25% or Higher, Return on Investment, with Tax incentives, in Wind

Consider this. Finding steady and safe investments has been hard in 2009.

1. Stocks declined 20% in one week in October of 2008. Since then the Dow has dropped by 40%. Banks are not lending much, in spite of taxpayer "bail outs" to the big banks and the USA has the highest unemployment rate since the 1940's.

2. Banks failures are happening throughout the world at an alarming pace.

3. Real estate markets have crashed with real estate prices dropping by 30% in 12 months.

QUESTION: Where can you put your money where it will give a good return and be safe?

CONSIDER: Under what economic or political situation can you imagine, wherein the wind will not continue to blow in the same general patterns that it has for the past 4,000 years? Would you say the chances of wind blowing in Texas, Kansas, Oklahoma, Montana, Chicago and around the Great Plains would be pretty high? Would you consider that the assurance that wind will blow, is more certain, than promises by hedge fund managers on Wall Street?

CONSIDER: Banks are paying 2% to 4% on CD's, but the industry is troubled, braced up by FDIC.

Let us investigate how a prudent investment in a Wind Turbine, (or turbines) can provide high cash returns, increased property values, lower taxes, and good safe investment characteristics.

Method of calculation #1. Cost of 5 kw Unit: $29,900 ($30,000). Deduct 30% ($10,000) as Investment Tax Credit in your first year. There is a production credit that was originally capped at $4,000 but we are advised that this has no cap and is 2.1 cents per kWh of production every year.

But for hypothetical reasons, assume that you deduct $4,000 as Production credit in your first year. If you are a business, you can also deduct 50% (accellerated depreciation) $15,000 in your first year. So, total cost of turbine= $30,000. Total deductions 1st year=$29,000 Now the turbine will also produce electricity (depending upon your winds), let's estimate a conservative electric production of $4,800 per year.

Plus you will get carbon credits in addition to this as a bonus under the cap and trade system.Summary: Turbine cost: $30,000. Total Deductions or incentives in 1st year: $24,200 to $29,000. Power production (depending upon winds): $4,800 per year. Plus additional income from "carbon clean energy credits". (Check with your CPA, on your specific qualification, as the production credit is allocated with an offset over time, from the production credit).

Method of calculation #2. Cost of 20 kw Unit: $67,000. Deduct 30% ($20,100) as Investment Tax Credit or as a "grant refund"in your first year. If you are a business, you can also deduct 20% depreciation expenseper year for 5 years (or about $13,000 per year).

So, total cost of 20 kwh turbine: $67,000, less $20,100, less a depreciation deduction of$13,000 and you can see your net cost in the equipment goes down significantly. Plus during that time, you are generating electricity for your propertyand reducing, if not in some cases, eliminating your electric bill. Total Deductions or incentives in 1st year: $33,100. Not bad! Get a $67,000 piece of equipment and be able to tax deduct or get grants for $33,100 in the first 12 months.

PLUS YOU CAN CONTINUE TO GET DEPRECIATION FOR A TOTAL OF 5 TO 7 YEARS, SO THAT TAX SAVINGS WILL ALMOST PAY FOR YOUR UNIT. 

Power production (depending upon winds): $6,000 to $21,000 per year. Plus additional income from "carbon clean energy credits". (Check with your CPA for qualifications of your specific situation. Production credits have an offset over time with the ITC), treatment will be variable in accordance with your situation.

We will use as an example, a small "home" sized unit (although larger units are more efficient and profitable). Most homes in Texas use about $300 to $600 per month in electricity. But if rates continue to rise 3% to 8% a year, these homeowners will someday see their utility bills at $700, $1000 or $2000 per month. A 5, 10 or 20 kWh turbine may pay most or all of the electric bills for a home, depending upon the size of the home and how much energyuse you have.