Wind Farm Rent Income Calculator

This article provides a connection and explanation of how to calculate potential income from wind farms. Companies rent land to build windmills and sell the electricity back to the powergrid. Rent is often paid as a percentage of gross income from the sale of the electricity.

Christopher Gates asked:


Go to LocalRental.com on the Windmill Calculator page and enter the total output size of the wind farm, in Megawatts, you wish to build on your property. As a practical matter, this number ends up being less than is projected because of the spacing, commonly referred to as "offsets," required by zoning and or engineering parameters.

Enter the size of the windmills, commonly referred to as wind turbines. The number of turbines needed must match the availability of space on the proposed site. After knowing how many turbines are needed, it must be geographically possible to fit them on the site with respect to zoning and engineering parameters.  

Enter the price that the windmill contractor is expected to receive from the power grid. This is known as the "buyback" price, expressed in cents. You probably pay 5 to 10 cents per Kwh at home. The contractor of the wind farm will get much less, perhaps 3 to 6 cents per Kwh, because the electricity must be delivered to the end user after it is produced at your site.

Estimate a rate of utilization. The utilization rate is not something that a person is going to know intuitively. It is a function of average wind speed, air density, contour of the land relative to prevailing winds, and how well windmills are placed on the property. Air density is a function of temperature and barometric pressure. Mountain tops are known for having lots of wind, but the elevation reduces air density. This rate can only be estimated. It is not actually known until the site is up and running. Above average is 25%. 20% is good. Most of the time windmills stand idle, waiting for the windy season or time of day.

Enter a percent for commission, which serves as rent. Rent is often paid by the contractor to the landlord as percent of gross revenues generated from the sale of energy bought back from the contractor by the power grid company. This percent usually ranges from 3 to 6 percent. This is something that must be negotiated with the contractor arranging to build the windfarm on the site.

This windmill calculator webpage will make the calculations for you. Most contractors will avoid getting into the actual calculations with landholders. Compare results here with what a contractor proposes and you will see that this is how the computations are made.



Posted by Nikhil Gupta

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