Windmill Prices: Could They Be Going Down And Why?
If you are following turbine prices you know they're going down rapidly. Although they have been on the scene for a few years, wind turbine products have gotten on to the market in a large way rather quickly.
The Middle East and its oil supplies that are shrinking, is putting tremendous pressure on other sources of energy to come to the table and finally produce something that can be seen as an alternative to centralized power production, predominantly in the United States. This is good news for the consumer that our prices not only for electricity but for the devices that produce it are dropping rapidly.
The reasons wind turbine prices are coming down are multifold:
One of the reasons is simply that there are more units in the field now. As more people buy home wind turbine kits and other products in this genre, manufacturers are allowed to load up and build an economy scale into their production processes. So, in this sense it is a functional and many people buy - the classic chicken and egg scenario where people won't buy until the prices come down and the prices will come down until people buy.
Another reason to consider in all this is that the government is getting involved in a big way by offering incentives to buy into renewable energy projects of all kinds. In their attempt to divert some of demand away from Middle East oil production, the government is offering tax incentives of 30% the cost of the project. That's not just the cost of the device, but the cost of the entire installation and wind turbine.
Also, manufacturers are offering rebates because the market is so competitive. As more and more units get out in the field, the pressure will be greater on manufacturers to entice new customers to buy from them instead of someone else.
Lastly, as manufacturers are forced to become more competitive, they are building production facilities in Third World and emerging countries. Much of the wind turbine market is now supplied by companies that make or at least assemble these products in China, for example.
Summarizing - wind turbine prices are coming down at a rapid pace. That is largely due the fact that there are so many more out in service and that is spawning new competitors an alarming pace. As more competitors enter the market and prices are driven down more people will buy these units and it will put further downward pressure on prices. This is unfortunate for manufacturers however, because they are having their profits squeezed out at just as alarming a pace.
The Middle East and its oil supplies that are shrinking, is putting tremendous pressure on other sources of energy to come to the table and finally produce something that can be seen as an alternative to centralized power production, predominantly in the United States. This is good news for the consumer that our prices not only for electricity but for the devices that produce it are dropping rapidly.
The reasons wind turbine prices are coming down are multifold:
One of the reasons is simply that there are more units in the field now. As more people buy home wind turbine kits and other products in this genre, manufacturers are allowed to load up and build an economy scale into their production processes. So, in this sense it is a functional and many people buy - the classic chicken and egg scenario where people won't buy until the prices come down and the prices will come down until people buy.
Another reason to consider in all this is that the government is getting involved in a big way by offering incentives to buy into renewable energy projects of all kinds. In their attempt to divert some of demand away from Middle East oil production, the government is offering tax incentives of 30% the cost of the project. That's not just the cost of the device, but the cost of the entire installation and wind turbine.
Also, manufacturers are offering rebates because the market is so competitive. As more and more units get out in the field, the pressure will be greater on manufacturers to entice new customers to buy from them instead of someone else.
Lastly, as manufacturers are forced to become more competitive, they are building production facilities in Third World and emerging countries. Much of the wind turbine market is now supplied by companies that make or at least assemble these products in China, for example.
Summarizing - wind turbine prices are coming down at a rapid pace. That is largely due the fact that there are so many more out in service and that is spawning new competitors an alarming pace. As more competitors enter the market and prices are driven down more people will buy these units and it will put further downward pressure on prices. This is unfortunate for manufacturers however, because they are having their profits squeezed out at just as alarming a pace.
