Wind farm business plan: method and financial model

The business plan of a wind farm follows the same logic as a solar business plan, with specifics of its own: more variable generation, a higher capacity factor, and a decommissioning provision not to be forgotten. Here is the method.

1. Generation: power curve and wind

Generation comes from crossing the turbines' power curve with the site wind data (speeds, distribution). From this you derive a yield in P50/P90, after losses (wake effect between machines, technical availability, electrical losses). The wind capacity factor (often 25 to 40% onshore) is higher than solar.

2. Revenue: contracted then market

Onshore wind is often supported by a contract for difference / feed-in premium (awarded through tenders), then switches to market sale at end of contract. As with solar, the model must handle the contract-to-merchant transition and indexation.

3. CAPEX, OPEX and decommissioning

• CAPEX: turbines, foundations, grid connection, civil works, development.
• OPEX: maintenance contract (often high in wind), insurance, leases, royalties.
• Decommissioning: regulatory provision to restore the site, included at end of life.

4. Financing and returns

The farm is financed with senior debt + equity, sized by gearing or by DSCR. You then compute the IRR (project and equity), the NPV, the DSCR and the LCOE to judge returns and bankability.

5. From farm to portfolio

A wind developer often runs several farms: consolidation (holding/SPV, corporate debt, sell-downs) and the NAV valuation of the portfolio then become central — exactly what the method of the renewable financial business plan covers.

6. Measuring the wind: uncertainty at the core

Unlike solar, whose irradiation is well mapped, wind generation depends on a local, turbulent resource. Hence the importance of a measurement campaign (mast or LiDAR) on site, sometimes over several years, correlated with long-term data. The business plan must show the yield uncertainty: the gap between P50 and P90 is generally wider than in solar, which directly affects the amount of debt a bank will accept.

7. Risks specific to wind

• Acceptability and appeals: litigation can delay commissioning — a schedule risk to model.
• Wind variability: a poor wind year reduces revenue; the P90 and DSCR must absorb this risk.
• Heavy maintenance: wind OPEX (large components, access) is proportionally higher than in PV.
• Repowering: at end of life, replacing machines with more powerful ones can extend the site's value — an option to value separately.

To estimate returns quickly (adapting yield and CAPEX to the wind profile), you can start from the ROI calculator.

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