Dan Juhl, Founder, Danmar & Associates, Woodstock, Minn. As investors like Warren Buffett recognize wind power's potential, this consultant is helping farmers cash in.
(FORTUNE Small Business) – When the history of wind power is written, Dan Juhl will rate a chapter. He's like one of those inventors you see in an old newsreel, tinkering with a jalopy or taking wing in an ungainly flying machine. Juhl runs a large wind farm in southwestern Minnesota and also owns a consulting business that helps others to profitably harness this ubiquitous but elusive form of energy.
Wind power is the fastest-growing U.S. energy source. Over the past five years capacity has increased 32% annually, and major players such as General Electric and Warren Buffett are scrambling for a piece of the action. MidAmerican Energy Holdings, a company in which Buffett owns an 80% stake, has just announced plans for the world's largest wind farm in Iowa. At the same time, wind power remains a tiny industry, currently generating only enough juice to power 1.5 million homes. As to whether it will ever fulfill its promise, the answer is, well, blowing in the wind.
Juhl has always been a gadget freak. He was drafted into the Navy fresh from vo-tech school in 1970 and served as a technician. Returning to his native Minnesota after Vietnam, he played guitar in a couple of journeyman rock bands, Renegade and Smokehouse, and customized his own amps to get fuzz tones and other effects. When Smokehouse broke up after typical band squabbles, he headed off to Alaska on a whim.
In Fairbanks, Juhl made part of his living installing Jacobs machines, the familiar style of windmill that used to dot the American countryside. That experience helped land him a job with Aerostar, a Danish manufacturer of turbine blades. As a technical liaison, he helped set up wind farms in China and India. But Juhl soon grew tired of Aerostar and started looking for a new opportunity. "There were hardly any other wind-power companies to work for," he says. "I decided to beat my own path."
So it was back to Minnesota once more, where Juhl launched the Woodstock Wind Farm in 1993. He negotiated attractive terms on a land lease and plunked down his life savings. Currently Juhl has 17 Vesta V-44s--state-of-the-art turbines--operating on 320 acres of land. His wind farm grosses $1.6 million a year, and it's profitable, thanks to a 25-year contract to sell electricity to the utility Xcel Energy.
Woodstock Wind Farm (named for a nearby Minnesota town, not the music festival) serves as exhibit A for Juhl's second successful venture, a consulting firm called DanMar & Associates. His notion here is to market his wind-energy expertise. As for clientele, Juhl's chosen consulting niche is farmers. "Farmers are always looking for ways to diversify," says Juhl. "But they don't have a lot of options. The goal is to treat wind like another crop. You can harvest corn and beans and wind."
DanMar & Associates--a six-person outfit--has worked with about 30 farmers so far. Annual revenues at this second, also profitable venture are $750,000. But setting up a wind farm is confoundingly complicated--the very reason there's a market for Juhl's consulting services.
Wind turbines weigh about 50,000 pounds each and stand as high as 200 feet. The heavy-duty crane used to erect them arrives at the site unassembled, with parts spread out among roughly 20 semis. Two turbines--the typical starting point for a farmer--cost about $1.5 million, and getting a mortgage from a bank can be a challenge. Still more complex is forming a relationship with a utility and qualifying for any tax breaks a state offers.
DanMar's very first clients were the Kas brothers, Roger and Richard. The pair set up two turbines on their farm and found a utility to buy the electricity, but the process took more than three years. "It's very complicated," says Roger Kas. "We had to get all kinds of permits: environmental-impact permits, aviation permits for planes that fly over."
Despite the delays, the brothers Kas are happy with the outcome of their efforts. "Juhl is a very good consultant," says Roger. "The cash flow from the windmills is paying the bills and leaving a little left over for us."
The Kas brothers' experience points out the dual nature of wind power. Yes, the wind blows everywhere. But harnessing its power for human consumption requires navigating a mind-numbing logistical and regulatory maze. Here's some more duality: While wind power is the fastest-growing U.S. energy source, it's expanding off a minuscule base. Total current output is enough to replace roughly three nuclear reactors. By 2020 the American Wind Energy Association predicts that wind will have grown to provide 6% of the nation's electricity. That would still be a mere dent measured against other sources such as coal, which currently produces about half of the electricity used in the U.S.
Meanwhile, Juhl plans to continue tilting at windmills, quite literally. "Wind is cleaner than coal, and it's safer than nuclear," says Juhl. "We went to war in Iraq in part to defend a source of foreign energy. There's an unlimited supply right here in the United States."