In 2012, a 100 kW wind turbine was installed at Iowa State University. The wind turbine is expected to generate 183,330 kWh of electricity annually.

In 2012, a 100 kW wind turbine was installed at Iowa State University. The wind turbine is expected to generate 183,330 kWh of electricity annually. Rather than purchasing the wind turbine for a cost of $530,000, the university agreed with PUREnergy to pay $250,000 upfront and to purchase all electricity generated by the wind turbine at a cost of $0.10/kWh for the first 10 years after which ISU will have full ownership of the wind turbine. The wind turbine has an expected life of 20 years and PUREnergy is responsible for the operating and maintenance costs of $0.01/kWh during the initial 10 years of operation. Assume an interest rate of 5%.

1. What is the levelized cost of the electricity generated by the wind turbine over its lifetime ($/ kWh)?
2. What would be the levelized cost of the electricity generated by the wind turbine if it had it been fully purchased by ISU for $530,000 ($/kWh)?
3. What is the expected capacity factor of the wind turbine (%)?