Wind energy has transitioned from a novel concept to a mainstream renewable energy source. Large, efficient wind farms are increasingly common. However, the high initial cost of wind turbines, driven by technology, construction, and operating expenses, remains a significant factor.
Calculating the precise cost of a wind turbine is complex. Current estimates suggest offshore turbines cost around $1.5 million per megawatt (MW) of power produced. A 10 MW wind turbine could therefore cost approximately $15,000,000. However, many variables affect the actual final price.
This article breaks down the costs associated with wind turbines, explores their long-term profitability, and assesses whether the initial investment is worthwhile.
Wind turbine cost factors include initial investment, maintenance, and electricity production potential.
The Evolving Landscape of Wind Energy
The Biden Administration’s policies have spurred offshore wind farm development in the United States over the past two decades. While a potential shift in administrations once cast doubts on the economics of wind energy, the renewable energy market is now resilient against political changes. The global transition to renewable energy is well underway, ensuring the US remains a key player. The mix of onshore and offshore wind energy projects will significantly impact the market and the upfront cost of wind turbines.
Comparing costs across different turbine models is challenging. Offshore wind projects are more difficult to price than onshore projects. The costs of turbines designed for onshore wind farms also vary depending on location-specific conditions.
Therefore, determining an “average” cost for a wind turbine in 2025 requires complex calculations considering multiple factors. Let’s explore some of these “solutions.”
Notably, in 2024, there were indications that manufacturers might streamline their model offerings to improve profitability and engineering reliability. To understand how wind turbine costs are determined, a brief overview of the wind energy market is essential.
Are Wind Energy Costs Decreasing?
Wind turbine manufacturers like Siemens have voiced concerns about wind energy prices becoming too low to sustain market development and growth. Rising costs and government pricing structures pose ongoing challenges.
In 2022, Nordex increased turbine prices by roughly 12% due to rising costs and interest rates, a trend followed by other manufacturers. Prices stabilized somewhat in 2023. Nordex, based in Germany, reported an average selling price of €890,000/MW (approximately $965,000/MW USD) mid-year. [1]
Siemens’ Tim Dawidowsky emphasized in May 2023 that “it’s all about cash,” advocating for increased revenue for European turbine makers. Wind energy costs, including components, are influenced by various global factors more than most industrial products.
Energy costs are particularly challenging to define. Differing energy financing methods across countries create an uneven playing field. While some European countries directly control energy developments, and the US has a history of incentives and subsidies, determining true costs, profits, and losses is difficult, and comparing energy costs internationally is almost impossible. Even “simple” costs like blades and nacelles are affected by political policies and future price expectations.
The Biden administration’s Inflation Reduction Act (IRA) allocated billions to green energy incentives from 2021-2024, with ongoing effects.
Global Profitability of Wind Projects
Philip Totaro, founder of IntelStor, discussed the most profitable wind projects in the May 7, 2024, edition of Recharge News.
What is the Initial Cost of a Wind Turbine?
Commercial wind turbines cost millions of dollars per turbine. This substantial investment is intended to be recovered over a long period.
These turbines generate significant electricity, selling it back to local power utilities for distribution to homes and businesses.
Wind turbine maintenance is a crucial cost factor that impacts long-term profitability.
Cost Variations Around the World
Energy projects are developed and subsidized differently worldwide, from Australia to Brazil to Canada to the UK, largely due to varying governmental structures. Many complex issues make determining wind turbine costs more difficult than a typical accounting problem.
Countries “adjust” the cost of materials, labor, and land by artificially reducing wages or adding tariffs and taxes. In the US, initiatives like the Jones Act can increase initial wind turbine manufacturing costs but should ultimately increase the country’s wind energy market value. The Jones Act significantly impacts offshore wind turbine costs since 2022.
Wind Turbine Maintenance Costs
Maintenance is an ongoing expense after construction.
- 1-2 cents per kilowatt-hour produced
- $42,000 – $48,000 per year
Operation and maintenance costs are significant, but these machines are long-term investments expected to pay for themselves over time.
A wind turbine study based on German data shows that these costs average 1-2 Eurocents per kilowatt-hour (kWh) produced. This number increases as the turbine ages due to wear and tear.
Impact of Operation & Maintenance on Wind Turbine Cost
Operation & maintenance (O&M) includes:
- Insurance
- Land costs, rent, and taxes
- Service, repair, and spare parts
- Administrative tasks
- Power (for operation)
- Miscellaneous
These recurring costs are generally less significant than the electricity generated.
Repairs can significantly reduce capacity, and lightning strikes can be problematic. While turbine blades have lightning protection systems, they are often inadequate. Additional protection is especially crucial for offshore wind turbines where repair logistics are expensive and time-consuming. Products like segmented lightning diverters can provide extra protection from lightning strike damage.
Electricity Production of a Wind Turbine
Now, let’s address electricity generation.
Wind turbines are rated in megawatts (MW), indicating their electricity-generating capacity.
One megawatt = 1,000,000 watts of power. One megawatt can power approximately 1000 homes for a month. However, wind turbines rarely reach their rated capacity due to fluctuating wind speeds.
Size and Capacity
Larger wind turbines cost more but produce more electricity with larger nacelles and blades.
Offshore wind turbines typically have larger capacities due to more consistent wind speeds.
Statistica reports that onshore wind turbine rotor diameters have increased to 129 meters (423 feet).
Common commercial wind turbine sizes:
- 1.5 MW (onshore)
- 2.5 MW (onshore)
- 4 MW (onshore)
- 6-8 MW (offshore)
- Up to 18 MW (The largest offshore wind turbines were updated to 18 MW)
Offshore wind farms use larger turbines due to high installation and electricity transport costs, along with the increased efficiency from consistent, faster wind speeds. Fewer, larger turbines simplify construction, reduce the number of towers and anchoring systems, and decrease complexity.
Wind Speed and Capacity Factor
Turbines produce at full capacity at full wind speed. A 2.5 MW turbine will generate 2.5 MW of power at peak wind speed. However, wind is variable.
Due to changes in wind speed and direction, overall averages are lower, typically 30-40% for onshore turbines and up to 65% (or higher in rare cases) for offshore turbines.
The Largest Wind Turbine: GE Haliade-X
The GE Haliade-X is an impressive turbine.
This turbine was the first to offer 12 MW capacity, with 107m (351 feet) long blades and a 260m (853 feet) overall height. The Haliade-X offshore turbine has a power rating range of 12-14.7MW. The cost? $12M – $20 Million.
Turbines of this size are usually used offshore, where wind speeds are higher and power delivery is more complex. Fewer, bigger turbines simplify power transport with fewer long-distance cables and a simpler system.
Revenue from Electricity Generation
Wind turbines have a maximum rated capacity (e.g., 4 megawatts) but generate electricity at a “capacity factor” that is a percentage of this maximum.
The sale price of electricity generated by wind turbines has been decreasing as turbine technology improves.
This electricity sale is how wind turbines become profitable and create renewable energy.
The long-term profitability of wind turbines depends on factors like capacity factor, electricity prices, and operational costs.
The goal is for turbines to produce at a higher capacity factor, generating more electricity. Many wind farms are heavily subsidized, but those in the US and North America often operate more like businesses.
Many US wind farms compensate private landowners and contribute to local communities through direct investment, job creation, and tax payments.
Conclusion
Determining the cost of a wind turbine involves considering multiple factors, including turbine size, location, maintenance, and energy production capacity. While the initial investment is significant, wind turbines can provide long-term financial returns through electricity generation, contributing to a more sustainable energy future. As technology advances and renewable energy policies evolve, wind energy will likely become an increasingly cost-effective and essential component of the global energy mix.
References
[1] (New citation, May 2024 update) https://www.windpowermonthly.com/article/1829900/nordex-sells-16gw-wind-turbines-pricing-holds-steady-q2#
