European wind manufacturers that invested in U.S. factories to meet growing demand for renewable energy are counting on developing markets in the rest of the Americas to weather an expected slump. U.S. sales are already slowing and are expected to plunge next year if the credit lapses, according to Bloomberg New Energy Finance.
“We are using our manufacturing in the U.S. to export,” David Flitterman, chairman of Gamesa’s North American unit said today at a media briefing.
Those shipments may not offset the expected decline in U.S. sales. “Exports from the U.S. will be an important strategy but you don’t get the volumes you need,” he said.
The so-called production tax credit, which offers a 2.2- cent-a-kilowatt-hour credit for electricity produced by wind turbines, biomass, geothermal and landfill-gas plants, is due to expire Dec. 31. A bill to extend it has stalled in Congress and wind-industry executives are urging its renewal at the Windpower conference this week.
There are about 75,000 U.S. wind-industry workers, according to the American Wind Energy Association. Letting the credit lapse will lead to the elimination of 10,000 wind- industry jobs this year and another 27,000 in 2012, the Washington-based trade group estimates.
Though some of those job cuts may be averted by manufacturers’ efforts to use exports to keep their U.S. production lines running, the industry still needs the production tax credit to be extended, according to AWEA.
“I don’t think that undermines our PTC messaging at all,” said Ellen Carey, an AWEA spokeswoman. “The industry pumps over $15 billion of private investment into the U.S. every year. As Siemens and Gamesa said, these are global companies that can look elsewhere to build and develop.”
If the credit is allowed to lapse, installations of turbines in the U.S. may fall as much as 95 percent to 500 megawatts in 2013 from this year, according to Bloomberg New Energy Finance.
“We do expect to have some volume in the U.S. next year,” even with the tax credit expiring, Mark Albenze, chief executive officer of Siemens’s energy unit in the Americas, said at the conference. “We’ll be increasingly turning to exports into countries like Canada and Chile.”
To contact the editor responsible for this story: Reed Landberg at firstname.lastname@example.org