Economic Analysis Tools

Projecting costs and benefits of new installations, including the economic development impacts, is a key element in evaluating potential wind developments. WINDExchange provides software applications and publications to help individuals, developers, local governments, and utilities make decisions about wind power.

Communities, states, regions, job markets (e.g., construction, operations, and maintenance), the tax base, tax revenues, and others can be positively affected. These benefits are in addition to the impacts for the owner or developer. The following analysis tools can aid interested parties in understanding wind project economics.

Jobs and Economic Development Impact Model

The Jobs and Economic Development Impact (JEDI) model is a user-friendly tool that estimates economic impacts from power projects. Models for wind power include distributed wind, utility-scale wind, and offshore wind. Based on user-entered project-specific data or default inputs (derived from industry norms), JEDI estimates the number of jobs and economic impacts to a local area that can reasonably be supported by a power plant or fuel production facility. For example, JEDI estimates the number of in-state construction jobs from a new wind farm. Jobs, earnings, and output are distributed across three categories:

  • Project Development and Onsite Labor Impacts: the people working on site (e.g., technicians)
  • Local Revenue and Supply Chain Impacts: the parts, equipment, and labor for the value chain (e.g., blade manufacturers, steel workers, accountants)
  • Induced Impacts: impacts from spending in the local economy due to the project.

JEDI model default input values are based on interviews with industry experts and project developers. Economic multipliers contained within the model are derived from Minnesota IMPLAN Group’s IMPLAN accounting software and state data files.

System Advisor Model

The System Advisor Model (SAM) is a performance and financial model designed to facilitate decision-making for people involved in the renewable energy industry, from project managers and engineers to incentive program designers, technology developers, and researchers. SAM makes performance predictions for wind and other renewable energies, including grid-connected solar PV, concentrating solar power, biomass, and geothermal systems.

Its cash flow models are appropriate for distributed energy projects that buy and sell electricity at retail rates and for power generation projects that sell power at a price negotiated through a power purchase agreement. The model calculates the cost of generating electricity based on information provided about a project’s location, installation and operating costs, type of financing, applicable tax credits and incentives, and system specifications.

Outputs from SAM include:

  • Levelized cost of energy
  • Power purchase price, internal rate of return, and other financial targets for utility-scale projects
  • Payback period and net present value for residential and commercial projects
  • Hourly, monthly, and annual average predictions of system performance, including net electric output and component efficiencies
  • Annual cash flow table with cost details
  • Customizable graphs.

Small Wind Economic Model

The Small Wind Economic Model is a spreadsheet tool that allows users to estimate the performance and economics of potential distributed wind turbine projects, with a focus on certified residential turbines. The model allows for economic analysis of leasing.

Cost of Renewable Energy Spreadsheet Tool

The Cost of Renewable Energy Spreadsheet Tool is an economic cash flow model designed to allow policymakers, regulators, and the renewable energy community to assess project economics, design cost-based incentives (e.g., feed-in tariffs), and evaluate the impact of various state and federal support structures.