How much do wind turbines cost and where can I get funding?

Capital costs and payback periods

The cost of a wind energy project will vary depending on the scale, site and installation requirements. Some typical figures for the installed cost for different scales of wind turbine are provided in the following table. Capital cost figures are approximate and include installation costs due to civil works. Planning and feasibility study costs are not included as these vary considerably.

These figures are taken from 'Power in numbers', by Element Energy for the Energy Saving Trust (2009).

Turbine size Capital cost per turbine Feed-in-Tariff generation rate (current, £/kWh) Simple payback period
Building-mounted micro (2.5kW) £10,000 £0.27 May not payback within lifetime
Micro (6kW) £20 - £28,000 £0.27 May not payback within lifetime
Small (20 - 50kW) £50,000 - £125,000 £0.24 8 - 15 years
Medium (100kW - 850kW) £250,000 to £1.8 million £0.09 - £0.19 7 - 9 years
Large (1MW - 2.5MW) £2 million - £3.3 million £0.05 - £0.09

less than 1 year - 5 years



According to RenewableUK, the average cost of generating electricity from large scale onshore wind is now around three to four pence per kilowatt hour, competitive with new coal (2.5 - 4.5 pence) and cheaper than new nuclear (4 - 7 pence).

As gas prices increase and wind turbine costs fall further as the market grows, wind energy is also likely to become competitive with gas fired power generation. These costs take into account the amount which needs to be invested in installing the wind turbines.

Funding schemes

Projects with a total capacity of over 5MW will not be able to claim the Feed-in Tariffs. Instead larger wind projects will qualify for one Renewables Obligation Certificate (ROC) for every MWh of electricity they generate.

ROCs are administered by Ofgem. Monthly generation output data must be submitted to Ofgem within a two month window of generation and ROCs will usually be issued within a month of submission. ROCs can be sold, and have had a market value of around £45 per ROC since their introduction in 2002. This means that the financial incentive for larger wind energy projects is similar with ROCs or the Feed-in Tariffs.

If as a local authority you invest in wind energy and claim either Feed-in Tariffs or ROCs, it is important to note that you will not be able to count the emissions savings from the wind energy against your Carbon Reduction Commitment (CRC).

Under the current introductory phase CRC allowances cost £12 per tonne CO2 emitted. Someone with a turbine of up to 5MW would receive a payment of at least £96 from the Feed-in Tariffs for generating enough electricity to save a tonne of CO2. A turbine owner of capacity greater than or equal to 5MW could sell the ROCs from generating the same amount of electricity for around £87. Claiming the Feed-in Tariffs or ROCs would therefore make more financial sense than saving money on the CRC allowances.

For a full list of the funding, grants, incentives and loans available for wind energy projects please see the document below.

Grants, loans and financial incentives for sustainable energy projects (PDF, 3 pages, 177KB)

 

Links to further information

Checklist for installing a small wind turbine – on the RenewableUK website (formerly the British Wind Energy Association)

Community Energy Online website

Delivering community benefits from wind energy development: a toolkit' (PDF, 52 pages, 540KB) – on the Centre for Sustainable Energy website

Microgeneration certification scheme website

Planning renewables website

NOABL wind speed database – on the RenewableUK website

Wind power in the UK (2005) – on the Sustainable Development Commission website

Natural England website 

Countryside Council for Wales website

14 April 2015

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