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Tax Credit End May Slice Wind-Industry Jobs by Half, Study Shows

Half the jobs in the U.S. wind-power industry, or about 37,000 positions, may be lost unless Congress extends a tax credit set to expire at the end of 2012, according to a study released by a trade group.

The analysis, by Chicago-based Navigant Consulting Inc., was released by the American Wind Energy Association today as it lobbies to save a 2.2-cent per kilowatt-hour credit that advocates say helps wind operators compete with natural-gas producers for new electricity production.

While the credit doesn’t end until Dec. 31, 2012, Congress should act soon to give investors greater certainty in backing projects, Denise Bode, chief executive officer of the Washington-based wind group, told reporters today. A four-year extension could add 17,000 U.S. jobs, according to the study.

Uncertainty about the credit’s status is “stifling any potential for growth,” said Bode, whose group includes Fairfield, Connecticut-based General Electric Co. (GE) and Siemens AG (SIE), based in Munich.

The study predicts about 2 gigawatts of wind power will be installed in 2013 without the credit, compared with about 8 gigawatts of power projected with it in 2012. A gigawatt powers about 300,000 homes.

Total wind investment will drop by almost two-thirds, to $5.5 billion in 2013 from $15.6 billion in 2012, according to the study.

Congress hasn’t signaled plans to extend the credit as leaders negotiate deals on a payroll tax-cut extension and spending bills before aiming to adjourn this month.

Senators Seek Extension

A letter signed by 15 senators was sent on Dec. 9 to Senate Majority Leader Harry Reid, a Nevada Democrat, and Minority Leader Mitch McConnell, a Kentucky Republican, saying the production tax-credit extension should be added to “any tax legislative vehicle as soon as possible.”

Senator Charles Grassley of Iowa, a state that’s the second-largest U.S. producer of electricity from wind, was the only Republican to sign. In the House, Representative Mike Pompeo, a Kansas Republican, introduced a bill to repeal energy- specific tax breaks.

More than 60 percent of components that make up a wind turbine are made in the U.S. in more than 400 manufacturing plants in 43 states, according to the wind group.

Kevin Hazel, vice president for supply-chain management for Wind Power Americas, a Siemens unit, said the division has expanded to 1,800 employees from one worker in 2005.

The loss of the credit would have a “definite impact” on jobs and could jeopardize the company’s expansion plans, Hazel told reporters.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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