Wind turbine prices in the USA are falling, reaching 2005 levels, pushed down by new, domestic turbine manufacturing capacity that has created a buyer's market. Capital costs for turbines are in the range of $1,700 to $1,800 per kilowatt.
The recent downward price move reverses turbine pricing that doubled from 2003 to 2008, moving from $1,200 to $2,500 per kilowatt. During that time, wind companies from Europe and Asia rushed to the USA to open factories here. They came then to avoid currency risk as the dollar fell and the Euro rose in those years, to cut transportation costs, and to position themselves in the large emerging American wind power market.
America now has 40,000 megawatts of wind installed, with 10,000 megawatts built in 2009 and 5,000 in 2010. The new wind capacity has more than met the requirements of some state renewable energy portfolio requirements for this point in time.
The wind boom means the price of Mid-Atlantic renewable energy credits is near zero, proving wrong one more time the ideological opponents of wind and renewable standards that confidently projected enormous consumer costs. Substantial new wind power has caused also lower wholesale electricity market prices that save consumers billions of dollars across America.
Today's turbines both have declined in price and have higher energy yields--featuring 100 meter towers as opposed to 65 meter towers that were common in 2003, bigger rotor diameters, and other improvements.
The combination of better machines and lower prices means that wind farms can be built in Pennsylvania for a 20-year power purchase agreement at 5.5 cents per kilowatt-hour. As recently as 2008 and into 2009, PPAs of 7.5 to 8.0 cents were necessary to finance most wind farms in the Commonwealth.
Pricing at 5.5 cents for energy for the long-term is a competitive product, even given today's incredibly low gas prices. Some companies may even be willing to merchant finance some wind projects at these prices. Wind power is at least a prudent hedge and a sensible part of what should be a diverse energy portfolio.