From Root River Energy's Spring 2010 Newsletter....
In the last article, we discussed how both activities of farming your land and the wind can co-exist harmoniously on your property. However, does it make economic “cents” for you to harvest both even if the physical characteristics work out just fine? Well, the answer is yes. Barry and/or Jim have probably filled you in on the increased economic potential a community wind project has over a non- community-owned development. The economics are increased because landowners can share in the project’s revenues beyond receiving the traditional turbine lease payment.
However, if we just take a look at even the lease payment and what that adds in ‘dollars and cents’ to your farming income, the numbers are significant. First, lets take a look at what the typical returns might look like for today’s Minnesota crop farmer. According to the 2008 Riverland Community College Farm Business Management Annual Report for Southeast Minnesota, the average return per acre of corn from 1999-2008 was $60.13. A total of 500 acres of corn at $60.13 profit per acre, equals $30,065 a year. This amount is the farmer's estimated return after considering all labor, management, commodity, and weather-related expenses. What would happen if today’s Minnesota crop farmer had 5 turbines on his 500 acres? First off, the five turbines would only occupy 5 acres, leaving 495 acres for agricultural/farming purposes.
This same farmer would make $29,764 for his 495 acres of crops, based upon a 10 year average profit of $60.13 per acre. However, with 5 turbines on his property, a farmer can easily double his yearly income. Assuming a hypothetical payment scenario that would provide $7,000 per turbine annually (please see either Jim or Barry for Root River Energy project specific payment terms), 5 turbines would add $35,000 to a landowner’s yearly profits. Please keep in mind that these numbers are used only as an example and do not reflect Root River Energy’s exact payment structure.
National Wind’s community model provides additional local revenue because landowners have the opportunity to take an ownership stake in a project. This allows project participants to share in the profits the wind farm generates.
Also, the risks involved with farming your land, in regards to weather conditions and fluctuating prices, do not transfer over when it comes to harvesting the wind. Turbine lease payments remain steady and constant despite what the economy is doing and can help balance your farm income when challenging times arise.
Also, we provide an on-site operation and maintenance crew to care for your turbine so you don’t have to! You can just sit back and relax!
Ultimately, participating in Root River Energy makes economic “cents” in today’s financial climate. Therefore, if you’ve been a little unsure about whether participating in our project is right for you, hopefully this put some needed perspective on the issue!
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