How this calculator works
A wind turbine earns revenue from the energy it sells, which is its rated power times the hours in a year times a capacity factor. The capacity factor is the key real-world number: a 100 kW turbine rated at 100 kW would produce 876,000 kWh if the wind blew perfectly all year, but a good site produces 30 to 45 percent of that because the wind rises and falls and the turbine sometimes stops. Operating costs, mainly maintenance, insurance and land lease, are usually estimated as a percentage of the capital cost, around 2 to 4 percent a year for onshore wind. Subtracting them from revenue gives net income, and dividing the capital cost by net income gives a simple payback that ignores financing. The levelised cost of energy divides the total of capital and lifetime operating costs by the total energy produced, which lets you compare projects of different sizes.
Formula
annual energy (kWh) = rated power (kW) x 8,760 x capacity factor. revenue = annual energy x price. operating cost = capital cost x annual O&M share. net income = revenue - operating cost. simple payback = capital cost / net income. levelised cost = (capital cost + operating cost x life) / (annual energy x life). Lifetime net income = net income x life - capital cost.
Worked example
A 100 kW turbine at a 30 percent capacity factor produces 100 x 8,760 x 0.3 = 262,800 kWh a year. At $0.08 per kWh the revenue is $21,024. Operating cost is 3 percent of a $300,000 capital cost, or $9,000. Net income is $12,024, so the simple payback is 300,000 / 12,024 = 25 years. The levelised cost is (300,000 + 9,000 x 20) / (262,800 x 20) = $0.0913 per kWh, above the $0.08 price, so the project loses money over 20 years at this tariff.
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Frequently asked questions
What capacity factor should I use?
Use 25 to 30 percent for a modest site, 30 to 40 for a good onshore site, and 40 to 50 for an excellent one with a high hub height. Offshore projects can exceed 50. The figure depends on the wind resource and the turbine power curve, not on the rating alone.
Why is the simple payback so long?
Small turbines have a high cost per kilowatt and a low capacity factor, and electricity is cheap per kilowatt-hour. Payback depends heavily on the price you receive, so a feed-in tariff or net metering rate can change the picture completely. The levelised cost is a fairer comparison across projects.
Does the calculator include financing?
No. It uses undiscounted cash flow, which makes payback look shorter than a financed project and LCOE look lower than a project with a high cost of capital. A real financial model adds interest, debt service, tax and depreciation.
Are the costs realistic?
The default 300 dollars per kilowatt for a small turbine is in the range for installed small wind, and large onshore projects are far cheaper per kilowatt. Operating cost is set at 3 percent of capital a year; offshore and small turbines are higher. Always replace the defaults with a supplier quote.