The wind industry pulled out the big guns to drive the point that inconsistent tax policy has a cost. A new study was released to show that one-half of its manufacturing jobs are at risk without a renewal of the production tax credit beyond 2012.
The credit may be on the books for another year, but the industry supply chain would show signs of collapse in about six months, representatives of the wind manufacturing sector said in a conference call sponsored by the American Wind Energy Association.
A new study released this week said stable tax policy would create and save 54,000 American jobs in the next four years, including growing the wind manufacturing sector by one third to 46,000 American manufacturing jobs. This will keep the wind sector on track toward supporting the 500,000 jobs by 2030 projected in a report by the U.S. Department of Energy.
The report by Navigant said that if Congress allows the production tax credit (PTC) for wind to expire, jobs in the wind industry will be cut in half, meaning a loss of 37,000 American jobs and a one third cut to American wind manufacturing jobs, while private investment in the industry would drop by nearly two thirds.
Without the certainty of a continued credit, order books for 2013 would mostly disappear, representatives from a turbine manufacturer, a gearbox builder and a steel tower fabricator.
Siemens entered the wind business in 2005 and now employs 1,800 in facilities mostly in the Midwest, representing a $100 million investment.
“All of that growth is now jeopardized if the PTC is not extended,” said Kevin Hazel of Siemens. “The planning cycle in our industry is in excess of a year” which is causing customers to scale back on their orders.
With a four-year extension of the PTC, 100,000 new jobs would be created, according to the study.
AWEA said there are now more than 400 U.S. facilities supplying wind turbine components.
American manufacturers have seen a drop in orders, and layoffs have already started. For the purposes of the American wind industry manufacturing sector, which needs lead time to make its products, the PTC effectively expires at the end of this year, AWEA said.
“If this goes well into 2012, we’ll see a significant downturn in the industry, just as we did before (when the credit lapsed),” said Terry R. Royer, CEO of Winergy Drive Systems Corporation.
Bipartisan legislation recently introduced by Representatives Dave Reichert (R, Wash.) and Earl Blumenauer (D, Ore.) seeks to grant a four-year extension to the existing PTC, which has enjoyed bipartisan support since 1992, despite its occasional lapses.
A four-year PTC extension has the support of the bipartisan Governors’ Wind Energy Coalition comprised of 23 Republican and Democrat Governors from across the U.S.
But can that be translated into votes in Congress in December of 2011?
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