Wind Turbine prices have to come down

[Ralph Peters]

New to this forum and need to get this of my chest.....Who would agree that prices for any size wind turbine are being artificially held high by importers and distributors adding sometimes up to 75% of their purchase price from the manufacturer as a profit margin on top?....quicker ROI would most definetly encourage more private investors to consider to add a wind generator to their garden equipment:laugh: I will write a dedicated article on over priced wind turbines on the wind power blog site (http://mywindpowersystem.com)shortly' Look out for it.

Who would agree? I would love to include some quotes and viewa from some of you guys out here.

Ralph

[Rob Beckers]

Hi Ralph,

Welcome at Green Power Talk!
Boy, you like to make a splash coming in, do you?! :blink: Not pulling any punches there! :eek:

As you probably guessed from reading other posts (and as others on this forum are no doubt aware) I make my living selling renewable energy goods. Wind turbines is one of them, my business is the Eoltec distributor for most of North America, they make a 6kW wind turbine named the Scirocco (http://www.solacity.com/Scirocco.htm). So, I'm hitting on several of your hot-buttons there: Importer, distributor, small wind....

What is clear is that you are not making your living selling wind turbines, or you wouldn't write what you did. The reality of small wind is in stark contrast to your statements. I'll tell you what the average profit margin on products is for a distributor: 15%. That's it. For that I have to keep the lights on, the forklift running, pay insurance, and pay myself. I actually make less than that on the Scirocco combo, because I give a discount for buying a wind turbine and inverter together. There is lots of competition in the wholesale business, enough to keep everyone honest, and margins quite low.

Still want to go into the renewable energy business? Retail is a little better, especially if you can buy wholesale and skip the distributor. Margins there are around 20%, or if you combine wholesale and retail, you can do around 30%. As you can see, I wish I had more retail. Then again, it is far, far easier to deal with professionals than it is to deal with consumers or end-users, so it is a trade-off.

How about installing renewable energy? Surely that is good business? Think again! I know many installers personally, being a wholesaler, and I know that many of them are struggling to make ends meet. Most have another line of work, such as being an electrician, or other professional. Making a living with just renewable energy is very, very hard under the current conditions.

As it happens I know a thing or two about the cost of making those Scirocco wind turbines. They use a very, very expensive permanent magnet alternator made by Alxion in France. They are probably the best PM alternators in the world, but boy do they come at a price! Those custom epoxy blades don't come cheap either, not to mention those machined parts made from aluminum billets. In general, manufacturing markups are better than wholesale or retail margins, for most they are probably in the 30 - 50% range. The other side of that coin is that infrastructure for manufacturing and personal cost (engineers are not cheap!) are higher too. I know Eoltec sells a great number of wind turbines, around 200 of them in 2009 in fact, but they are not exactly getting rich from this.

Very few small wind manufacturers are doing really well, in the sense of growing a large business and paying good salaries to lots of people. In fact, I can count them on one hand. Amongst those I know one of them (probably the largest manufacturer in the world of small wind turbines) does so by deliberately cutting lots of corners, and releasing products that they know will fail. That is one way to make money in RE. Many of the Chinese produces are probably doing OK too, while it lasts. Of course, their product are worth exactly as much as you paid for them, and their warranty is as good as your understanding of Chinese.

Truth is that small wind turbines are not made the way cars are produced. They are all small quantity products, heck the brands that do best still only sell a few hundred a year! That means there is little opportunity to get economies of scale. Then, most of the parts are not stock items, but custom produced, or worse still, made in house in small batches (probably the most expensive way to make anything).

So, no, I don't agree with your statement, and I know the numbers. If you have anything to back up what you say I would like to hear it. I bet those big profits are limited to a very select few manufacturers, and absolutely not representative of the industry as a whole.

-RoB-

[Cor van Houtum]

Hello ralph,

Because Rob is not working with Chinese stuff and we are I will tell you the other site of the medallion.

Please start to go into our business I tell you how,

Google a lot and try to find a Chinese producer of wind generator
Easy to find I think,
But are these people the producer or just a office in the bed room ?
Go there and try to lose some money on plains and trains
and do not forget to hire your own translator
do not forget that this is NOT going to be a holiday.

Try to visit your contact and make business
The internal market in china is so big that you will think you are just a bug who wants to buy a windmill.

So bring money
order at least one container 40 foot and pay in advance
do not ask for quality warranty's because you do not have to ask
they offer you this all the time.

Look if they have put up a sample on the factory grounds
AND INSPECT IT TO SEE IF IT IS CONNECTED.
All windmills turn when there is wind !!!

Go home and be happy awaiting your container

for I forget to say
If they get the money in the bank they start to buy the parts to produce the order
and find the people who can do the production.

after at least 3 months and a lot of sleepless nights you may get your container

DO NOT TRY TO SELL ANYTHING TO CUSTOMERS IN THE MEAN TIME
because you do not know if the goods will perform as you think.

But after unloading the container you will find out that the white stuff on the windmills is called paint in china and the brown stuff we already know because also here we call it rust.

So bring your load to the spray shop

Then you go to a manufacturer of on-grid inverters who can help you to get the windmill on-grid

This guy is not really interested because he already knows where it will lead to
and he is very busy to sell hundreds of inverters in the solar industry.
So he will ask you to buy at least one or two pallets of wind inverters.

If you manage this all then hire a GOOD electrician to find out if the two parts
the generator and the inverter will starting to love another.

After blowing up the first 20.000 dollars on electronics he will find a way to couple the things together.

Maybe it would be handy to have also some towers to put the thing on.
and give the people some advice not to kill there selfs and others.

DO NOT ASK THE GOVERNMENT FOR ADVICE BECAUSE THEY DO NOT LIKE WINDMILLS

Happy selling !!!

shall I go on ?

and yes the margin on the windmill is 100%
before everything I just told you

You want to buy cheap windmill please call me
exchange your money against my windmill out of the container and please do not call me for anything else as for the next order.
pay up front off course


I would be happy but you will not and your customers will never.
:D

[Jeff Birkle]

As a machinist and becoming a small wind turbine manufacturer, I can tell you that I will have invested more than $250000.00 on R&D to sell the first one.
That model should break even in about 5 years.

With the new FIT and MICRO-FIT program, solar is the most popular way to go, therefore difficult to sell anything but!

However, with time and some competition, prices will fall slightly, and once LOCAL manufacturers thrive, parts, service and availability become better.

Jeff

[Spanky Tree]

Good day!
Ralph is looking in the right direction, and everyone is right on the cost. The thing with the wind turbines is that they won't come down in price like the VCR. Remember when the first VCR cost 800 bucks?

The main problem is the cost for electrical energy is really cheap. After building the Breezy 5.5 (5000 watt generator) I have a REAL good understanding of energy and what it takes (wind wise) to produce power. Here, it's roughly 12 cents/Kwh. To me, thats really cheap. 1000 watts for 1 hr for 12 cents is CHEAP.

I think what will happen is this, the government/states won't be able to get or force the use of wind power (or solar) with out a huge fight because of the cost. Plain and simple they will find a way to run the cost of electricity up. See where this is going?

Spanky

[Rob Beckers]

Seems Mr. Peters was only interested in stirring up controversy, and flogging his own blog URL. Despite the plethora of reactions there is none from him... If that was indeed Ralph's intent he just lost all credibility with me. :mad2:

-RoB-