Household Wind Turbine

Fig. 1. Household wind turbine (Proven 6 kW). Photo by
AB Albrechtsen.

A household wind turbine which is smaller than or equal to 6 kilowatts can use net metering in Denmark. The selling price of electricity is thus very good, and the administration is minimal. It is relatively expensive to buy, but its production is high.


Household Wind Turbines

A household wind turbine is a smaller wind turbine (max 25 kilowatt) erected in relation to a detached household, where its primary objective is to deliver energy to the household (Danmarks Vindmølleforening 2011). The total height should be less than 25 metres from the foundation to the wing tip.

The wind turbine is connected to the grid through the electric installation of the household.

The house owner must obtain a permit in order to erect a wind turbine, and the wind turbine must be on the governmental white list. It must be placed near the owner's main buildings, and such that the noise level is less than 45 decibel on the neighbour's property.

Since 2010 all renewable energy installations below 6 kilowatt are allowed to use net metering.

Net Metering

On windy days, when the turbine produces more than the home consumption, the surplus electricity is fed into the public grid. Using net metering the electricity meter 'runs backwards'. When the production is less than the domestic consumption, then the public grid will deliver the remaining power. When the production is larger than the domestic consumption, the public grid will accept the surplus production.

It is more windy during winter time, so the production will be high. The meter is able to measure inflow and outflow, and it will calculate an annual balance. If there is a net outflow to the grid the electricity price will be lower than the buying price. Normally the annual production is less than the consumption, and the production reduces the electricity bill. Thus the price for a kilowatt-hour is the same as the buying price.

Pre-Calculation from Sales Material

Figure 1 shows a 6 kilowatt wind turbine. The tower is 15 metres high. The rotor diameter is not very big and it spins rather fast.

The sales material specifies a nominal production of 11 000 kilowatt-hours (Ecowind) at an average annual wind speed of 5.2 metres per second. The initial investment is 300 000 DKK (40 000 EUR) turn-key.

Fig. 2. Simple project balance. Data from sales
Fig. 3. Simple project balance with less optimistic
electricity prices.

Figure 2 shows the pre-tax simple project balance based on the data form the sales material. The payback period is 10 years and the internal rate of return (IRR) is 10.7%. Notice that the income is tax free as as a consequence of net metering.

The actual production depends on the exact location, the landscape, and the weather. A location on the west coast of Samso is maybe 30% better than inland.

Sensitivity Analysis

The previous calculation assumed that the electricity selling price grows at 7% per year. If we instead assume that it grows with the inflation rate only, then the price is fixed at year 0 level. All prices are year 0 prices in fact.

Furthermore we change the electricity price to 1.81 DKK/kWh (was 2.00 DKK/kWh), which is closer to the current marginal electricity price (disregarding subscription fees) on Samso.

Then we obtain Figure 3. Now the payback period is 17 years (up from 10 years), and the internal rate of return is 2.3% (down from 10.7%).

Clearly the picture depends on the future electricity prices. Even though spot market prices may have increased 7% per year, the consumer price has only increased more or less by the inflation rate the last ten years. Future prices may increase as a result of the new government in 2011, who has announced more tax on energy in order to pay for the future national transition to a renewable energy supply.

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Created by system. Last Modification: Thursday 04 April 2013 22:09:43 CEST by jj.