Southwest Windpower said Tuesday it will start shipping its small-wind generator for homes in August, providing another choice for homeowners who want to generate their own green power.

The company turned heads in April when it raised $8 million to commercialize the generator, called Skystream. Investors included RockPort Capital, Altira Technology Fund IV, and CTTV Investments, the venture arm of Chevron Technology (see An iPod for Wind Power?).

“Skystream will change the way many Americans power their homes and take control of their energy costs,” said Andrew Kruse, co-founder and vice president of business development. “Wind energy for the individual is finally mainstream.”

As conventional energy prices soar, more homeowners are choosing to generate their own power. Right now, homeowners generally choose between solar power systems or—if they have a stream—water power.

But small-wind turbines can work better in areas with more wind than sun, or can be integrated to work together with solar power systems, said CEO Frank Greco.

Southwest isn’t the only company that believes in the future of small wind. Companies such as Bergey Windpower, McKenzieBay, Magenn Power, Selsam Superturbine, Windside, Renewable Devices, and Kestrel Wind Turbines are among those pursuing the small-wind market.

So far, small-wind turbines make up a small market. At the end of 2004, small-wind capacity in the United States totaled only 30 megawatts, compared with 6,725 megawatts of utility-scale wind power, according to the American Wind Energy Association. “Utility-scale” turbines come in capacities of 1.5 to 2 megawatts.

Installation Complications

Southwest Windpower contends that more homeowners would choose wind power if it weren’t so complicated to install, requiring a number of inverters and controllers.

“When we see the cost of electricity going up everywhere in the United States, I know this is not a bubble, but something that is really taking hold over the country,” Mr. Kruse said.

Skystream includes all the inverters, controllers, and other parts integrated in the generator, meaning that electricians only need to wire it to the house and plug it in, said Mr. Kruse.

That lowers the total installed cost to between $8,000 and $10,000—including $5,150 for the generator and between $1,000 and $3,000 for the tower, depending on height and design.

At that cost, and with a life span of 20 years, the system would deliver power for between $0.08 and $0.09 per kilowatt hour, Mr. Kruse said. That compares with a price of $0.15 to $0.20 per kilowatt hour for other small-wind technologies and for solar power, at least in the U.S., he said.

Skystream’s design also includes no gears, allowing the turbine to produce electricity in as low as 5 mph winds—although it needs 8 mph winds to start turning—and keeping the rotation speed to between 320 and 325 rotations per minute, compared with competitors’ turbines, which range from 600 to 1,000 rpm, said Mr. Kruse.

That lower speed keeps the noise down, and the simpler design increases the reliability, he said.

Growing Segment

“When people see this operate, it takes away a lot of the concerns they might have had in implementing a new technology,” said Mr. Kruse. “Skystream will demonstrate that renewable energy can be produced at the residential scale at a very cost-effective level. I think we will see this become a really fast-growing segment of electricity.”

Southwest plans to make about 1,500 of these turbines this year and then ramp up to about 1,000 per month in 2007.

Distributors include Energy Outfitters, Canadian Tire, SunWise Energy, and large solar integrators Conergy and Kyocera.

Still, challenges remain. Mr. Kruse said working with utilities to get interconnection will probably be one of Skystream’s greatest challenges. And skeptics abound.

A number of small wind turbines have proven to be unreliable in extreme weather, and Walter Sass, president of Second Wind, which makes wind electronics and software, said grid-connected small-wind turbines don’t make sense (see Winds of Change).

Few people are qualified to provide maintenance and service for wind turbines, and those that are often don’t find it worth their while to cater to small, single turbines, said Mr. Sass. Also, turbines are still too noisy for most home applications, and most require more windy conditions than most people like to live in, he said.

Contact the writer:JKho@RedHerring.com