Projecting rental income from the lease of agricultural property for the installation of windmills is not intuitive for the average person. Even the people in the business of installing windmills ask their technicians to make the calculation for them. I have provided a user friendly tool that calculates what rent can be expected, given various assumptions such as the size of the wind farm, how many windmills, wind speed, etc. Below are the things you will need to know to make the calculation. Make a few assumptions. I recommend that you make a few calculation and consider an expected return and a worst case scenario when you make your decision.
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. 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. After knowing how many turbines are needed, it must be geographically possible to fit them on the site with Online Electricity calculator respect to zoning and engineering parameters.
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.
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 wind farm on the site.
Most contractors will avoid getting into the actual calculations with landholders. I have set up a special webpage to make the calculations for you. Compare results here with what a contractor proposes.