EVALUATING THE ECONOMICS OF SMALL WIND POWER IN NORTH CAROLINA

Abstract

“Small wind” is defined as wind-powered electric generators with rated capacities of 100 kilowatts (kW) or less. Compared with utility-scale wind systems, small wind enjoys many economic and social advantages including reducing costs of building transmission lines, helping the public reduce peak power demand, diversifying the energy supply portfolio, and increasing regional economic growth. This Master’s Project is designed to evaluate the costs and benefits of small wind systems in North Carolina from the perspective of residents and communities. It establishes a basic Cost Benefit Analysis (CBA) Model to calculate Net Present Value (NPV), Levelized Cost of Energy (LCOE), and Payback Period (PP) of a specific small wind project in Class 3 wind region in North Carolina. The project addresses the impact of a potential carbon tax, a potential state rebate program, and a state tax credit without a cap on the economics of the typical small wind system in North Carolina. The results indicate that a potential carbon tax would not have a significant impact on small wind economics, but the combination of a state rebate program and a non-capped tax credit makes investments in small wind much more attractive. It is recommended that North Carolina adopt a combination of a state rebate program and a non-capped tax credit to stimulate the development of small-scale wind power.