In August of 2014, DOE released a report summarizing the current state of the distributed wind market in the U.S. The 2013 Distributed Wind Market Report’s purpose is to help plan and guide future investments and decisions by industry, utilities, state and federal agencies, and other interested parties. Funded by the U.S. Department of Energy, and written by Alice Orrell, of the Pacific Northwest National Laboratory, and Heather Rhoads-Weaver, of eFormative Options, with significant contributions by Larry Flowers, Matt Gagne, Boyd Pro, and Nik Foster.
The authors believe that distributed wind is poised to play a growing role in the rapidly expanding distributed generation market, which is expected to contribute an increasing amount of the incremental generation capacity growth in the coming years, according to industry analysts. They assert that the rise in distributed generation is leading to a fundamental shift in the utility business model, with some utilities responding to the disruptive challenge as an unwanted threat.
The major points in the report are summarized below. To read the full report, click here.
- In 2013, 30.4 megawatts (MW) of new distributed wind capacity was added, representing nearly 2,700 units across 36 states, Puerto Rico, and the U.S. Virgin Islands.
- To compensate for weaker domestic sales, U.S. small wind turbine manufacturers shifted their focus to growing international markets. Exports from U.S.-based small wind turbine manufacturers increased 70% from 8 MW in 2012 to 13.6 MW in 2013.
- Residential applications accounted for 40% of U.S. distributed wind deployed in 2013, followed by agricultural 26%, industrial and commercial 20%, and government and institutional 14% on a per project basis.
- U.S. suppliers continued to dominate the domestic market for small wind, claiming 93% of 2013 domestic small wind sales on a unit basis.
- Reported 2013 U.S. distributed wind deployments of all sizes encompassed 69 different wind turbine models ranging from 100 watts to 2 MW from 38 suppliers with a U.S. sales presence.
Nevada, Iowa, Minnesota, Oklahoma, New York, Texas, and Hawaii led the nation for 2013 small wind sales. Of the 30.4 MW of distributed wind capacity deployed in 2013, nearly 82% (24.8 MW) is from nine projects using turbines greater than 100 kW, for a total of 18 units in Colorado, Kansas, Ohio, Massachusetts, Alaska, Indiana, North Dakota, and Puerto Rico.
A total of $15.4 million in federal, state and utility incentives were awarded to distributed wind projects in 2013, but significant imbalances between solar and distributed wind incentive funding levels exist in several states.
The capacity-weighted average installed cost of newly manufactured 2013 small wind turbines sold in the United States was $6,940/kW.
Installed cost and wind turbine energy production (i.e., capacity factor) drive a wind project’s levelized cost of energy (LCOE). In general, the higher the capacity factor, the lower the LCOE.
The U.S. distributed wind energy supply chain is comprised of hundreds of manufacturing facilities and vendors spread across at least 34 states.
Installed distributed wind capacity is expected to be higher in 2014.
From an industry perspective, distributed wind stakeholders generally agreed that 2013 was a difficult year for the domestic market and that exports “saved the day” for many small wind turbine manufacturers.
Certification bodies continue to provide wind turbine buyers with reliable third-party verification of important safety, acoustic and performance data, and provide wind turbine sellers the capacity to demonstrate compliance with regulatory and incentive program requirements.
Building on the success of third-party financing options for solar photovoltaics, several leading distributed wind industry members are now offering long-term leases.