of Domestic and 

Global Markets for Wind Power Systems,” July 2004. 

60
 
27. Ryan Wiser, Lawrence Berkeley National Laboratory, “An Overview of Domestic and 

Global Markets for Wind Power Systems,” July 2004. 

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29. American Wind Energy Association, “The U.S. Small Wind Turbine Industry Roadmap,” 

2002. www.awea.org/smallwind/documents/31958.pdf. 

30. http://renewableenergyaccess.com/rea/news/story?id=35852. 

31. Ryan Wiser, Lawrence Berkeley National Laboratory, “An Overview of Domestic and 

Global Markets for Wind Power Systems,” July 2004. 

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33. U.S. Department of Energy, Energy Information Administration. 2004 Annual Electric 

Power Industry Report. 

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Based upon 118,763,768 residential customers and 1,293,586,727 MWh in retail sales to 

residential customers. www.eia.doe.gov/fuelelectric.html. 

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Electric Systems: A U.S. Consumers Guide,” 2005. 

www.windpoweringamerica.gov/pdfs/small_wind/small_wind_guide.pdf. 

36. Navigant Consulting, Clean Power Research, “PV Grid Connected Market Potential under a 

Cost Breakthrough Scenario,” September 2004. Prepared for The Energy Foundation. 

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38. U.S. Department of Energy, Energy Information Administration. 2004 Annual Electric 

Power Industry Report. 

39. Mike Nelson, Northwest Solar Center. Conversation with Heather Rhoads-Weaver, April 

2006. 

X. Bibliography 

American Wind Energy Association. Home and Farm Energy Systems: Reaching the Next
 

Level. 2005. www.awea.org/AWEA_SWT_Market_Study_6-05.pdf. 

American Wind Energy Association. The U.S. Small Wind Turbine Industry Roadmap. 

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Economic and Policy Analysis Tool. Ernest Orlando Lawrence Berkeley National laboratory.
 

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61
 
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Market in Canada. Contract No.: NRCan-03-0652. Prepared for the Wind Energy R&D 

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March 2004. 

62
 
Chapter 4. Farm, Industry, and Small Business 

Prepared by: 

Ken L. Starcher and Vaughn C. Nelson, West Texas A&M University, Alternative Energy 

Institute 

Robert E. Foster and Luis Estrada, New Mexico State University, Southwest Technology 

Development Institute 

I. Executive Summary 

Wind energy has proven to be one of the most economical, modular, and readily connected 

renewable technologies. Its use in agricultural, production plants, and small business/home 

applications will continue to grow for the next 20 years and beyond. 

This report is a summary of the expected growth areas, the growth rates, the necessary turbine 

style/sizes, and the barriers to sustainable market growth for the farm, industry, and small 

business wind market sector. 

The prime barrier is cost. Too few turbines are currently produced to obtain the economies of 

scale through volume production. Thus, favorable life-cycle costs will not be realized to sell 

these mid-size turbines alone. The economic payback has to be on the order of 4 to 7 years to be 

attractive compared to other similarly sized investments for agribusiness. The cost of energy 

(COE) is in direct competition to that of utility-provided energy at $10–$15/MWh. 

The second barrier is lack of installed infrastructure for the ongoing sales and maintenance of a 

distributed array of many types of turbines. Enough income must exist within 150 miles of a 

central service site to support $1 million/year in sales (20-25 turbines/year of 50-kW units). An 

installed base of 300 turbines is needed for an area to support a maintenance facility fulltime. 

However, a model of similar scale exists for the large farm implement market, covering the same 

size area, expected sales per year, and installed repair/re-supply base. 

The lack of enough matching turbines to the loads is the third most important barrier to the 

implementation of wind for the farm and small-business market. A 10-kW unit will meet all 

small loads. These units are available and easily connected through net billing laws in most states 

already allowing this size unit. Likewise, 50-kW turbines are in production and can help meet the 

farm-ranch-small irrigation market. Unfortunately, 100- to 250-kW units for center-pivot 

irrigation and agri-processing industry are very limited. And the 250- to 500-kW units for large 

industrial loads are no longer made in any significant quantities. 

One way to improve the potential sales is not to focus on turbine sales alone, but to develop the 

market in combination with demand-side energy management and full service of the turbines 

after installation. This would reduce owners’ worries regarding long-term O&M and also ensure 

that energy produced was used at the best value to the turbine owner (displacing energy that 

would have been purchased at retail rates from the utility). 

61
 
II. Application Background 

Wind energy use in the agricultural sector has a history of more than 1,000 years. Transportation 

of goods from source to market by sailing vessels and the use of wind for food processing and 

land reclamation in Europe demonstrate that wind power has enjoyed a long, broad-based 

acceptance as an energy source. 

During the past century, the wind has provided water for ranching and transportation 

requirements of American railways, providing a ready corridor for products to go from the 

Midwest producers to the populated consumer locations on the coasts. Before rural 

electrification, electric power was often supplied by small wind chargers with an on-site storage 

system of batteries. Wind power allowed rural residences to be entertained and informed and 

provided electric light and the powering of small appliances. 

Urban communities were also able to use renewables with the passage of the Public Utility 

Regulatory Policy Act (PURPA), allowing the interconnection of qualified renewable energy 

products. The generator size limits have only recently been raised to 20 MW by the Federal 

government. This should help promote the use of small wind for the farm, industry, and small 

business market sector. 

III. Current Status of Activities for this Application 

A 1990 report on the wind market in the Great Plains [1] described an annual market of 10,000, 

6,000, and 4,000 units for turbine sizes of 10 kW, 50 kW, and 250 kW, respectively. But this was 

true only if all production could be valued at retail rates. Using this $10/MWH value resulted in 

$660 million/year of expected value to the wind turbine owners. That report also stated that wind 

turbines would start to be fully economic in small business, agribusiness, and industrial-sized 

applications in 2000 to 2005. 

The development of wind turbines for the farm, industry, and small business market has been 

overshadowed by the development of wind turbines for the utility-scale market. Manufacturers 

have not emphasized production of the smaller turbines in more than 20 years, allowing the 

greater profits and market share to be driven by the megawatt-class turbines. Articles like those 

in North American Windpower reveal that small projects scattered in a wide geographic area can 

offer substantial system benefits [2]. Even though there is a penalty for single or small projects 

(5%-15% increased cost/turbine), they can be matched by better distribution of income/value 

than direct sales of electricity to utilities from a centralized wind plant. Small- and medium-sized 

wind turbine manufacturers exist all over the world [3], but the volume of machines needed to 

meet the expected market is not currently available. 

The value of displacing conventional energy versus direct sale of energy can be substantial (retail 

rate of $6-8/MWh versus wholesale rate of $2-3/MWh). The loss of Production Tax Credit 

(PTC) assistance from the independent sales of electricity is a burden for on-site users of wind 

energy, but not one that is too onerous to bear in these smaller configurations. The advantage of 

the increased value of displaced energy produced on site compared to direct sale of energy to a 

utility means that turbines can return value to the owner faster if interconnect can be allowed at 

higher power levels. 

62
 
IV. Market Barriers Issues and Assessment 

Expected Market in the United States 

The American Wind Energy Association (AWEA) conducted a complete market survey of more 

than 250 wind industry members. The results were included in a report on other barriers [4]. The 

questionnaire revealed the following areas of concern in the small wind (<100 kW) industry: 

economics, lack of consistent incentives, zoning-permitting, and interconnection issues. 

Additional views were collected from the U.S. Department of Agriculture and consultations with 

manufacturers of mid-size and small-size turbines. 

The market can take advantage of changing regulations to create sustainable growth for wind for 

small businesses and farms, given the Federal support in the United States of interconnection 

rules and individual states net-billing agreements. The turbine sizes that are most useful need to 

generate about 750 – 1,000 MWh per year in a decent (upper Class 3) wind regime. This is 

equivalent to a 250- to 300-kW unit. These sized units, returning $40,000 – $60,000/yr, would 

have simple paybacks in approximately 10 years. But this approach can only work if net billing 

is allowed and all the energy is used on-site (no wholesale sale of excess energy to the utility). 

This would help address the respondents’ concern that economics is the driving factor in the 

turbines’ perceived value. 

Currently, the readily available turbine sizes are smaller than the long-term market sizes (10 to 

50 kW, not 250 to 400kW), resulting in higher installed cost/kW. Economics are such that, even 

with net billing, it is difficult to recoup the initial cost of the system within a 15-year time frame. 

This has to be reduced to 10 years or less payback to obtain a rate of return that is acceptable for 

the high capital investment. 

These smaller wind systems have worked in the United States, and when properly sized along 

with utility cooperation, the systems performed with few start-up problems or long-term 

difficulties [5]. But even the more successful projects have increased in size toward the utilityscale turbines because those are most readily available for projects. Also, siting projects in states 

with significant incentives (Illinois, Minnesota, Iowa, Colorado) shows that where local value is 

placed on renewables, it is readily implemented. 

There is no specific problem with the turbine technology; the former sizes and designs are 

simply no longer in the production stream. The units that are available are at a premium because 

of low production volumes. Good turbines that are technically sophisticated are commercially 

available, but only for the smaller-size loads/energy use projects, delivering 100 to 150 MWh per 

year. But this energy level is not enough to offset the energy needed in most agricultural or food 

processing industries that are considered potential wind energy users. 

Non-technical barriers are mostly political in nature. The lack of consistent interconnection 

standards across states hurts the utilization of wind in some markets. The wide range of net 

billing techniques used in different states means that there are widely varying returns for units 

even in areas of similar wind power potential. There is no simple solution for these policy 

differences, but focusing on the states with the better wind resources and agricultural/industrial 

base (Midwest, Rockies, Southeast coast) to improve the existing net billing rules would provide 

the most fertile ground for future wind energy growth for this market sector. 

The existing mid-size turbine designs are from the 1980s and have historically been rugged, 

reliable, and readily reproduced. However, they are no longer the desired turbine sizes of choice 

63
 
for the utility-scale market and have fallen off the production horizon. This shows that large, 

megawatt-scale turbines have begun to displace conventional energy sources and that 

conventional energy costs have increased sufficiently so that wind is a viable economic 

consideration. But at present, the utility market is driving megawatt-size wind turbine 

production. 

Current manufacturers are using the turbines that are still in production and trying to match these 

smaller-scale energy loads (120 – 175 MWh/year) to the performance of available turbines. A 

recent meeting in Amarillo, Texas, hosted by Entegrity Wind Systems [6] (formerly Atlantic 

Orient Corporation) introduced several agricultural businesses to the idea of wind turbines 

displacing conventional energy use on the farm and the expected economics for such systems. 

The best incentives for the wind systems are currently the Federal funds available through 

Section 9006 of the U.S. Farm Bill and the guaranteed loan program of the U.S. Department of 

Agriculture. State programs have inconsistent support for renewables for the mid-size turbine 

market sector, with New Jersey the only state allowing the interconnection of up to 2-MW 

turbines and allowing net energy billing over a 12-month time frame. 

The expected wind energy markets for farm, industry, and small businesses are for any business 

that has energy use and sufficient resource to justify the use of wind energy. This includes the 

following: 

• Agriculture industry 

o Meat packing (large use of hot water/cooling facilities year round) 

o Food processing (industrial-scale plants that operate annually) 

o Peanuts, cheese, confined feedlots, etc. 

o Irrigation (center pivot units of 1/8 to 1/2 mile radius) 

• Machining 

o Foundries (metal heating and industrial-sized movements of metal) 

o Metal smelting 

• Small business – similar to home-size markets, similar-sized turbines. 

These industries and businesses have traditionally been found in rural areas of the United States 

and as such have fewer impediments to zoning and use of wind energy because they have more 

suitable land space for turbine installation. 

The expected COE has to be within 10% of the conventional sources of energy with expected 

annual growth in conventional energy to be 3% to 5% per year. Most agribusinesses will begin to 

lock in or hedge costs that they see as rising with other resources or long-term purchase 

agreements if they see the real costs as being equal to the projected costs in a 3- to 4-year time 

frame. Long-term planning for many businesses often includes an analysis of these types of 

operational expenses. 

A case in point is the Owens-Corning fiberglass plant in Amarillo, Texas, which has considered 

installing wind turbines on the property to offset long-term energy costs every 2 to 3 years over 

the past 8 years. Conventional power purchase has been deemed the least-cost option. But the 

64
 
next period of review may change because the projected energy cost growth has doubled 

compared to estimates from 2004. 

Studies of the seasonal wind resource variation show that the change in crop type and the 

watering schedule can be adjusted to meet the wind resource, allowing for maximum energy use 

during the production season. The variation with wind on power output is well understood, but 

with good cooperation between the user and the local utility/cooperative, the electrical problems 

are minimal and the only concern is the length of time the billing can be carried on the books. 

The New Jersey model allows wind energy from strong months to be used in the lowerproduction months. This is a good model that other states should consider; it would work well in 

any of the target areas: Midwest, Rocky Mountains, and Southeast coast. 

By using the standard utility inter-tie connection, the mid-size wind systems can be standardized 

for the U.S. grid. Making the flow of energy seamless from the utility to the user and back is the 

goal. This retains the benefit of the production on-site and having the conventional energy source 

as the backup to supply all the energy needed for the plant/business operation at any time, 

whether or not the wind is blowing. 

Expected International Market 

Internationally, the market will be driven by the need for energy and the desire for clean energy, 

with economics also as a consideration but with the other two factors playing a more deciding 

role for or against wind. Again the desire is for the larger-scale turbines placed in very good 

wind regions for a better economic return on investment. But in many cases overseas, there is 

subsidized support for conventional energy prices at the federal level, and so the cost paid by the 

consumer is lower than the true value of energy. This places wind energy at a disadvantage 

unless strong federal policies offset the value for the energy from renewables. The feed-in tariff 

rules in Germany have aided the industry there for years, setting a very good value for the 

electricity sent to the utility grid. The Peoples Republic of China has a state goal for the use of 

renewables at local and industry levels. The current 5-year plan demands the use of a set amount 

of renewables. This type of support will continue to push the wind markets in those countries in 

the future. 

V. Technical Barriers Issues and Assessment 

Studies have consistently shown that most potential users of small- to mid-size wind turbines for 

the farm, industry, and small business sector request ruggedness and reliability (low long-term 

maintenance). Users do not want to be burdened with a system that takes too much time from 

their other ongoing operations. Unfortunately, without a vast installed dealer network, some 

service and oversight has to come from the local users of wind systems. So if potential users are 

more familiar with required procedures, expected performance, and the typical operational 

characteristics of the turbine they plan to use, they will be better able to monitor non-optimal 

conditions, controlling the turbine or shutting it down until a trained repair crew can make sure 

the turbine can be returned to full-time operational use. 

The second most important concern is that because wind turbines are tall, they can attract direct 

lightning strikes. In the past, the conventional wisdom was that full lightning protection was 

impossible and that steps to minimize or offer alternate paths for the bolt/surge to dissipate 

without damage to components of the turbine were available, but not foolproof. Improved blade 

65
 
production methods have allowed for lightning pathways to be incorporated into the fabric of the 

blades and thus allow for the discharge of high-static conditions before they can build up to 

lightning-bolt levels. Improved electronics protection on the utility interconnection and the 

systems-controller sensors and electrical connections has improved turbine life and reduced 

downtimes. 

For those units that are considered small scale but still require utility inter-tie inverters, the 

reliability and longevity of these electronics units is of concern. Experience shows that even with 

recommended grounding and protection devices, the possibility for inverter damage from direct 

or nearby lightning strikes is never fully mitigated. The loss for the user is lost energy while a 

unit is repaired, as well as the replacement costs for electrically and mechanically removing the 

unit to return it for repair and then properly re-installing the unit once it is returned. 

None of these perceived barriers alone will stop the use of the technology. The wind turbine 

should still be considered like any other piece of industrial equipment; it is used to produce 

energy when the conditions are right and requires some small degree of supervision and 

attunement so that proper operation is readily noticed. When it’s not “quite right,” it is removed 

from service until it is repaired. 

The turbine sizes are in two stages. The smaller systems of 10 to 60 kW would be used for the 

home and small businesses/farm. The mid-size turbines of 250 to 400 kW would be used for the 

larger industrial operations that can utilize the energy from a system this size, while maintaining 

the utility interconnection on this scale and installing the electrical connections on the owner’s 

side of the utility meter. This distributed energy method of using what is needed on site would 

reduce stress on the utility lines, rather than becoming a large negative load outside the utility 

control. It would avoid many of the megawatt-scale system problems associated with utility 

system stability and interaction but still be of sufficient scale that a good economic return can be 

realized over time, thus making the mid-size wind turbines attractive to individual business 

operations. 

VI. Recommended Areas of Technical Concentration 

Technical problems are not as great a concern as the perceptual and economic issues. Large wind 

is getting a large boost from Federal and state incentives for large wind farm facilities 

(accelerated depreciation, Production Tax Credits, etc.). Unfortunately, this same level of support 

for farm/industry-sized turbines has been much less substantial. 

California offers a generous state buyback policy of $2,500 for the first 7.5 kW, then $1,500/kW 

up to 30 kW. Ohio is another state with aggressive support for wind energy of similar scale. New 

Jersey has the fewest limits for a wind turbine system (2 MW installed capacity and 12-month 

billing for net metering). Other states offer programs (for a comprehensive overview of available 

incentive programs, refer to the Database of State Incentives for Renewable Energy at 

www.dsireusa.org [7]. 

A future incentive program might be based on the non-emission/creation of NOx or SOx. 

Distributed wind systems should be allowed to have their fair share of any tradable credits or 

value once carbon-based trading for greenhouse gases becomes widespread (probably in the next 

decade). 

66
 
A ready market for distributed wind energy systems would be to allow rural electric cooperatives 

to install and operate their own wind facilities to offset energy costs from their wholesale 

supplier. This would match the rural connection, make the co-ops a maker of renewables rather 

than a skeptic of renewables, and match the expected windy areas of the nation to the key 

electrical providers in these areas. 

A new possible boost to development will be the 25 x ’25 program that is endorsed by several 

key agribusiness firms and farm cooperatives. While the main focus of these programs is the use 

of agriculture products in non-conventional energy sources (biofuels/biomass), the adoption of 

the targets of 25% of the U.S. energy sources coming from our rich agricultural lands by the year 

2025 will boost the use of dedicated wind energy sources. While most of the rhetoric included in 

the proposal that concerns wind energy is directed to large-scale wind farms, the benefit of 

distributed energy will have to be included in meeting this ambitious goal in the desired time 

frame. The expected impact to the numbers of units that can be installed is considered to be an 

increase on the order of 10% to 15% of the projections made in the summary table. Since there is 

no specific target or plan yet in place for this initiative, no impact is predicted from it. It is shown 

in our figures in the summary table. 

Finally, educational development for small businesses, industry, and farms on how to use midsize wind turbines to help meet their energy needs could be very helpful. Most potential users are 

simply not aware of how wind energy can help offset their energy costs, nor do they understand 

the technology or net metering. A few well-placed, successful, and publicized industry pilot 

installations could help lead the way toward larger-scale adoption across the industry sectors. 

VII. Conclusions 

The key concern for the wind industry will always be maximizing profit. When there is a market 

for a product or turbine type/size, such as the farm, industry, and small business market, a 

manufacturer will step up to meet that market potential. This will only happen when a long-term 

profit can be made for the company. When turbine sizes are available to meet a particular need, 

end users will compare costs to install/operate/maintain the turbine versus purchasing energy and 

will choose the option that makes economic sense. Unfortunately, the manufactured wind turbine 

sizes are, for the most part, below or above the required turbine sizes that can readily serve the 

farm, industry, and small business market. 

However, things may change as larger-capacity net metering policies gain in popularity. One 

turbine manufacturer is in production right now for a 50-kW unit and is willing to ramp up 

production; indeed, they are trying to generate market interest to make this a sustained turbine 

size/style. They are placing turbines in areas of increased public view to gain valuable public 

acceptance, as well as providing the performance information online to demonstrate how the unit 

is operating over time. 

The wind industry turbine manufacturers have drifted into producing higher-return, larger 

megawatt-scale turbines. Currently, one manufacturer [8] has a prototype 250-kW turbine 

undergoing testing, but this prototype has yet to be produced in volume. The designs are there, 

but production volumes of these turbines are currently very low and, thus, costs are high. Midsize turbines are no longer in the production plans of major manufacturers. 

The main issues for the farm, industry, and small business wind energy sector are more political 

than technical. The growth of this market sector will largely hinge on increasing fuel prices, net 

67
 
metering, and potential government incentives for clean energy technologies. The market will 

grow, but the rate of growth will depend on the convergence of these factors. 

Table 4-1. Summary Information Table: Farm, Industry, and Small Business 

Domestic Market Regions of Specific Interest 

(with net billing) (not year dependent) 

2010 200-300 turbines/yr 1. MidWest (Great Plains) 

2015 500-700 turbines/yr 2. Inter-Mountain (Rockies) 

2020 1,000 – 1,500 turbines/yr 3. Southeast Coastal Areas 

International Market Countries of Specific International Interest 

(dependent on incentives) (not year-dependent) 

2010 100-200 turbines/yr 1. Western Europe 

2015 200-300 turbines/yr 2. China/India 

2020 400-600 turbines/yr 3. Russia 

Key Technical Barriers 

Underdeveloped turbine sizes for irrigation market 

Maintenance availability 

Grounding/lightning susceptibility 

Inverter Reliability and Availability 

Key Market Barriers 

Net annual energy billing 

System costs, initial and long-term operation 

PTC/PPA unavailable to farmers/small businesses if energy not sold to third party 

Rural electric co-ops’ permission to inter-tie 

Expected Turbine Size Range 

250 kW to 500 kW irrigation, industrial-sized loads 

10 kW to 60 kW net-billing applications, on-site use of energy 

Expected Turbine Coupling 

Mechanical (High Speed:__; Low Speed:__; Nominal speed:_____ ) 

Electrical (Voltage: 240 to 480; AC X , DC__; Variable__ Constant X ) 

Thermal (Temperature: ______ ) Other: ___________ 

68
 
VIII. References 

1.	 Miller, J.D.; Willard, G. “Market for Wind Turbines in the Great Plains.” Windpower 1990 

Proceedings; September 24-28, 1990, Washington, D.C., pp. 206-210. 

2.	 Estill, G. “Industry at Large: Community Wind.” North American Windpower, March 2006, 

Vol 3, Number 2, pp.18-21. 

3. Nybroe, C. www.windmission.dk/workshop/wind sites.html. 

4.	 Market & Technical Barriers for Small-Scale Community Wind Applications, NREL/DOE 

draft document. 

5. Windustry Case Studies. www.windustry.org/community/projects.htm. 

6.	 Entegrity Wind Systems, March 13, 2006, Amarillo, Texas, Ambassador Hotel – USDA, 

Bushland meeting/tour. Presentations and tour of systems for agricultural use of wind 

energy on the farm and ranch. 

7. Database of State Incentives for Renewable Energy. www.dsireusa.org. 

8.	 Bergey Windpower Co. Wal-Mart installations at super stores with renewable energy and 

sustainable energy focus,
 

www.walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=445&contId=5642, 

www.walmartstores.com/Aurora/index.html#. 

9. The Wind Turbine Company. www.windturbinecompany.com/milestones/index.html. 

XI. Bibliography 

Consumer Energy Center, California, Emerging Renewables Program. 

www.consumerenergycenter.org/erprebate/program.html#rebatelevel. 

69
 
Chapter 5. “Small-Scale” Community Wind Power 

Prepared by: 

Heather Rhoads-Weaver and Meg Gluckman, eFormative Options, L.L.C. 

Brian Antonich and Lisa Daniels, Windustry 

Jonny Holz and Steve Grover, ECONorthwest 

Craig Hansen, Windward Engineering 

Mick Sagrillo, Sagrillo Power & Light 

Ed Kennell, Clean Energy Products 

Thomas Wind, Wind Utility Consulting 

Ron Lehr, American Wind Energy Association 

Amy LeGere, NetGenuity 

Thom Wallace, Ecofusion Multimedia 

I. Executive Summary 

This study estimates potential market growth and evaluates the major market and technical 

barriers that currently impede the development of “small-scale” community wind, a subset of the 

larger community-owned wind market utilizing turbines of 1 MW or less, to assist NREL, DOE, 

and the Wind and Hydropower Technologies Program in assessing potential technical research 

areas with large market opportunities. Market and technical questions are explored to identify 

high-priority areas for the Program to consider for future investment. 

A clear and available market for “small-scale” community wind is established. The current size 

of this market segment is estimated at 11,000 turbines currently installed internationally, totaling 

8.2 GW, which is approximately 20% of the 2005 EU wind market. As a mid-point forecast 

between lower- and upper-bound estimates, we expect this sector of the distributed wind turbine 

(DWT) market to grow to about 130,000 units, totaling 99 GW, by 2020. The U.S. “small-scale” 

community wind market and U.S. participation in the international market are currently facing 

major market and technical constraints that may be reduced or eliminated with focused Program 

support. 

This study concludes that the “small-scale” community market would be enhanced by research 

and development efforts, with the following high-priority research areas identified and 

recommended to be considered in further, more detailed studies: 

•	 Conducting grid-integration studies to identify the potential for “small-scale” wind 

development that would decrease or eliminate the need for transmission system upgrades 

•	 Advancing innovative designs for mid-size turbines, rotors, and towers optimized for Class 3 

winds, addressing productivity, installation, and maintenance issues 

•	 Designing, testing, and certifying advanced remote-monitored controllers to simplify the grid 

interconnection process and to support weak rural distribution systems 

•	 Developing technical training programs for mid-size turbine technicians (windsmiths) 

•	 Developing easy-to-use computer tools for analyzing project economics and modeling wind 

resources to assist with siting, seeking project financing, negotiating power purchase 

agreements, and taking advantage of incentives 

70 
•	 Developing a set of regional model zoning ordinances and educating local planning officials 

to aid in the adoption of responsible siting requirements, while streamlining approval 

processes for “small-scale” community wind. 

II. Application Background 

The scope of this study addresses “small-scale” community wind, a subset of the larger 

community-owned wind market. “Small-scale” community wind is defined as projects utilizing 

mid-size turbines of 1 MW or less in nameplate capacity, where an entity from the local area has 

a significant financial stake in the project outcome. “Small-scale” community wind projects 

typically connect to 13.8-kV or lower distribution lines, either behind the meter—thus offsetting 

a portion or all of the electricity used on-site by a load in the community—or using a dedicated 

transformer with all energy sold to the interconnecting utility. 

“Small-scale” community wind projects currently represent a decreasing segment of the larger 

community wind market because projects with larger turbines are becoming more economical, 

and turbines below 1 MW are increasingly less available for such projects. The trend can be seen 

in Figure 5.1, which shows large community wind projects in the advanced planning stages and 

projected to be commissioned by 2010. This study primarily examines the smaller segment 

shown in Figure 5.1. 

In recent years, with advances in turbine production and technology, wind energy has become 

competitive with traditional forms of electrical generation, and community stakeholders have 

latched onto wind-derived energy as a way to diversify and revitalize rural economies and 

become more energy independent. Numerous schools, universities, farmers, Native American 

Tribes, small businesses, rural electric cooperatives, municipal utilities, and even abbeys have 

installed their own mid-size and large wind turbines to promote environmental responsibility and 

keep energy dollars local. 

According to Windustry’s community wind project database, about 270 MW of communityowned wind projects are currently installed in the United States, representing $250 million in 

investment in rural communities. Of these, about 110 MW meet our definition of “small-scale” 

community wind, utilizing wind turbines under 1 MW. (See Appendix A for a table of “smallscale” community wind projects.) 

71 
MW (upper bound) 

Large Community Wind Development 

Small-Scale Projects (1 MW or less) 

U.S. Community Wind Market Growth Forecast 

1,800 

1,600 

1,400 

1,200 

1,000 

800 

600 

400 

200 

0 

2005 2007 2010 

Year 

Figure 5-1. United States large- and small-scale community wind energy market upper-bound 

growth forecast 

Unique business structures have been developed to aid community wind projects in taking 

advantage of federal and state incentives, such as the “flip” structure that involves an equity 

investor with a large passive tax appetite to allow community-owned projects to utilize the 

federal Production Tax Credit (PTC). Typically the equity investor is majority owner of the 

project for the first 10 years, when the tax credit is available to the project. The equity investor 

then flips its stake in the project to the community owners, usually accompanied by a payment 

from the community owners to the investor. This flip typically occurs in Year 11 or when the tax 

investor reaches the target return on investment, which is allowed to occur later. 

Because of the wind industry’s increasing focus on multi-megawatt turbines, the “small-scale” 

community wind sector is facing a major challenge of product availability. New cost-competitive 

mid-size turbine designs will be needed to ensure the future of the “small-scale” community 

wind market. 

III. Current Status of Community Wind 

The PTC has fostered rapid growth in large-scale wind development with periods of stagnation 

resulting from the advance planning requirements of large wind projects, typically 2 to 3 years, 

and the timing of extensions of the incentive, which have expired three times since it was created 

by Congress in 1992. This boom-and-bust cycle has caused apprehension for wind turbine 

manufacturing firms interested in opening facilities in the United States and led to major 

shortages of equipment, personnel, and business and legal expertise for smaller wind project 

developments while the incentive is available. Large wind turbines above about 900 kW are 

essentially unavailable for purchase for community wind projects until 2008, after the current 

PTC expires. In addition, very few suppliers are currently producing turbines in the 100- to 

1000-kW range. 

Elected officials across the United States and internationally are showing increased support for 

small and community wind. The 2005 Federal Energy Policy Act included a provision initiating 

72 
Clean Renewable Energy Bonds (CREBs) [1] that allow electric cooperatives, government 

agencies, tribal governments, non-profit organizations, and other entities that cannot utilize the 

PTC to apply for low-interest bonds to help finance wind and other renewable energy resources 

for local economic development. CREBs are an important new financing instrument for project 

ownership structures without a tax appetite and that don’t quality for the PTC. 

The state of Minnesota recently passed into law Community-Based Energy Development 

(C-BED), a special rate structure requiring utilities in the state to enter negotiations with 

qualifying, locally owned wind energy projects for payments in the first 10 years of the power 

purchase agreement at a higher rate than the past 10 years. The front-loaded payments are 

calculated based on a maximum of 2.7 cents/kWh net present value and the purchasing utility’s 

discount rate that is used for daily business operations. This rate structure does not impact the 

utility’s bottom line but greatly aids the wind project with debt service over the first 10 years of 

the project, helping to acquire financing, one of the major barriers for “small-scale” community 

wind project developments. 

The state of Iowa recently passed a tradable production tax credit that can be sold to a third 

party. This incentive was passed to help level the playing field between large corporate-owned 

wind projects that can easily take advantage of the federal PTC and locally owned community 

projects for farmers, schools, and other non-profit organizations that are either tax-exempt or 

cannot take advantage of the federal PTC. The program provided incentives for up to 90 MW of 

wind projects and was fully subscribed within 3 weeks of its first availability. 

Currently, there are at least 440 MW of new community-owned wind projects in the advanced 

planning stages, located mostly in the Midwest. The Governor of Minnesota has pledged that 800 

MW of new C-BED projects be developed within the state. However, community wind project 

developers are expecting to utilize turbines larger than 1 MW for nearly all of this new capacity 

because of their better economics. Nebraska, Texas, and Colorado are also emerging as leaders 

in the community wind market. Other states, including Oregon and Washington, have taken an 

interest in community wind, commissioning several studies to examine the barriers, economic 

impacts, and best models for community wind energy development [2]. 

John Deere recently provided equity investments in several wind energy projects in Minnesota, 

Texas, and other rural areas in the United States and abroad, creating a business unit to provide 

project development, debt financing, and other services to farmers interested in harvesting the 

wind. Deere’s new wind-energy initiative, supporting the company’s goal of “helping its 

customers improve their profitability and productivity,” signifies major growth potential in the 

market segment in attracting such a leading financial service provider. 

More than 500 participants attended Windustry’s third national Community Wind Energy 

Conference in Des Moines, Iowa, in March 2006 to learn about new models, best practices, and 

new state and federal programs that will promote community wind energy in the future. 

73 
IV. Market Barriers Issues & Assessment 

Expected U.S. Market for “Small-Scale” Community Wind Applications 

To date, about 110 MW of “small-scale” community wind capacity is installed in the United 

States, primarily in the Midwest [3]5

. Minnesota’s experience with community wind may be 

viewed as an indicator of the potential market for community wind in the United States given 

sufficient incentives, adequate wind resources, and an ample supply of cost-effective mid-size 

wind turbines. In 1997, Minnesota enacted a production incentive available for the first 100 MW 

of “small-scale” wind projects (less than 2 MW each) that applied. After 5 years, the limit was 

reached, and in 2003 the state legislature extended the incentive to cover an additional 100 MW. 

This time, the incentive was fully subscribed within 6 months [4].6 Even more indicative of 

potential growth is the fact that community wind projects in Minnesota are becoming cost 

competitive with larger commercial projects [5]. 

To estimate the future domestic market of “small-scale” community wind, this study examined 

both the DOE Energy Information Administration (EIA) U.S. wind capacity growth estimates 

and historical U.S. wind capacity growth. Because community wind has recently emerged in the 

U.S. market, these numbers do not specifically account for community wind growth but can be 

used in conjunction with recent “small-scale” community wind trends to create a reasonable 

estimate for future growth. Because “small-scale” community wind often competes with 

commercial wind in the market, using total wind capacity projections to estimate growth for this 

sector is not an unreasonable assumption. 

Some areas have developed markets specifically for community wind energy. In November 

2005, the Governor of Minnesota announced his administration’s objective to have 800 MW of 

Community-Based Energy Development (C-BED) projects commissioned by 2010. With 

growing interest in several states including Colorado, Oregon, and Massachusetts, similar 

markets could be created for “small-scale” community wind projects, creating substantial market 

growth even greater than the wind industry in general. 

EIA estimates that total U.S. capacity will grow at an average annual rate of 11% from 2005 to 

2010 and then 3% from 2010 to 2020 [6]. However, from 1998 to 2003, installed wind capacity 

grew an average of 28% per year [7], and growth from 2004 to 2005 was a record 35% [8]. This 

study estimates a conservative annual growth rate for “small-scale” community wind to be 8%. 

With favorable policies, economic conditions, and sufficient supply of competitively priced midsize wind turbines, the estimated average annual growth rate for this sector could be as high as 

28%. 

As shown in the Summary Information Table (Table 5-3), this study estimates that the 

cumulative installed U.S. capacity of “small-scale” community wind in 2010 has a lower bound 

of 220 units, totaling 160 MW, and an upper bound of 500 units, totaling 380 MW7

. These 

estimates are based on the 110 MW of installed “small-scale” community wind capacity as of 

5

 See Appendix A for a listing of community wind projects utilizing 100-kW to 1-MW wind turbines. 

6 Some of the projects listed in this cited report are turbines over 1 MW and therefore do not fit the definition of “smallscale” community wind for this study. 

7

 Estimates assume an average turbine size of 750 kW, which is the current average for U.S. “small-scale” 

community wind projects utilizing turbines 1 MW or less, documented in the Windustry database.
 

74 
2005, the current average “small-scale” community wind turbine size of 750 kW, and the 

estimated lower- and upper-bound growth rates discussed above. Assuming the same growth 

rates, the lower- and upper-bound estimates for the cumulative installed U.S. capacity for this 

sector are 320 to 1,700 units totaling 240 to 1,300 MW in 2015 and 470 to 6,000 units totaling 

350 to 4,500 MW in 2020. 

Regions of interest. Based on projects installed and planned as documented in Windustry’s 

community wind database, as well as responses to the January 2006 survey of 46 key industry 

participants conducted for this study, ten of the states of specific interest for the “small-scale” 

community wind market fall into three primary regions: 

• Midwest (Minnesota, Iowa, Nebraska, Texas, North Dakota, South Dakota, Illinois) 

• Northeast and Mid-Atlantic (including Massachusetts, New York, Vermont) 

• West (Colorado, Montana, California, Oregon, Washington, Alaska). 

Expected International Market for “Small-Scale” Community Wind Applications 

The European Union (EU) has been the historic leader in community wind. In 2000, about 80% 

of installed wind turbines in Europe could be considered community wind [9]. By the end of 

2005, Europe had 40.5 GW of installed capacity and therefore close to 32 GW of community 

wind [10]. Since Europe is by far the largest market for community wind, assuming that 25% of 

these turbines are 1 MW or less with an average turbine size of 750 kW, a fair estimate of the 

current international market in this sector is 11,000 turbines totaling 8.1 GW. 

From 1995 to 2005, Europe realized an average annual growth in wind capacity and number of 

installations of 32% and 22%, respectively [11]. Using this historical information and recent 

trends, this study estimates the future international market for “small-scale” community wind to 

have a lower-bound annual growth rate of 10% and an upper bound of 22%. The slightly higher 

lower-bound estimate, compared to the U.S. estimate, reflects the fact that the “small-scale” 

community wind market is already firmly established in the EU. The upper-bound estimate is 

lower than the U.S. estimate for this sector, reflecting the maturity of the European market and 

the overall direction of the EU wind market toward large offshore wind development. 

Starting with the estimated total installed capacity of 8.1 GW in 2005 and assuming an average 

turbine size of 750 kW, this study estimates that the international cumulative installed capacity in 

2010 will have a lower bound of 17,000 units totaling 13 GW and an upper bound of 29,000 

units totaling 22 GW (Table 5-3). Assuming the same growth rates, our lower- and upper-bound 

estimates for cumulative international installed capacity are 28,000 to 79,000 units totaling 21 to 

59 GW in 2015 and 45,000 to 210,000 units totaling 34 to 160 GW in 2020. 

Regions of interest. Responses to the survey conducted for this study indicate that the major 

international markets for “small-scale” community wind, offering substantial export 

opportunities for U.S. manufacturers of mid-size turbines, fall in the following regions: 

• Europe (Germany, Spain, Denmark, Norway, Netherlands) 

• Asia (China, India, Russia) 

• South America/Central America 

75 
• Africa 

• Canada. 

Germany and Spain are of particular interest and currently are leading the EU in growth and 

installed capacity. These two countries accounted for 58% of the total wind capacity growth in 

the EU in 2005 and 70% of the total installed capacity in the EU [12]. Canada shows signs that it 

will follow the lead of many European nations by enacting feed-in tariff laws to encourage wind 

energy growth. To date, only Ontario has enacted a feed-in tariff, but there has been growing 

support by other Canadian provinces to enact similar tariffs. 

“Small-Scale” Community Wind Technology Adoption Time Frame 

The entire wind industry would benefit from a concerted media campaign with increased news 

coverage of positive reports on the successes of wind power, similar to current press conferences 

on “clean coal” and nuclear energy, and highly visible recommendations to elected officials to 

maximize the use of abundant wind resources for clean electricity generation within the next two 

decades. Global energy supplies are at a point where as much wind as possible needs to be 

installed on a short time frame to prove it can be successfully integrated into the grid and other 

existing infrastructure. Because distributed wind generation can be installed in a shorter turnaround time than large-scale wind farms, identifying and addressing the barriers for “smallscale” community wind should be considered a high-priority activity. Field studies on the 

distribution grid need to be conducted before and after distributed wind generation is installed so 

the costs and benefits can be clearly documented and highlighted for administrative and policy 

proceedings. Results and recommendations are critical in building arguments such as in Illinois, 

where Commonwealth Edison (ComEd) has proposed energy fees for community wind projects. 

ComEd plans to track the penalties for imbalance that FERC allows without giving credit for 

benefits such as reinforcing the grid. 

Utilities often highlight the negative impacts of distributed generation in interconnection policy 

proceedings; however, the benefits to the grid are rarely recognized. For example, distributed 

wind turbines installed in strategic locations can provide reactive power support with substantial 

benefits to weak feeders that experience voltage-regulation problems. Technical guidance and 

strategies are critically needed for using the grid more efficiently. 

Given the boom-or-bust cycles in the utility-scale wind turbine industry, small community wind 

project developers are often squeezed out of the market when manufacturers deal almost 

exclusively in large volume orders rather than the one or two turbines that many community 

wind projects seek. This is leading some community wind developers to consider smaller 

turbines in the 50-kW to 500-kW range as a viable alternative to the more cost-effective multimegawatt turbines. Only a few turbine suppliers, including Energy Maintenance Services, 

Fuhrlander, and Entegrity have products available to fill this growing niche. 

The lack of available mid-size wind turbines has led to other problems with the development of 

“small-scale” community wind projects. Because the PTC is difficult for most community wind 

project owners to utilize on their own because of the requirement for large passive tax appetites8

, 

8

 Passive tax refers typically to tax paid on rent, interest, and dividends, as opposed to earned income. A 1-MW 

wind project with a capacity factor of 33% has the potential to utilize about $55,000 per year based on the PTC’s 

current level of 1.9 cents per kWh, which is above the level of many community members or groups wishing to 

(footnote continued) 

76 
equity partner investors must be found before financing can be secured. Power purchase 

agreements must be negotiated with the host utility, and insurance must be secured based on 

specific equipment orders. All of this means that the developers of community wind projects 

must juggle many balls, and the falling of one means the unraveling of an entire project. Once 

the project developer identifies an interested equity partner and secures financing, the availability 

of the PTC narrows the potential construction window. Inside that window, the developer must 

secure firm delivery on the turbine, tower, transmission/interconnection requirements, critical 

construction equipment including an adequate crane, permitting (including conditional use 

permit or zoning approval), project financing, and a power purchase agreement before the 

expiration of the PTC. While larger projects face these same obstacles, they are in a much better 

position to gain the attention of equipment manufacturers, contractors, investors, and financers. 

Some “small-scale” community wind project developers have turned to the used wind turbine 

market for hardware to install in lieu of new equipment. There are several challenges with this. 

First of all, this equipment is typically not optimized for Class 3 sites where there is much 

interest in small wind projects. More important, these older designs are not able to take 

advantage of the technology advances that have occurred in the past two decades and often have 

not completed a comprehensive “remanufacturing” process. 

Finally, some investors are beginning to look at biodiesel, landfill gas, biomass, cogeneration, 

and ethanol as investment opportunities. Unfortunately, if mid-size wind turbines cannot meet 

the needs of investors and owners in a reasonable time frame and supplement these technologies, 

the distributed generation market will move forward without the significant participation of 

“small-scale” community wind. 

Based on analysis of critical path technologies, the following measures are expected to enhance 

the viability of the “small-scale” community wind market: 

•	 Conducting more in-depth analysis of the steps needed to transition the utility grid from the 

one-way distribution of energy that it was originally designed for into an efficient multidirection system that not only distributes electrons but also acts as an aggregator for 

electricity produced in rural areas. 

•	 Incorporating voltage support capability into turbine designs to increase benefits from 

distributed wind generation in areas with weak grids. The technology already exists and 

needs to be made available to the U.S. market. One mechanism would be the development of 

a national standard or grid code for voltage support from distributed wind, similar to the 

Irish, Danish, and German grid codes, incorporating standard interconnection technical 

requirements for wind energy conversion systems. 

•	 Designing reliable, easily installed, and easily maintained advanced mid-size wind turbines 

that are optimized for Class 3 wind regimes based on existing designs. This could be 

accomplished in a year with sufficient funding. Bringing that design to the prototype stage 

would take another year, followed by at least 2 years of beta testing. It would take another 

invest in wind energy. Tax-free institutions such as public schools, government agencies, and non-profit 

organizations suffer from the inability to utilize this incentive. 

77 
year to prepare the new product for the market, bringing the total timeframe for adoption to 5 

years. 

•	 Developing advanced controllers that meet a certified national standard. These could be 

designed in a year, with field testing and certification by a certifying agency like 

Underwriters Laboratories (UL) consuming another 2 years. 

•	 Developing user-friendly computer tools for analyzing “small-scale” community wind 

project economics to assist with seeking project financing, negotiating power purchase 

agreements, and taking advantage of incentives. 

Non-Technical Barriers for “Small-Scale” Community Wind Technology Adoption 

As shown in Table 5-1, responses to the January 2006 survey of key DWT industry participants 

conducted for this study indicate that the most significant market barriers for “small-scale” 

community wind are turbine availability, economics, interconnection, and permitting9

. New 

legislation supporting locally owned wind projects could include incentives for rural electric coops to develop their own projects and/or partner with their members, financial vehicles allowing 

capital for distributed wind projects to aggregate, and interconnection standards. 

Turbine availability. As described above, large-scale wind turbine production continues to be 

driven by the PTC, which results in turbine shortages for the “small-scale” community wind 

market, inflated costs, and an industry emphasis on the largest turbines commercially available. 

Economics. Coordinated public policy and consumer awareness programs are needed to aid 

“small-scale” community wind development in meeting market demand. Economic factors, in 

order of importance, include the following: 

•	 Total installed cost 

•	 Return on investment (perception of value) 

•	 Inadequate net metering/net billing 

•	 Lack of project financing 

•	 Permitting costs and time 

•	 Lack of utility-sponsored programs and marketing for wind 

•	 Lack of financial incentives (rebates, buy-downs, loans) 

•	 Lack of tax incentives (sales, property). 

Interconnection. Connecting to the grid with rural electric co-ops and investor-owned utilities is 

ranked as an important market barrier for “small-scale” community wind. Increased awareness 

and support among public and private utility personnel will be necessary for wind to be included 

in utility-marketing distributed generation programs. A marketing and public awareness program 

targeted at utilities would benefit “small-scale” community wind, with particular emphasis on 

9

 Online survey of key industry participants conducted in January 2006 for this study. 

78 
outreach to rural utility representatives highlighting customer satisfaction and community 

stakeholder benefits of generating electricity with locally owned mid-size wind turbines. 

Permitting and siting. The development of a set of regional model zoning ordinances for midsize wind turbines with consideration given to proper setbacks for sound levels and safety, 

attention to avian issues and wildlife areas, and visual impacts on the landscape, with different 

conditions based on land use and the size of projects, could help to streamline permitting 

processes for “small-scale” community wind projects. Dissemination of best-practice 

recommendations and education of local planning agencies can aid in the adoption of responsible 

and appropriate siting requirements for community wind projects. 

79 
Table 5-1. 2006 Survey Responses on “Small-Scale” Community Wind Market Barriers 

Community Wind Market Barriers Not an issue Moderately 

Low Medium Moderately High 

Biggest 

Barrier 

Response 

Average 

Turbine availability 3% (1) 15% (5) 29% (10) 29% (10) 24% (8) 3.56 

Economics/out-of-pocket costs (total 

installed cost) 0% (0) 12% (4) 30% (10) 48% (16) 9% (3) 3.55 

Economics/perception of value (cost 

of energy, return on investment) 3% (1) 11% (4) 34% (12) 37% (13) 14% (5) 3.49 

Connecting to the grid (rural electric 

co-op) 9% (3) 12% (4) 26% (9) 32% (11) 21% (7) 3.44 

Connecting to the grid (investorowned utility) 9% (3) 16% (5) 28% (9) 38% (12) 9% (3) 3.22 

Inadequate net metering/net billing 9% (3) 24% (8) 24% (8) 33% (11) 9% (3) 3.09 

Lack of financing 3% (1) 26% (8) 35% (11) 32% (10) 3% (1) 3.06 

Permitting costs and time 6% (2) 23% (7) 45% (14) 16% (5) 10% (3) 3.00 

Visual impacts/neighbor concerns 7% (2) 30% (9) 23% (7) 37% (11) 3% (1) 3.00 

Lack of utility-sponsored programs 

and marketing for wind 6% (2) 25% (8) 38% (12) 25% (8) 6% (2) 3.00 

Lack of incentives (rebates, buydowns, loans) 9% (3) 27% (9) 27% (9) 30% (10) 6% (2) 2.97 

Restrictive zoning 6% (2) 28% (9) 44% (14) 6% (2) 16% (5) 2.97 

Lack of tax incentives (sales, 

property) 12% (4) 21% (7) 36% (12) 27% (9) 3% (1) 2.88 

Low public awareness/support 10% (3) 29% (9) 29% (9) 29% (9) 3% (1) 2.87 

Owner/Operator 

Convenience/Complexity (siting, 13% (4) 23% (7) 37% (11) 27% (8) 0% (0) 2.77 

installation, maintenance) 

Wind myths (reliability, sound, 

aesthetics, safety, avian impact) 10% (3) 32% (10) 32% (10) 26% (8) 0% (0) 2.74 

Lack of consumer access to wind 

resource information/maps 26% (8) 32% (10) 42% (13) 0% (0) 0% (0) 2.16 

Time-Critical Nature of “Small-Scale” Community Wind Technology 

Community wind projects are characterized by desires to own productive wind assets for the 

benefit of investor groups, public, educational, tribal, special district, or cooperative corporate 

entities. Often the motivation is to invest for the benefit of a local (usually rural) area by keeping 

money in the local economy, rather than paying for imported fuel resources or returning 

80 
investment profits to remote owners. The projects aim to create, and keep, an economic surplus 

by using local wind resources, owning the means of production locally, and supplying power on 

an export basis to bring money into the local economy. These projects are normally of a scale 

that requires power purchase agreements with utilities or access to real-time markets that can 

absorb power in addition to the requirements of the local owning entity. At the same time, the 

scale of these projects does not generally offer access to markets for the lowest cost power 

because they are generally too small to achieve the economies of scale of larger commercial 

projects. 

Critical timing issues impact numerous characteristics of “small-scale” community wind 

projects, including the following: 

•	 The availability of the federal PTC or a comparable incentive and whether “small-scale” 

community projects can find business and tax structures to benefit from it 

•	 For turbine prices and availability, mechanisms for encouraging the aggregation of “smallscale” community wind turbine purchases and the cooperation between community wind and 

large commercial projects can be created to help address these issues 

•	 For access to low-cost financing, Clean Renewable Energy Bonds (CREBs), for example, are 

limited in amount and have short application deadlines10, and USDA grant programs are not 

guaranteed to be fully funded 

•	 The staying power of community wind power proponents is a factor. The leadership required 

to mount and sustain a community wind project proposal can be exhausted by the need for a 

long campaign to structure an entity, identify land, access wind data, complete required 

studies, obtain a conditional use permit or zoning approval, and secure easements, turbines, 

transmission access and terms, and negotiate a power purchase agreement 

•	 Policy and program support is needed. There is tremendous potential for the renewable 

energy initiatives in the Farm Bill to grow to be a significant aspect of the rural economy, but 

technical guidance is needed to prepare the rural infrastructure in anticipation of more 

distributed wind generation. Once the grid integration issues are addressed, policies can be 

developed to give priority to local generation. Because the economics of the power from 

smaller wind projects do not readily win contracts in bulk-power markets focused on lowest 

costs, sources of additional support, either in policy or financially, must be located, engaged, 

and brought to bear on projects. The timing and effectiveness of programs and policies that 

support “small-scale” community wind projects have an important impact. 

•	 The output of community projects can usually only be sold to a single buyer: an electric 

utility. Because most projects are in rural areas and many rural areas do not have access to 

effective competitive wholesale electric energy markets, the cooperation of an electric utility 

will be required to purchase the power produced by the community-owned project. Utility 

cooperation varies widely, depending on the market and policy conditions that impact utility 

generation acquisitions. Policy can create markets for community wind, as evidenced by 

initiatives in Iowa and Minnesota that are leading the way. 

10 Made available on 1/1/2006, applications are due 4/26/2006 for all CREBs to be issued before 1/1/2008. 

81 
Subsidy Market for “Small-Scale” Community Wind 

The U.S. government offers a variety of incentives for wind projects, including USDA Farm Bill 

Section 9006 grants, the Production Tax Credit11, an accelerated depreciation system, and the 

Renewable Energy Production Incentive (REPI)12; however, few are optimal or available for 

mid-size turbines. Community wind projects are beginning to receive some subsidies from states, 

although the current state subsidy market is still limited. In Minnesota, noteworthy exceptions 

are Xcel Energy’s standardized purchase tariffs; Renewable Energy Production Incentive 

(Minnesota REPI); tiered tax rates13; Xcel Energy Renewable Development Fund; and 

standardized interconnection policies are noteworthy exceptions. Low-interest loans, grants, tax 

deductions, and technical assistance are also available in some states [13]. 

In the international community, particularly in EU countries, feed-in tariffs14 have led to 

substantial community wind markets [14]. Germany has had a renewable tariff policy since 1991 

and currently has more total wind capacity (more than 18,000 MW) than any other country in the 

world [15]. Ten countries15 currently have some variation of a feed-in tariff for wind generation 

[16]. 

Utility Industry Impact of “Small-Scale” Community Wind 

Community wind projects utilizing turbines less than 250 kW in size have negligible electrical 

impact on the distribution grid, whereas a 2-MW wind project can have a potentially significant 

electrical impact on a 12.47-kV rural distribution grid and limit locations for connection to the 

distribution grid. Excess generation from most community wind projects is sold directly to the 

local distribution utility or its wholesale provider at the established “avoided cost” or a relatively 

low wholesale rate in the 3¢ to 4¢ per-kWh range. Under this arrangement, the wind generation 

does not reduce the retail revenue of the local utility and thus should not affect the local utility’s 

finances. Instead, the wind turbine becomes just another bulk power resource used by the 

wholesale power supplier in the area. Therefore, even though there are some exceptions, the 

local distribution utility should be indifferent to community wind generation. 

Mid-size wind turbines used to provide power to schools or businesses under net metering 

policies can cause noticeable reductions in small utilities’ retail revenue. In these instances, the 

local utility may discourage a large number of these installations. However, in general, “smallscale” community wind should have minimal impact, if any, on the utility industry’s electrical 

system or finances. 

11 The Renewable Electricity Production Tax Credit (PTC) has expired three times since it was first enacted in 1992. 

The PTC provides $0.019/kWh and is currently effective until the end of 2007. 

12 REPI provides $0.015/kWh and was effective until the end of 2006. 13 For more than 12 MW, the tax is 0.12 cents/kWh, between 2 MW and 12 MW the tax is 0.036 cents/kWh, and for 

projects between 0.25 MW and 2 MW the tax is 0.012 cents/kWh.

14 Feed-in tariffs create a standard permitting process and a fixed price for electricity purchased from specified 

renewable electricity generators. 

15 This number does not include the United States, although Minnesota has initiated a limited renewable tariff and 

California currently has a renewable feed-in tariff for PV. Countries that currently have renewable tariffs for wind 

generation include Austria, Brazil, China, France, Germany, Greece, PEI (Canada), Portugal, Spain, and The 

Netherlands. For a complete listing of international renewable energy policies, see the International Energy Agency 

Global Renewable Energy Policies and Measures Database at www.iea.org/textbase/pamsdb/grresult.aspx?mode=gr 

82 
V. Technical Barriers Issues and Assessment 

Technology Barriers for “Small-Scale” Community Wind 

Four primary technical barriers have been identified that are slowing the widespread application 

of “small-scale” community wind projects. These barriers are listed in order of importance and 

share some commonality over a wide range of turbine sizes. Table 5-2 shows responses to the 

January 2006 survey of key DWT industry stakeholders conducted for this study on technical 

barriers for “small-scale” community wind. 

Grid interconnection and integration. Interconnection processes could be greatly simplified by 

more sophisticated remote-monitored controllers, which are certified to meet a national standard. 

Such controllers can allow the turbine to support weak rural distribution systems while taming 

voltage excursions, flicker, and supplying reactive power support to the system, as well as 

monitoring system health and logging important system events. 

Distributed generation grid-integration studies completed to date are just a starting point. More 

in-depth analysis is needed on what is required to transition the utility grid system from the oneway distribution of energy that it was designed to do into an efficient multi-direction system that 

not only distributes electrons but also acts as an aggregator for electricity produced in the rural 

areas of the countryside. The national grid is woefully inadequate to function this way today. The 

discussion must progress to understand what technologies are required to move forward. 

Turbine and tower options. Technology is needed to optimize the next generation of mid-size 

wind turbines for Class 3 wind regimes. Advanced rotors with lower rotational speeds could 

yield longer fatigue life and lower acoustic emissions. Innovative tall towers, especially for 

refurbished machines, would boost energy capture while diminishing turbulence. 

Installation and maintenance. Reliability and maintainability are becoming more of an issue 

for community wind projects as challenges with heavy crane access, a lack of trained 

technicians, and parts shortages are leading to delays in installation and increased turbine 

downtime. Easing the installation complexity while increasing the reliability and service 

intervals of future mid-size wind turbines, along with simplifying the troubleshooting and 

maintenance regimen, could make the community wind machine just another agricultural 

implement. The development of “wind smith” technical programs to provide for a larger set of 

skilled turbine technicians to aid in operations and maintenance of community-owned projects 

will be key. 

Performance projections. Although current resource assessment techniques have yielded 

satisfactory results, a more timely means of quantifying a wind regime must be found. Wind 

resource modeling coupled with short-term on-site measurement and correlation to a base station 

has been helpful for numerous sites in Iowa. Wind resource assessment programs specifically 

targeting “small-scale” community wind projects coordinated with rural economic development 

agencies could greatly aid the market. Wind forecasting, which is becoming fairly common in 

the larger wind farms, could be applied to distributed systems and add value to their energy 

product. 

Community wind can make it possible for small rural groups to take an active role in their 

energy future while providing all the benefits of placing clean generation close to the point of 

use. By spreading distributed generation over a broad area, energy security and grid stability can 

be greatly improved. 

83 
Table 5-2. 2006 Survey Responses on “Small-Scale” Community
 

Wind Technical Barriers
 

Community Wind Technical Barriers Not an 

issue 

Moderately 

Low Medium Moderately High 

Biggest 

Immediate 

Challenge 

Response 

Average 

Grid interconnection 7% (2) 7% (2) 28% (8) 38% (11) 21% (6) 3.59 

User-friendly peformance ratings for 

mid-sized and refurbished turbines 4% (1) 29% (7) 38% (9) 29% (7) 0% (0) 2.92 

Hardware & shipping costs 11% (3) 30% (8) 37% (10) 7% (2) 15% (4) 2.85 

Manufacturer support 4% (1) 28% (7) 48% (12) 20% (5) 0% (0) 2.84 

Installation 8% (2) 35% (9) 35% (9) 19% (5) 4% (1) 2.77 

Product Reliability 12% (3) 38% (10) 23% (6) 23% (6) 4% (1) 2.69 

Maintenance costs 12% (3) 31% (8) 42% (11) 15% (4) 0% (0) 2.62 

Power electronics & software 4% (1) 48% (12) 36% (9) 12% (3) 0% (0) 2.56 

Sound levels/quiet operation 8% (2) 48% (12) 28% (7) 16% (4) 0% (0) 2.52 

Engineering or reengineering of specific 

turbine components 15% (3) 50% (10) 10% (2) 20% (4) 5% (1) 2.50 

Designing self-erecting capabilities 24% (6) 40% (10) 8% (2) 24% (6) 4% (1) 2.44 

High cut-in speed/complete turbine 

redesign 13% (3) 58% (14) 17% (4) 13% (3) 0% (0) 2.29 

84 
Complexity of “Small-Scale” Community Wind Technology Barriers 

Each of the barriers discussed in the previous section presents substantial technical challenges 

that can be reduced or eliminated by focused R&D efforts. 

The electricity grid is regarded as the most complicated system that humankind has ever 

constructed. Understanding its limitations and how to utilize it more efficiently should be a 

national priority. Building on and expanding the scope of distributed wind generation grid 

integration studies, such as those performed by Tom Wind and Mike Michaud, focusing on key 

states, can help to show that the traditional approach of extensive upgrades to the transmission 

system is not always the most economic and efficient way to expand the market for renewable 

energy. Conducting these studies will take the cooperation of utility companies; researchers; 

politicians at the local, state, and national level; and community groups examining the actual and 

potential impact of distributed wind generation on existing transmission and distribution 

infrastructure. More detailed studies must be carried out on the local distribution level to define 

where added generation can be connected with minimal system upgrade costs, which typically 

are assigned to interconnecting project owners. 

A new generation of mid-size turbines designed for low-wind regimes will obviously require the 

application of many technologies and require a substantial investment. This process could begin 

immediately and take advantage of new technologies or design methods that become available 

during the design. Use of innovative tower concepts for new or refurbished systems is likely to 

require substantial design analysis to ensure that dynamic interaction problems will not be 

induced by the new towers. The basic technology required for this process is available now. 

VAR (volt-amperes reactive) support will be very valuable for mid-size turbines located on weak 

distribution systems. Power electronics systems should be developed and made available as soon 

as possible. 

Federal support in the form of technical assistance, information dissemination, and university 

research programs will be very important to establishing a trained workforce to operate, 

maintain, and design “small-scale” community wind projects. The wind industry is unlikely to 

create “wind smith” training programs at community colleges or wind-engineering programs at 

universities tailored toward mid-size wind turbines without federal or state support. 

The economics of community wind projects rely on credible wind data, turbine-performance 

data, and energy projections. It is essential that tools be available for establishing and confirming 

mid-size turbine performance projections in a timely manner. 

Expected Turbine Size to Meet “Small-Scale” Community Wind Market 

The optimal turbine size for the “small-scale” community wind market ranges significantly 

depending on ownership, availability of land, ability to contribute significant amounts of 

renewable energy to the grid, ability to acquire financing, ease of operations and maintenance, 

state incentives, and ease of interconnection. The range most frequently cited in the January 2006 

survey conducted for this study was 100 kW-1 MW because of the intersection of many of the 

previously mentioned factors. If cost-competitive turbines in this range are made available, many 

“small-scale” community wind projects may opt to install one or multiple machines of a smaller 

size than the multi-megawatt-class machines advanced by the major turbine manufacturers. They 

would do this because of the simpler design and lower capital requirements of the smaller 

machines, making maintenance and financing easier. High thresholds on net-metering rules in 

85 
several states16 allow for matching turbine size to the load at the site for medium-size loads, such 

as schools, businesses, and many manufacturing facilities. Respondents also indicated that 

machines in this range are of appropriate sizes to match loads of hospitals, public schools, and 

small industry and have a similar return on investment as the multi-megawatt machines with a 

smaller investment threshold. 

Currently, only a few commercial models are available in this size range, including the Suzlon 

950 kW; the Fuhrlander FL 100, FL 250, FL 600, and FL 1000; the EMS 65 kW; and the 

Entegrity 50 kW. However, production numbers are limited, and manufacturers are challenged to 

keep up with the market growth rate for this size range, making it difficult for “small-scale” 

community wind developers to obtain equipment. 

Required Cost of Energy to Compete in “Small-Scale” Community Wind Market 

The primary alternatives to “small-scale” community wind are large-scale community wind and 

commercial wind projects. Based on current incentives that are driving community wind 

development in Minnesota (currently $0.01/kWh REPI) and Iowa ($0.015/kWh Personal 

Renewable Energy PTC), the necessary cost of energy for most community wind projects to be 

competitive is, therefore, roughly within $0.015 of commercial wind farms [17], which is 

currently around $0.05/kWh. 

The survey of industry participants conducted for this study indicated a range of $0.03-0.15/kWh 

in the retail cost of energy for wind systems to compete in the community-scale distributed 

generation market, with most responses between $0.05 and $0.08/kWh. 

Seasonality and Geographic Nature of Wind Resource 

Community wind projects are generally connected to the grid and, therefore, typically have no 

need for storage; however, wind regime characteristics are both seasonal and geographic in 

nature. Many locations suitable for “small-scale” community wind experience more wind in 

winter months but have higher electricity loads in summer months. The more closely the wind 

resource matches local load (peak coincidence), the more valuable the wind resource and 

economic benefit of the project. Annualized net metering can also aid “small-scale” community 

wind market. 

Interconnection processes and access to the grid vary considerably on a geographic basis. Windy 

rural areas have low population densities and weaker girds than more populated regions, making 

costs high and availability low for interconnection points. More in-depth analysis of these issues 

will allow for greater understanding of how best to utilize existing resources and more efficiently 

design upgrades and additions to distribution systems to facilitate more distributed wind 

generation in rural areas. 

Impact of Intermittency 

Intermittency is a significant issue for “small-scale” community wind applications. Schools and 

large businesses purchase electric power under utility tariffs that typically have both demand and 

16 In Iowa and Virginia, the size limit for net-metered wind energy facilities is 500 kW, and in California net metering is 

allowed up to 1000 kW in name plate capacity (DSIRE). 

86 
energy charges. If the community wind turbine is used to offset power purchases for a school or 

large business, then the intermittent power output may not be able to reduce the demand charge 

significantly in the electric power bill. Because up to two-thirds of the electric bill can be for the 

demand charge, the power bill savings from the wind turbine would be much less because of the 

intermittency. If the school or business could switch tariffs to one that only has energy charges, 

then the power bill savings would be at a rate about equal to the retail rate. 

One way to mitigate the loss of value caused by intermittency is to install equipment that stores 

either electrical or thermal energy. The added cost of electrical storage equipment, such as a 

battery and inverter, is typically only justified for smaller off-grid applications where the price of 

utility power is high. However, using wind generation to reduce natural gas or fuel oil usage for 

heating is potentially cost effective in some cases, especially if heat can be stored in the form of 

hot water. The cost effectiveness derives from the fact that a larger wind turbine can be justified 

as a result of the increased need for electricity for heating. This type of project also requires a 

control system to determine when and how much of the wind generation output is converted into 

heat for storage rather than simply used to offset electric usage. Using a wind turbine with a 

thermal heat storage unit has the potential to greatly reduce natural gas or fuel oil usage for 

heating. One barrier to this concept is the restriction that the Federal PTC only applies to power 

sold to a third party, rather than to power used locally for offsetting electrical usage or saving 

natural gas. 

If the entire output of a community wind turbine is simply sold on a wholesale basis to the local 

utility, electricity storage is not likely to be cost-effective because the added cost of the electrical 

storage equipment is usually much higher than the cost of incorporating the variable output with 

the utility’s other generation resources. Even if the local wind generation penetration is very 

high, such as in Denmark, electrical storage would probably only be cost effective on a large 

scale at a central facility, such as with pumped hydro or compressed-air energy storage. 

Interface for “Small-Scale” Community Wind 

Typical interfaces for “small-scale” community wind installations are dedicated three-phase 

transformers connecting to distribution feeders (typically 13.8 kV or lower) for projects 

consisting of one or a few mid-size turbines, in comparison to dedicated three-phase substations 

connected to the transmission system (69 kV and higher) for multiple large-turbine projects. 

Appropriate fuses, breakers, relays, and other switch gear are needed for large-scale applications 

to ensure power system safety under abnormal operating conditions. Standardization for 

appropriate integration studies and required interconnection equipment for single or small 

aggregations of large turbines (in the 0.5-20 MW installed capacity range) has happened in many 

states in response to increased levels of distributed generation resources on systems. Larger 

projects will still require an extensive engineering study to determine the appropriate equipment 

necessary to safely interconnect. 

Most community wind applications sell power to the grid, although many “small-scale” 

installations offset at least a portion of the power coming in. Specific applications typically have 

power electronics available to condition the power generated because power from wind turbines 

above about 30 kW is three-phase, 60 Hz, and around 600V. The only interface technology 

needed is a transformer to step up or down the voltage. Further research in the area of reactive 

power compensation, voltage support, and flicker mitigation will add value to distributed wind 

87 
generation for interconnecting utilities and can help minimize or eliminate the need for 

distribution feeder upgrades. 

VI. Recommended Areas of Technical Concentration 

The U.S. “small-scale” community wind market and U.S. participation in the international 

“small-scale” community wind market have major growth potential but are currently facing 

major market and technical constraints that could be addressed with focused support. In 

particular, turbine production numbers are limited, and manufacturers are not keeping up with 

the rate of market growth for this size range, making it difficult for “small-scale” community 

wind developers to obtain equipment. Reliability and maintainability are becoming more of an 

issue for community wind projects as challenges with heavy crane access, a lack of trained 

technicians, and parts shortages are leading to delays in installation and increased turbine 

downtime. 

The Future 

A new generation of mid-size turbines designed for low-wind regimes will obviously require 

application of many technologies and a substantial investment. This process could begin 

immediately and take advantage of new technologies or design methods that become available 

during the design. Use of innovative tower concepts for new or refurbished systems is likely to 

require substantial design analysis to ensure that dynamic interaction problems will not be 

induced by the new towers. 

Based on market and technical issues discussed above, the following high-priority areas are 

recommended for future investment with more detailed studies. 

Grid interconnection and integration. Interconnection processes could be greatly simplified by 

more sophisticated remote-monitored controllers that meet a certified national standard. Such 

controllers can allow the turbine to support weak rural distribution systems while taming voltage 

excursions and flicker and supplying reactive power support to the system, as well as monitoring 

system health and logging important system events. 

Distributed-generation grid-integration studies completed to date are just a starting point. More 

in-depth analysis is needed on what it will take to transition the utility grid system from the oneway distribution of energy that it was originally designed for into an efficient multi-direction 

system that not only distributes electrons but also acts as an aggregator for electricity produced 

in rural areas. The national grid is woefully inadequate to function this way today. What is 

required to develop an infrastructure that would more easily integrate distributed wind 

technology? 

Turbine and tower options. Innovative tall towers, especially for refurbished machines, would 

boost energy capture while diminishing turbulence. Easing the installation complexity while 

increasing the reliability and service intervals of future mid-size wind turbines, along with 

simplifying the troubleshooting and maintenance regimen, could make the community wind 

machine just another agricultural implement. 

Installation and maintenance. NREL’s expert assistance in the development of technical 

training programs for mid-size turbine “windsmiths” can help increase the availability of 

installation and maintenance crews for smaller community-owned projects. 

Performance projections. Easy-to-use computer tools for analyzing “small-scale” community 

wind project economics would assist with seeking project financing, negotiating power purchase 

88 
agreements, and taking advantage of incentives. User-friendly wind resource modeling with onsite measurement correlations could make annual power prediction much easier. 

Zoning and permitting. Development of a set of regional model zoning ordinances for mid-size 

wind turbines with consideration given to proper setbacks for sound levels and tower fall zones, 

attention to avian migration patterns and wildlife areas, visual impacts on the landscape, with 

different conditions based on land use and the size of projects could help to streamline the 

permitting process for community wind projects. National participation combined with education 

of local zoning agencies can aid in the adoption of responsible and appropriate siting 

requirements of community wind projects. 

89 
Table 5-3. Summary Information Table: “Small-Scale” Community Wind Power 

Domestic Market Potential for “Small-Scale” Community Wind 

(cumulative installed capacity) 

2005 110 MW 150 Units 

2010 160 – 380 MW 220 – 500 Units 

2015 240 – 1,300 MW 320 – 1,700 Units 

2020 350 – 4,500 MW 470 – 6,000 Units 

Regions (States) of Specific Interest 

1. Midwest (Minnesota, Iowa, Nebraska, Texas, North Dakota, South Dakota, Illinois) 

2. Northeast and Mid-Atlantic (including Massachusetts, New York, Vermont) 

3. West (Colorado, Montana, California, Oregon, Washington, Alaska) 

International “Small-Scale” Community Wind Market 

(cumulative installed capacity) 

2005 8.1 GW 11,000 Units 

2010 13-22 GW 17,000-29,000 Units 

2015 21-59 GW 28,000-79,000 Units 

2020 34-160 GW 45,000-210,000 Units 

Regions of Specific Interest 

1. Europe (Germany, Spain, Denmark, Norway, Netherlands) 

2. Asia (China, India, Russia) 

3. South America/Central America 

4. Africa 

5. Canada 

Key Market Barriers 

1. Turbine availability 

2. Economics 

3. Interconnection 

4. Permitting/Siting 

Key Technical Barriers 

1. Grid interconnection and integration 

2. Turbine and tower options 

3. Installation and maintenance 

4. Performance projections 

Expected Turbine Size Range 

1 MW or less for “small-scale” community wind applications 

Expected Turbine Coupling 

Voltage: 540 V to 660 V AC 

Typically connecting to distribution level voltages of 13.8 kV or less 

90 
VII. Conclusions 

The market for “small-scale” community wind projects is substantial and growing, attracting 

increasing attention from policy makers, community groups, and economic development 

professionals. With an estimated 150 turbines currently installed nationally in “small-scale” 

community wind applications (utilizing turbines 1 MW or less) totaling 110 MW, and an 

estimated 11,000 turbines installed worldwide totaling 8.1 GW, forecasts based on recent growth 

rates of the entire wind industry indicate the potential for a substantial market in this sector. 

Based on lower- and upper-bound growth estimates, this sector is expected to grow to an 

estimated 470-6,000 “small-scale” community wind turbines totaling 350 to 4,500 MW in the 

United States and 45,000 to 210,000 turbines totaling 34 to 160 GW internationally. 

However, major barriers still exist for community groups seeking to invest in wind energy. 

Notably, these issues include the boom/bust cycle created by the federal PTC, causing limited 

availability of field-tested, economical turbines; components; construction crews; operations and 

maintenance professionals; and experts in business, finance, and legal matters. 

Significant attention must be paid to the design and delivery of new mid-size turbine models in 

the 100- to 1,000-kW range, sized for moderate loads such as schools, businesses, and 

government buildings and optimized for Class 3 wind regimes with the capability to provide 

reactive power and voltage support to weak distribution feeders. Addition of such capability will 

add value to distributed wind energy for utilities, giving it the ability to lessen or mitigate the 

need for feeder upgrades and reduce transmission congestion. 

New tower technologies, such as self-erecting designs, have the potential to decrease the upfront 

costs of construction, as well as reduce or eliminate the scarcity of cranes. 

The development of and support for education programs for technicians skilled in routine and 

special maintenance of mid-size wind turbines will aid greatly in providing support for current 

and future “small-scale” community wind projects, as well as help to create a new job sector. 

Extension of the PTC for periods of 5 to 10 years, rather than the past 2- to 3-year extension 

periods, could develop a more stable market for wind energy. A more stable overall wind 

industry will allow many of the critical market barriers to be addressed by smaller businesses 

that can develop expertise in all areas of “small-scale” community wind energy development. 

Steady wind industry growth can also help increase equipment availability; business and 

financial planning; and crews for construction, operation, and maintenance. 

The United States market for “small-scale” community wind and the major international markets 

for “small-scale” community wind, offer substantial growth and export opportunities for future 

mid-size turbine suppliers, and project developers. Favorable policies, economic conditions, and 

the sufficient availability of competitively priced mid-size turbines will help ensure that this 

sector continues to grow and enable the DWT industry to become one of the leading renewable 

energy distributed generation industries. 

VIII. Acknowledgements 

The authors thank the following individuals from the following organizations who provided 

important perspectives in the DWT survey conducted for this study: Abundant Renewable 

Energy; Aerofire Windpower; Aeromax; Alternative Energy Institute; Appalachian State 

University; AWS Truewind LLC; Baca Green Energy, LLC; Bergey Windpower Co.; California 

Energy Commission; Chinook Wind; Conergy Inc.; DC Power Systems; Detronics Ltd; Earth 

Turbines, Inc.; EMS, LLC; Energy Options; Enertech, Inc.; ETM Solar Works; Halus Power 

91 
Systems; hullwind.org; Interstate Renewable Energy Council; Intertribal Council On Utility 

Policy; Kidwind; Lawrence Berkeley National Laboratory; Lorax Energy Systems, LLC; Maine 

State Energy Program; Minnesota Department of Commerce; National Conference of State 

Legislatures; Northern Arizona University; Northern Power Systems; NYSERDA; PPM Energy; 

Responsive Load Limited; Shuttleworth & Ingersoll; SMA America; Solar Coaching; Southwest 

Windpower, Inc.; Suntec Energy Supply; Sustainable Automation LLC; Sustainable Energy 

Developments, Inc.; The Stella Group, Ltd.; The Wind Turbine Company; Ventera Energy Inc; 

and Vermont Department of Public Service. We would also like to thank John Vanden Bosche 

with Chinook Wind for serving as a reviewer. 

IX. References 

1.	 2005 Federal Energy Policy Act, www.elpc.org/CREBs/CREB_NRECAguide.pdf. 

2.	 Mark Bolinger, Lawrence Berkeley National Laboratory, “A Survey of State Support for 

Community Wind Power Development,” 2004; Stephen Grover, ECONorthwest, 

“Estimating the Local Economic Benefits of Community Wind Projects: A Guidebook for 

Washington State,” May 2005. 

3. Brian Antonich, Windustry, Direct communication with ECONorthwest, 02/08/2006. 

4.	 Mark Bolinger, Lawrence Berkeley National Lab, A Comparative Analysis of Community 

Wind Power Development Options in Oregon, 2004. Prepared for the Energy Trust of 

Oregon. 

5.	 Mark Bolinger, Lawrence Berkeley National Laboratory. “A Survey of State Support for 

Community Wind Power Development,” 2004. 

6.	 U.S. Department of Energy, Energy Information Administration, Energy Outlook 2006 

(Early Release), Table 16. Renewable Energy Generating Capacity and Generation. 

www.eia.doe.gov/oiaf/aeo/excel/aeotab_16.xls 

7.	 U.S. Government Accountability Office, Renewable Energy, “Wind Power’s Contribution 

to Electric Generation and Impact on Farms and Rural Communities,” 2004. 

8.	 American Wind Energy Association, “U.S. Wind Industry Ends Most Productive Year,” 

1/24/2006. 

www.awea.org/news/US_Wind_Industry_Ends_Most_Productive_Year_012406.html 

9.	 Mark Bolinger, Lawrence Berkeley National Lab, A Comparative Analysis of Community 

Wind Power Development Options in Oregon, 2004. Prepared for the Energy Trust of 

Oregon. 

10. American Wind Energy Association, “U.S. Wind Industry Ends Most Productive Year,” 

1/24/2006. 

www.awea.org/news/US_Wind_Industry_Ends_Most_Productive_Year_012406.html 

11. European Wind Energy Association, News Release, 2006. 

12. European Wind Energy Association. News Release, 2006. 

13. Database of State Incentives for Renewable Energy. www.dsireusa.org. January 2006. 

92 
14. Mark Bolinger, Lawrence Berkeley National Lab, A Comparative Analysis of Community
 

Wind Power Development Options in Oregon, 2004. Prepared for the Energy Trust of 

Oregon. 

15. EWEA, European Wind Energy Association: European Capacity map 

2005.www.ewea.org/fileadmin/ewea_documents/documents/publications/statistics/2005stati 

stics.pdf . 

16. Paul Gipe. Wind-Works.org. www.wind-works.org/index.html 

17. Lisa Daniels, Windustry. Phone Interview with ECONorthwest, 1/24/2006. 

X. Bibliography 

American Wind Energy Association. The U.S. Small Wind Turbine Industry Roadmap. 

Washington, DC. 2002. www.awea.org/smallwind/documents/31958.pdf. 

American Wind Energy Association. Home and Farm Energy Systems: Reaching the Next Level. 

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American Wind Energy Association. U.S. Wind Industry Ends Most Productive Year, Sustained 

Growth Expected For At Least Next Two Years. 01/24/2006. 

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Antonich, Brian. Direct communication. Windustry.org. 02/08/2006. 

Bolinger, Mark. A Comparative Analysis of Community Wind Power Development Options in 

Oregon. Energy Trust of Oregon. 2004. 

Bolinger, Mark. A Survey of State Support for Community Wind Power Development. 

Lawrence Berkeley National Laboratory. 2004. 

Database of State Incentives for Renewable energy (DSIRE) Web site. www.dsireusa.org. 

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Edwards, Jennifer. Evaluating State Markets for Residential Wind Systems: Results From an 

Economic and Policy Analysis Tool. Ernest Orlando Lawrence Berkeley National Laboratory.
 

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European Wind Energy Association (EWEA). News Release. Brussels, 2006. 

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Gipe, Paul. Wind-Works.org. www.wind-works.org/index.html. 

Global Wind Energy Council Wind Force 12: A Blueprint to Achieve 12% of the World’s 

Electricity From Wind Power By 2020. 2005. 

Grover, Stephen. ECONorthwest. “Estimating the Local Economic Benefits of Community Wind 

Projects: A Guidebook for Washington State,” May 2005. 

International Energy Agency. Global Renewable Energy Policies and Measures Database. 

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Marbek Resource Consultants Limited. Survey of Small (300 W to 300 KW) Wind Turbine 

Market in Canada. Contract No.: NRCan-03-0652. Prepared for the Wind Energy R&D Program 

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of the CANMET Energy Technology Centre-Ottawa (CETC), Energy Technology and Programs 

Sector, Department of Natural Resources, Government of Canada, Ottawa, Ontario, 2005. 

Navigant Consulting, Clean Power Research. PV Grid Connected Market Potential under a Cost 

Breakthrough Scenario. September 2004. Prepared for The Energy Foundation. 

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Power. www.nreca.org/nreca/Policy/Regulatory/WhitePaper/WhitePaper.pdf. 

Solar Energy Industry Association (SEIA). Our Solar Power Future: U.S. Photovoltaics Industry 

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in Canada. 2005. 

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U.S. Government Accountability Office (GAO). Renewable Energy: Wind Power’s Contribution 

to Electric Generation and Impact on Farms and Rural Communities. 2004. 

94 
XI. Appendix A 

Table 5-4. Community-Owned Wind Projects Utilizing Turbines from 100 kW to 1,000 kW 

Location State Name Owner Size # of turbines Manufacturer Model Date of commission

Royal IA Clay-Everly Central School District Clay-Everly Central School District 95 1 Windmatic 17s-95 1986 

Belcourt ND Belcourt Turtle Mt. Chippewa 100 1 NEG Micon 100 kW 1997 Fort Totten ND Fort Totten Spirit Lake Sioux 100 1 NEG Micon 100 kW 1997 

Boston MA IBEW Local 103 IBEW Local 103 100 1 Fuhrlaender 100 kW 2005 

Marshalltown IA Consumers Energy Consumers Energy 108 1 Micon 108 2004 

Miner County SD City of Canova City of Canova 108 1 NEG Micon 108 3/1/2002 

Miner County SD City of Carthage City of Carthage 108 1 NEG Micon 108 5/1/2003 

Richardton ND Richardton Richardton Abbey 125 1 Silver Eagle 125 kW 1997 

Laker MI Laker Elementary School Laker Elementary school 195 3 Nordtank 65 kW 2005 

Richardton ND Sacred Heart Monastery Sacred Heart Monastery 200 2 

Miner County SD City of Howard City of Howard 216 2 NEG Micon 108 10/1/2001 

Boise ID Bob Lewandowski Bob Lewandowski 216 2 NEG Micon 108 kW 2003 

Adair IA Schafer Systems, Inc. 225 1 Vestas 225 kW 1994 

Lac qui Parle MN Lac qui Parle High School Lac qui Parle High School 225 1 NEG Micon 225 kW 12/4/1997 

Riverton UT Camp Williams, Utah National Guard Camp Williams, Utah National Guard 225 1 NEG Micon 225 kW 2000 

Near Rochester NY Lorax Energy Harbeck Plastics 250 1 Fuhrlaender 250 kW 2002 

Joice IA Windway Technologies Northwood-Kensett School 250 1 Nordex 250 2005 

Nevada IA Story County Medical Center Story County Medical Center 250 1 Nordex 250 kW 

Princeton MA Princeton Muni Light Princeton Muni Light 320 1 Enertech 320 kW 1984 

Nevada IA Nevada High School Nevada Highschool 450 2 WinWorld 200 & 250 kW 1998 

Akron IA Akron-Westfield School District Akron-Westfield School District 600 1 Vestas 1999 

Forest City IA Forest City School District Forest City School District 600 1 NEG Micon 600 kW 1999 Hull MA Town of Hull Town of Hull 660 1 Vestas V-47 2001 

Near Valley NE Omaha Public Power District Omaha Public Power District 660 1 Vestas V-47 2001 

Wall Lake IA City of Wall Lake Wall Lake Municipal Utilities 660 1 Vestas 660 kW 2003 

Stuart IA Stuart Municipal Utilities Stuart Municipal Utilities 660 1 Vestas 660 kW 2005 

American Windmill 

Museum TX American Wind Power Center American Wind Power Center 660 1 Vestas V-47 2005 

Riverton UT Camp Williams, Utah National Guard Camp Williams, Utah National Guard 660 1 Vestas 660 kW 2005 Clay County MN Moorhead Public Service #1 750 1 NEG Micon 750 kW 1999 

Clay County MN Moorhead Public Service #2 750 1 NEG Micon 750 kW 8/23/2001 

95 
Location State Name Owner Size # of turbines Manufacturer Model Date of commission

Eldora IA Eldora-New Providence Community School District Eldora-New Providence Community School District 750 1 NEG Micon 2002 

Lenox IA Lenox Municipal Utilities Lenox Municipal Utilties 750 1 NEG Micon 750 kW 2003 

Rosebud Sioux Reservation SD Rosebud Sioux Rosebud Sioux Tribe 750 1 NEG Micon 750 2003 

Pipestone MN Pipestone School Pipestone School 750 1 NEG Micon 750 kW 2004 Waverly IA Waverly Light and Power Waverly Light and Power 900 1 NEG Micon NM 900/52 2001 

East of Petersburg ND East of Petersburg Minnkota Power Cooperative 900 1 900 kW 2002 

Valley City, Oriska ND Valley City, Oriska Hills Minnkota Power Cooperative 900 1 NEG Micon 900 kW 2002 

Lincoln County MN Hendricks Wind I LLC Thomas Daggett 900 1 NEG Micon 900 kW 5/15/2002 Lincoln County MN Borderline Wind LLC Jay Gislason 900 1 NEG Micon 900 kW 12/31/2003 

Nobles County MN Sieve Windfarm Don & Janet Sieve 950 1 NEG Micon 950 kW 12/2002 Spirit Lake IA Sprit Lake Community School District Spirt Lake Community School District 1,000 2 NEG Micon 250 & 750 kW 1992 & 200

Sibley IA George Braaksma, et al George Braaksma, et al 1,200 2 NEG Micon 600 kW 1996 

Lincoln NE Lincoln Energy System Lincoln Energy System 1,320 2 Vestas V-47 1999 Lincoln NE Lincoln Electric System Lincoln Electric System 1,320 2 Vestas V-47 1999 

F.E. Warren Air Force Base WY F.E. Warren Air Force Base F.E. Warren Air Force Base 1,320 2 Vestas 660 kW 2005 

Spring View NE Nebraska Public Power District Nebraska Public Power District 1,500 2 Enron Z-46 1998 

Springview NE Nebraska Public Power District Nebraska Public Power District 1,500 2 Enron Z-46 1998 

Alta IA Waverly Light and Power Waverly Light and Power 1,500 2 Zond Z-50 1999 

Murray County MN Ed Olsen Wind LLC Olsen Farms 1,500 2 NEG Micon 750 kW 12/1/2001 Pipestone County MN Kas Brothers Wind LLC Richard and Robert Kas 1,500 2 NEG Micon 750 kW 12/2/2001 

Dodge County MN BT LLC 2002 Brandon McNeilus 1,800 2 NEG Micon 900 kW 2002 

Dodge County MN Burmese Children Support Burmese Children Support 1,800 2 NEG Micon 900 kW 2002 

Dodge County MN GarMar Foundation 2002 GarMar Foundation 1,800 2 NEG Micon 900 kW 2002 

Dodge County MN GM LLC 2002 Garwin McNeilus 1,800 2 NEG Micon 900 kW 2002 

Dodge County MN McNeilus Windfarm (2002) Grant McNeilus 1,800 2 NEG Micon 900 kW 2002 

Dodge County MN SG, LLC Silvester Stoeckel 1,800 2 NEG Micon 900 kW 2002 

Nobles County MN Wisconsin Public Power WMMPA and WPP 1,800 2 NEG Micon 900 kW 2002 

Nobles County MN Western Minnesota Municipal Power Local Goverment Joint Powers 1,800 2 NEG Micon 900 kW 1/11/2002 

Rock County MN Minwind I Cooperative of Farmers 1,900 2 NEG Micon 950 kW 10/2002 

Rock County MN Minwind II Cooperative of Farmers 1,900 2 NEG Micon 950 kW 10/2002 

96 
Location State Name Owner Size # of turbines Manufacturer Model Date of commission

Dodge County MN Ashland Windfarm Garwin McNeilus 1,900 2 NEG Micon 950 kW 2003 Dodge County MN Asian Children Support Asian Children Support, Inc. 1,900 2 NEG Micon 950 kW 2003 

Dodge County MN Bangladesh Children Support Bangladesh Children Support, Inc. 1,900 2 NEG Micon 950 kW 2003 

Dodge County MN BT LLC 2003 Brandon McNeilus 1,900 2 NEG Micon 950 kW 2003 

Dodge County MN GarMar Foundation 2003 GarMar Foundation 1,900 2 NEG Micon 950 kW 2003 

Dodge County MN GM LLC 2003 Garwin McNeilus 1,900 2 NEG Micon 950 kW 2003 Dodge County MN Grant Windfarm Grant McNeilus 1,900 2 NEG Micon 950 kW 2003 

Dodge County MN Indian Children Support Indian Children Support, Inc 1,900 2 NEG Micon 950 kW 2003 

Dodge County MN McNeilus Windfarm (2003) Grant McNeilus 1,900 2 NEG Micon 950 kW 2003 

Dodge County MN Salvadoran Children Support Salvadoran Children Support, Inc. 1,900 2 NEG Micon 950 kW 2003 

Dodge County MN Zumbro Windfarm Brandon McNeilus 1,900 2 NEG Micon 950 kW 2003 Martin County MN SMMPA SMMPA 1,900 2 NEG Micon 950 kW 2003 

Pipestone County MN Bisson Windfarm LLC Peter & Maurine Bisson 1,900 2 NEG Micon 950 kW 10/1/2003 Pipestone County MN Boeve Windfarm LLC Gary & Gail Boeve 1,900 2 NEG Micon 950 kW 10/1/2003 

Pipestone County MN Windcurrent Farms Steve & Jane Tiedeman 1,900 2 NEG Micon 950 kW 10/1/2003 

Pipestone County MN CG Windfarm LLC Corey Juhl 1,900 2 NEG Micon 950 kW 10/1/2003 

Pipestone County MN Fey Windfarm LLC Douglas & Pamula Fey 1,900 2 NEG Micon 950 kW 10/1/2003 Pipestone County MN K-Brink Wind Farm LLC Aleanor Kruisselbrink 1,900 2 NEG Micon 950 kW 10/1/2003 

Pipestone County MN TG Windfarm LLC Tyler Juhl 1,900 2 NEG Micon 950 kW 10/1/2003 

Pipestone County MN Tofteland Windfarm LLC Dean & Jennifer Tofteland 1,900 2 NEG Micon 950 kW 10/1/2003 

Pipestone County MN Westridge Windfarm LLC Dan & Mary Juhl 1,900 2 NEG Micon 950 kW 10/1/2003 

Nobles County MN Western Minnesota Muni Power Agency 1,900 2 NEG Micon 950 kW 12/15/2003 

Chandler Hills MN Great River Energy Great River Energy 1,980 3 Vestas 660 kW 1998 

Lincoln County MN Autumn Hills LLC Northern Alternative Energy 1,980 2 990 kW 2/1/2001 

Algona IA Iowa District Wind Energy Project Cedar Falls, Algona, Ellsworth, Estherville, Fonda, Montezuma, Westfield Municipal Utilities 2,250 3 Zond 750 1998 

Dodge County MN McNeilous, Garwind Garwin McNeilous 3,000 2 Vestas 1500 kW 2004 

Chandler MN Chandler Hills Phase II Great River Energy 3,960 6 Vestas V-47 2001 

97 
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4. TITLE AND SUBTITLE

Distributed Wind Market Applications 

5c. PROGRAM ELEMENT NUMBER

5d. PROJECT NUMBER

NREL/TP-500-39851 

5e. TASK NUMBER

WER6.7502 

6. AUTHOR(S)

T. Forsyth and I. Baring-Gould 

5f. WORK UNIT NUMBER

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES)

National Renewable Energy Laboratory 

1617 Cole Blvd. 

Golden, CO 80401-3393 

8. PERFORMING ORGANIZATION 

REPORT NUMBER

NREL/TP-500-39851 

10. SPONSOR/MONITOR'S ACRONYM(S)

NREL 

9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES)

11. SPONSORING/MONITORING 

AGENCY REPORT NUMBER

12. DISTRIBUTION AVAILABILITY STATEMENT

National Technical Information Service 

U.S. Department of Commerce 

5285 Port Royal Road 

Springfield, VA 22161 

13. SUPPLEMENTARY NOTES

14. ABSTRACT (Maximum 200 Words)

Distributed wind energy systems provide clean, renewable power for on-site use and help relieve pressure on the 

power grid while providing jobs and contributing to energy security for homes, farms, schools, factories, private and 

public facilities, distribution utilities, and remote locations. America pioneered small wind technology in the 1920s, 

and it is the only renewable energy industry segment that the United States still dominates in technology, 

manufacturing, and world market share. 

The series of analyses covered by this report were conducted to assess some of the most likely ways that advanced 

wind turbines could be utilized apart from large, central station power systems. Each chapter represents a final report 

on specific market segments written by leading experts in this field. As such, this document does not speak with one 

voice but rather a compendium of different perspectives, which are documented from a variety of people in the U.S. 

distributed wind field. 

15. SUBJECT TERMS

wind energy; distributed wind; wind turbine; small wind; small wind turbine; wind market 

16. SECURITY CLASSIFICATION OF: 19a. NAME OF RESPONSIBLE PERSON 

a. REPORT 

Unclassified 

b. ABSTRACT 

Unclassified

c. THIS PAGE 

Unclassified

17. LIMITATION 

OF ABSTRACT

UL 

18. NUMBER 

OF PAGES 

19b. TELEPHONE NUMBER (Include area code)

Standard Form 298 (Rev. 8/98) 

Prescribed by ANSI Std. Z39.18