The U.S. wind energy market may be about to be hit by a massive bombshell. A wind power tax credit is set to expire at the end of the year, and if it is not renewed, the market could shrink by an astonishing 95 percent, according to the world’s largest manufacturer of wind turbines. With Mitt Romney and congressional Republicans making noises that they will oppose the renewal of this 20-year old tax credit this fall, the wind-power industry is sounding the alarm and rushing to take advantage of the tax credit before it expires. The FT reports:
. . . Matt Kaplan of IHS, the research group, said even if it were renewed later this year or early in 2013, there would still be a steep decline in the turbine market because of the hold-up in new orders.
“It’s a very difficult time for the wind market,” he said.
“Manufacturers are going to go from making turbines as fast as possible to almost a complete stop.”
Vestas has warned that 1,600 jobs are at risk if the credit is not renewed, and the American Wind Energy Association, the industry group, has predicted 37,000 jobs would go across the industry.
It is entirely possible that these alarming statistics are merely a self-serving measure to scare Washington into renewing the credit. But regardless of how you look at it, this is a bad sign for the wind industry. If your business can’t survive without a government subsidy after 20 years of trying, you are doing something wrong.
This exposes the basic problem that continues to frustrate the green lobby: On a level playing field, green energy just can’t compete.