Crosswinds

Beth Butters, office manager for Burco Farms, near Independence, Iowa, still remembers the day about five years ago when she opened the farm's monthly electric bill following a particularly wet harvest. Grain dryers had been running hard 24/7 for a month. She nearly went into shock when she saw a $15,000 electric bill. She took it to her boss, farm owner Darin Burco, and said, "We have to do something about this."

Burco and Butters decided to look into wind-generated power. They experienced fits and starts as they moved toward an operational system. But they are happy with the result.

"Normally, in a year, our electric costs run between $40,000 and $50,000," she says. "Now, we spend $8,000 to $9,000 a year."

That smaller power bill comes by way of a 100-kilowatt (kW) wind turbine provided by Northern Power Systems, based in Barre, Vt.

"It was supposed to be a [100-kW meter]," Butters adds, "but it ended up logging 180 the first 11 months." That means the turbine was generating nearly twice the amount of electricity Butters and Burco expected.

POWER TO THE FARM

That's a big deal to this 7,000-acre corn and soybean operation, where grain dryers run nonstop in harvest season. With the dryers, the system also powers five shops and a grain bin, and the farm's agricultural equipment refurbishment and resale business.

"When we're not drying corn, the wind provides 100% of the power," Butters says. When Burco Farms produces more power than it uses, East-Central Iowa Rural Electric Cooperative gives it a credit that can be applied to future bills. Beyond this initial agreement, the electric cooperative will purchase excess power from Burco Farms for 3.8 cents per kilowatt hour (kWh).

It sounds like a win-win situation, particularly when you consider that Butters expects the farm's wind system to pay for itself by next year, four years after it was installed. But even Butters, happy as she is with the savings the farm is experiencing, advises producers to do their homework. Potential buyers should understand the equipment, terminology, claims, offers of grants, tax credits and generated income. Be sure to ask for customer contacts.

COST OF OPERATION

Don't ignore maintenance. Expect to pay $3,500 a year for a maintenance contract on a 100-kW system.

The Burco Farms wind system had a retail cost of about $500,000. Burco paid only about half of that thanks to a USDA Rural Energy for America Program (REAP) grant and a cash payment they took instead of a 30% federal tax credit. That credit is no longer offered, however.

"You are taking a chance when you apply for a REAP grant," Butters cautions. There is no guarantee you'll get one, although you must already be committed to purchasing a wind system -- that includes an assurance of financing -- to even qualify to apply for a REAP grant. In the end, Burco Farms did secure a $137,500 grant.

Not all producers are so fortunate. An Ohio grain farmer, who declined to be named, did not get the grants he expected or the amount of wind power from his 100-kW system the installing company claimed he could get. He did receive the 30% federal tax credit, but it wasn't enough, he says, to justify the cost of the system. "The system is hardly paying the interest on my loan," he says, noting that it may take 20 years for the turbine to pay for itself -- essentially the service life of the wind generator.

WIND ESTIMATES

The unnamed company showed the Ohio farmer wind maps that projected he would get 270,000 kWhs a year in power. So far, the turbine has clocked about 120,000 kWhs annually.

"I can't say anything like this would pay out unless you're going to apply for grants," he says, "and you are sure you're going to get them."

So, how do you know if wind is a viable option for powering your farm and creating energy and cost savings? James Jennings, director of global marketing for Northern Power Systems, says one critical factor is the electric rates you're paying. If your electric rates aren't at least 6 cents per kWh, you're not going to get much of a payback by installing a wind turbine. A second consideration is wind. Unless the wind speed at your location is at least 12.3 mph on average, a wind turbine is not likely a viable economic option without major tax credits and incentives. If your wind speeds are extremely high, wind generators aren't a good idea, either. The turbines can't take the fatigue and vibration load of excessive wind speeds for long periods.

"Our turbines shut down for safety reasons at 56 mph," Jennings says, "and our designs are made to carry up to 19 mph winds consistently."

Jennings advises farmers to never buy used turbines. Burco Farms had ill luck with a company selling remanufactured turbines.

KNOW THE NEIGHBORHOOD

It's important to be aware of local zoning laws. Consider, too, the attitude of your neighbors toward the presence of wind turbines in the neighborhood.

"Permitting can be a challenge in some places," Jennings admits, although he adds most turbines for agricultural uses are not terribly tall. Northern's are 161 feet to the tip of the blade. The towers are 121 feet.

For Burco Farms, wind power has been a major energy saver. But their experience is not necessarily the norm, even in the same Iowa neighborhood.

The Ohio farmer says wind supplies only 30% of his electrical needs. It is far less than he anticipated. "Make sure," he cautions other producers, "you know what the potential [wind speeds] are before you invest."

REAP THE WIND

Here are three places offering detailed information on green power incentives:

-- Database of State Incentives for Renewables and Efficiency: www.dsireusa.org

-- Federal tax credits: www.energystar.gov (Click on "Tax Credits for Energy Efficiency.")

-- USDA Rural Energy for America Program: www.rurdev.usda.gov (Click on "Energy.") REAP offers assistance with installing solar panels, wind systems or anaerobic digesters; makes energy efficiency improvements, such as installing irrigation pumps or replacing ventilation systems; and conducts energy audits and feasibility studies.

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WHAT ABOUT SOLAR?

Maybe wind doesn't suit your operation, but you live in a high-cost electric area and want to better control that dollar outlay. Solar power might provide an answer, particularly given decreases in the cost of solar power systems.

"Producers are looking at extremely high electric costs," says Dylan Dupree, vice president of business development at SPG Solar, "particularly in California." He's seen rates as high as 15 to 20 cents per kilowatt hour.

"With the financing that's available today, customers can finance 100% of the cost of a solar energy project." Dupree says producers can replace their utility bill with a loan payment and benefit from 20 to 30 years of low-cost electricity after paying off a seven-year loan.

Steve Maddox, owner of Maddox Dairy, in California's San Joaquin Valley, recently purchased an SPG Solar 1-megawatt system with the intention of offsetting 90 to 95% of the dairy's electrical costs. The dairy milks 3,400 cows out of a 10,300-head herd on 9,000 acres. Maddox says the system cost $3 million, but he expects a payback within five to six years and an annual cost savings of $150,000.

"It should produce the majority of my power needs during the average year," he says.

DO THE RESEARCH

As with wind power, producers in solar power must do their research. Dupree points out solar pays for itself so quickly in large part because of tax benefits and incentives, so it's important to know what incentives are available in addition to the 30% federal tax credit. Many states offer incentives, and some electric companies offer rebates.

Space is an important consideration for a solar system. The Maddox Dairy project required about 4 acres. The solar panels are mounted in rows. A drivetrain powered by a half-horsepower motor maneuvers them on a single axis from east to west to follow the sun throughout the day.

POWER SOURCE

The panels produce DC electricity that an inverter converts to AC. The Maddox system also hooks into the local electrical grid so the farm can get from their electric company credit for any excess power the farm produces.

Solar is not the right solution for everyone, Dupree cautions. "It's dependent on the cost of your electricity," he explains. "It's also site dependent. Do you have land or rooftops available for the panels?"

"Our decision was simple," says Maddox, considering "the reduced cost of the project due to competitive equipment prices, efficient project design and available tax credits."

(BAS)

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