Unusual coalitions clash over wind energy tax credit

September 21, 2012 by  
Filed under Green Energy News

The result is an unpredictable and intense lobbying fight.

“This is a pivotal moment for that industry,” said David G. Victor, an international relations professor at the University of California at San Diego and an energy expert.

The battle over the wind production tax credit — which can cut the cost of developing a wind project by nearly a third — centers on a single question: Is the wind industry mature enough to survive without the tax break it first received 20 years ago, or does it need a lifeline for a bit longer?

As the Dec. 31 expiration deadline looms, wind manufacturers and their suppliers are shedding jobs and scaling back operations. Siemens Wind Power, a major turbine manufacturer, announced Tuesday it was laying off more than 900 employees. Earlier this month, wind tower maker Katana Summit said it would shut down plants in Nebraska and Washington, putting nearly 300 out of work, while wind blades manufacturer Molded Fiber Glass announced it would pink-slip 92 of its 370 workers in Aberdeen, S.D.

“Companies have been investing on the basis that [the tax credit is] there,” said Joseph A. Stanislaw, an economist who runs the JAStanislaw Group. “It changes the game. Every time you pull it, or threaten to pull it, you throw the industry into disarray.”

Liz Salerno, chief economist for the American Wind Energy Association, said in an interview that while wind has made technological advances and is increasingly competitive with traditional sources of energy, the uncertainty surrounding federal policy has rattled the industry.

“It’s hard to make those new investments in bringing down costs when you don’t know what the world will look like a hundred days from now,” Salerno said.

The layoffs have been particularly potent because several swing states — including Iowa, Colorado and Ohio — have significant wind manufacturing. The industry accounts for more than 3,200 current or planned manufacturing jobs in Iowa and 3,000 in Colorado, according to AWEA. Ohio ranked as the fastest-growing state for new wind-power installations last year and has 50 manufacturing facilities.

Romney says he would end the programs Obama has pursued to support solar, wind and other renewable energy manufacturers, including the wind tax credit. He has backed a renewable fuels standard, however, and has not called for an end to the tax breaks for oil and gas firms.

“Governor Romney . . . agrees with the industry’s own assessment that a boom-and-bust cycle driven by short-term incentives is not conducive to business investment and increased employment,” Romney spokeswoman Andrea Saul said. “Instead, he believes the right path forward is to create a stable and level playing field for all energy sources that encourages and rewards innovation, on which the wind industry can compete and win wherever its technology is economically viable.”

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