Summary:

The problem with small wind turbines is that they deliver just that: small amounts of power. But startup WindStream Technologies plans to start selling a modular, meter-tall system that can stack like Legos, starting in the first quarter of 2011.

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The problem with small wind turbines is that they deliver just that: small amounts of power. But what if you daisy-chained a whole bunch of modular wind turbines that could stack together like Legos and line sides of buildings, highways and rooftops? That’s the idea behind WindStream Technologies, a startup that plans to launch its TurboMill meter-tall wind turbine, which is about the size of a satellite dish, in the first quarter of 2011.

Each half-a-kilowatt TurboMill has three vertical blades that WindStream CEO Dan Bates says maximizes the swept area, or the amount of space that the blades can cover. A typical house might install three TurboMills on a roof, for about $1,200, or $400 to $500 per TurboMill. Bates says with that math the TurboMills can have a return on investment in about three years. In a lot of cases that’s a better ROI than a rooftop solar panel, and Bates says it can be seven times less than solar.

The eight-person team has been incubated at Purdue University, and has also been working with UCLA’s wind lab. So far WindStream has raised an angel round but is working on a Series A, which it hopes to close shortly. Customer wins include a pilot project to build a 150 kilometer “carbon-free” highway in Mexico, as well as orders for turbines with the governments of Brazil, Mexico and Ghana.

According to Pike Research the global small wind market — turbines of 100 kw and under — will expand to $412 million in revenue by 2013 from $203 million in 2009, delivering a compound annual growth rate of nearly 20 percent. During that same period, worldwide installed capacity of small wind turbines will reach 115 MW from about 49 MW in 2009, the study predicts.

About two years ago, there seemed to be a turning point for the small wind market, at least in the U.S. The U.S. Congress passed federal tax credits of up to $4,000 for small-wind systems, a major win after a 23-year hiatus in small-wind incentives, and the technology also received support from cities like San Francisco and New York.

Today there are more than a dozen small wind players, including some more established ones. Two-decade-old Southwest Windpower is one of those leading firms, and it makes traditionally-shaped, but small, wind turbines that range between $600 and $3,000 per turbine. Southwest has raised money from GE, Altira, Rockport Capital Partners, NGP Energy Technology Partners, and the venture capital arm of Chevron Technology Ventures.

Another small wind firm that seems to be doing well is Mariah Windpower, a vertical axis wind turbine maker, which is backed by  Noventi Ventures, Greenhouse Capital, BigSky Partners and the Sierra Angels. Founded in 2005, Mariah makes a slim, 30-foot-tall turbine with straight blades that spin vertically to produce up to 1.2 kilowatts of power. The company claims the vertical axis enables the turbine to spin more slowly – just two to three times the speed of the wind – making it quieter than the usual pinwheel-shaped turbines.

WindStream’s Bates says TurboMill doesn’t really compete with these taller wind turbines, which are effective in places with a lot of open space (like a farm). Instead, WindStream is aiming directly at urban wind, and sees the modular TurboMill scattered across city building tops, and streets. As long as cities and home owners like the aesthetics, and the ROI delivers as advertised, we could see these lego-like structures sprouting up across urban landscapes starting in 2011.

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