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MI-based Meijers throwing money into the wind?By Theblogprof, Section News
cross-posted at theblogprof
I saw this story over at the Grand Rapids Press via MLive today: Meijer looks to Cascade Engineering for wind to power offices, stores. An excerpt: Wind power might be coming to Meijer Inc.'s corporate offices and two of its Lakeshore stores. The Walker-based retailer plans to install six Swift WindTurbines, manufactured by Cascade Engineering Inc., atop its corporate offices at 2929 Walker Ave. NW.Sounds all well and good until you read some details:
Including installation, the device costs between $10,000 and $12,000, Ford said. In a location with ample wind, one can generate up to 2,000 kilowatt hours of electricity -- about 20 percent of an average house's annual usage. The 8-foot rotor's life expectancy is 20 years. With energy costs increasing an average of 5 percent annually, some homeowners may expect to reap $200 per year in savings, Ford said.I went over to the Swift website, which listed a bunch of dealers. I hit the first link to Bauer power and looked at expenses. Sure enough, there was this: Head and tower starting around $10,000 and going up depending on tower, type, height, and power output of system. Many small systems installed are in the $11,000-25,000 range, while slightly larger machines are installed in the $25,000-55,000 range.So the numbers in the article look OK. In addition, 200 kW-hr at a bit over 9 cents per kW-hr (my last electric bill from DTE) is just under $200 in savings. Here's the thing, though: if you do the math, the payback period is 55 years! Apparently, the author of the article didn't have a simple calculator that would show this to be a bad investment based on the fact that the turbine is rated to last 20 years (that part was clear). Worst yet, that's assuming the $10,000 investment remains static over the 55 years. As a matter of fact, should one choose to put it in a cd (certificates of deposit, not music cds) instead of a wind turbine, the numbers look even worse. Assuming a long-term cd at 3% yearly interest rate compounded monthly would yield $57,158.96. So the payback period is even longer. Even if you factor in electricity rate increases, it's not a pretty picture. So either Meijers is literally just throwing money into the wind for a publicity start, or something here is amiss. I'm betting on the former.
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MI-based Meijers throwing money into the wind? | 2 comments (2 topical, 0 hidden)
MI-based Meijers throwing money into the wind? | 2 comments (2 topical, 0 hidden)
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