Assuming a capacity factor of 33% (substantially higher than the current 27%), the EIA estimates the levelized cost of new wind power in 2017 at $96 per MWh, with a range of $77 to $112 per MWh. While this is about 50% more expensive than power from natural gas plants, it is about the cheapest cost for renewable energy sources (30). Recall that the levelized cost of PV solar is about $153 per MWh. The actual cost will depend greatly on the need for building large trans­mission lines to get the electricity from the good wind locations to the population centers that need it. The cost is nearly all in the construction of the wind farm and the cost of wind turbines, since the ongoing maintenance costs are relatively small and the wind is free. However, wind turbines have a lifetime of only 15 to 20 years, after which a large capital input will again be necessary to replace the turbines and possibly even the towers (38, 48).

Many of the subsidies available for solar energy also apply for wind energy, which are necessary to make the technology competitive. In the past, new wind power capacity has dropped dramatically in years when federal tax credit subsi­dies were not available, and that is also likely to be the case in the future (48). The federal production tax credit (PTC)—a credit of 2.2 cents per kWh—has been available for wind power developers since 1992, but it was scheduled to expire by the end of 2012. Vestas, a major manufacturer of wind turbines that has a plant near Fort Collins, says the market for wind turbines “may fall off a cliff” if the PTC is not renewed (55). In the last-second budget deal early in the morning on New Year’s Day 2013, the PTC was renewed for another year.

According to the Congressional Research Service, renewable energy sources received $6.7 billion in federal subsidies in 2010 through production tax credits and direct grants (56). If the production tax credit had not been extended by Congress, wind power developers expected that there would be virtually no additional wind power developed in 2013 (57). Small household wind turbines can still qualify for a 30% federal tax credit until 2016. The American Recovery and Reinvestment Act of 2009 provided $21 billion for renewable energy generation by wind and solar (58).

The US Department ofEnergy (DOE) published a study in 2008 that proposed a plan for the United States to get 20% of its electricity from wind power by 2030, which they estimated would require 300 GW of wind power (48). However, wind currently provides only 3.6% of our electricity from about 60 GW installed (see Chapter 2). To increase this to 20% of current electricity usage would require 333 GW, but the EIA projects that electricity demand will grow by 0.9% annually, so 395 GW would be necessary by 2030. That is an additional 345 GW of installed capacity. The study expected that 50 GW would come from offshore projects. The EIA estimates that it costs $2.43 million per MW of installed onshore wind capac­ity and $5.97 million per MW for offshore wind capacity (59). Thus, it would cost about $717 billion for onshore wind capacity and an additional $300 billion for off­shore wind capacity to meet this goal. The total cost exceeds $1 trillion, and it still would not replace many gas plants and few, if any, coal plants because of the need for backup power. Furthermore, this analysis does not consider the cost of addi­tional transmission capacity needed, which will add at least $60 billion more (48).

After years of debate, the US Department of the Interior approved the first off­shore wind farm in the United States off the coast of Cape Cod—the Cape Wind project—in 2010 (42). This will not be cheap energy, though. The EIA estimates the levelized cost of offshore wind power to be $244 per MWh, with a range of $187-350 per MWh, making it some of the most expensive energy available (45). While there are ample offshore wind resources, the cost to utilize them will be extremely expensive and will likely be heavily subsidized by taxpayers and will be very expensive for customers. Cape Wind entered an agreement with National Grid to more than double the current rate of 9 cents/kWh to 20.7 cents/kWh in 2013. In addition, the rates would increase by 3.5% for the next 15 years after that, reaching a rate of 34.7 cents per kWh by the end of the contract. The estimated $2 billion to build the wind farm, which is likely an underestimate, will cost taxpay­ers about $600 million that will go to Cape Wind because of available federal tax credits (60). Wind energy is not cheap!