[Editor’s note: This story is part of a six-article series about small wind. Click here, here, here, here and here to read the rest.]

 

When homeowners want to go green, they tend to think ofsolarpower, not wind. After all, wind power is associated with the large turbines – growing larger every year – blamed for bird deaths and cluttering up the view.

But a group of companies wants consumers to think of small-wind power as at least as viable as solar power. They say small-wind power is cheaper than solar power, particularly in places with more wind than sun.

And there’s evidence small-wind manufacturers are picking up speed. Ottawa-based Magenn Power is testing its first prototype, Quiet Revolution has opened its first factory, Reno, Nev.-based Mariah Power expects to deliver its first turbine this month and Flagstaff, Ariz.-based Southwest Windpower projects it will turn a profit in the fourth quarter.

“The market is definitely heating up,” said Miriam Robbins, marketing manager at Southwest Windpower. “We have been seeing a lot more startups. For us, this is exciting because it just shows the industry is growing and helps give us legitimacy, to have plenty of competition.”

Funding is another sign that small wind is growing.

Mariah this month said it had closed $500,000 in financing from Greenhouse Capital Partners and Big Sky Partners. In March, Quiet Revolution announced it had snagged £1.2 million ($2.3 million) from Finance Wales, the Welsh Assembly Government and HSBC. Marquiss Wind Power raised $1.3 million in its first round of funding, led by Velocity Venture Capital, in January. And Magenn closed $5 million from Quercus Trust in October.

Let’s look at the numbers.

The American Wind Energy Association defines small wind as 100 kilowatts or less, while others limit the term to 50 or even 30 kilowatts. That compares to regular wind turbines that often have capacities of 1 megawatt (that’s 1,000 kilowatts) or more. The largest turbine today can produce more than a whopping 7 megawatts.

According to the association, the global small-wind market totaled $117.2 million in sales and 37 megawatts of new capacity installed in 2006, the latest year tracked. And that’s only about 0.3 percent of a total of 5.2 gigawatts of U.S. wind-energy installations for the same year.

But the numbers represent a nearly fivefold growth in capacity -- and a more than sevenfold growth in sales -- from 2004, according to the association, which releases small-wind studies every two years. In 2004, the group tracked 7.5 megawatts of new capacity sold globally for a total of $15.8 million, with approximately two-thirds of the installations in the United States. And if 2005 forecasts of 14 megawatts of capacity and $25 million in sales were correct, most of the pickup was in 2006.

In spite of the growth, however, it’s clear that small wind is still, well, small.

Compare the 2006 small-wind figures with solar-cell and panel production of 2.6 gigawatts, or about $19 billion, in the same year, according to Photon Consulting managing director Michael Rogol, then an analyst with CLSA-Asia Pacific Markets. Even in places like Germany, which is not exactly known for its sunshine, solar is far more common than wind power for residential installations.

According to the wind association, one big barrier is the lack of a tax credit for small wind. Unlike their larger cousins, or their sunny brethren, small-wind installations have to make do without these subsidies for now.

“State and federal policy remain the pivotal factor for sustaining and growing the market for small wind-electric systems in the United States and abroad,” wrote Ron Stimmel, a small-wind advocate for AWEA who authored the association’s report. “[Unlike solar power,] small wind has had no federal-level incentives since 1985 and is the only mainstream renewable-energy technology without one.”

Because more than 80 percent of all grid-connected small-wind systems of 10 kilowatts and less are paired with solar power in a hybrid system, it’s clear the two technologies share very similar markets, Stimmel wrote, citing the tax credit as a “critical factor” of the differences in the two technologies’ growth.

A lack of federal incentives also plays into the high upfront cost of installing small-wind, which the 2007 survey found was the largest market barrier, and extends the time it takes for customers to see a return on their investment. According to AWEA, customers want to recoup costs in five years or less, while many systems take longer.

But Robbins said the company hadn’t found the lack of incentives to be as much of a problem as zoning and permitting difficulties, which are the second-ranked problem in the AWEA study. “That’s really the challenge,” she said.

She said small wind is simply 10 years behind solar, in terms of market and technology development. “Solar got simpler earlier, and there are more manufacturers out there,” she said. “It’s great because it helped pave the way and people understand renewable energy. Now we’re really starting to get in there.”

Among the other challenges enumerated in the study include concerns about visual impact or community opposition, low public awareness, a lack of net metering, which allows residents and utilities to track electricity both taken off and delivered on to the grid, and a lack of certification for turbines and installers.

In this package, we’ve taken a look at four small-wind companies that are making progress – and that believe they can beat the odds.

  • A Balloon in the Wind (Market)
  • It’s a blimp, it’s a balloon, it’s a…wind turbine? With an eye on a $12 million second round, Magenn Power hopes to prove its airship-based technology is more than just neat pictures on a Web site.
  • By Tyler Hamilton
  • They Call the Small-Wind Firm Mariah
  • Nevada-based Mariah Power has developed a propeller-free turbine that turns wind -- which sets the clouds a-flyin’ -- into energy.
  • By Rachel Barron
  • Riding the Wave of Renewable Regulation
  • Quiet Revolution has pilot installations, a newly opened factory, a sold-out order book and $2.3 million. It claims its turbines generate 20 to 40 percent more energy for their size, compared to conventional turbines. But will all that -- and regulatory support -- be enough to make a market?
  • By Valerie Thompson
  • Catching a Second Wind
  • With a 21-year history, Southwest Windpower has been around the block. But after some unexpected permitting and zoning setbacks, the company says sales are growing “exponentially” and it plans to turn a profit in the fourth quarter.
  • By Jennifer Kho
  • Small-Wind Investment Gains Strength
  • Investments grow to $30 million so far this year, up from $28.2 in the full 2007. The number of deals also has grown from four last year to seven in just the first few months of 2008.
  • By Valerie Thompson and Jennifer Kho