Upcoming Death of Tax Credit Threatens Wind Industry

by Luke Jones  on Monday, Aug. 27, 2012 12:00 am  

Kelley said he expected the credit to be renewed, but it will likely be at the very last moment.

Pryor said the Senate Finance Committee passed the credit a few weeks ago, but it hadn't gone through the Senate or House.

"There's going to be some opposition in the Senate," Pryor said. "A few senators are opposed to wind power, but by and large most senators understand that this is a good source of electricity. Wind power will continue to play a role in electric generation in the country. I think the future's actually bright."


Losses by Number

The tax credit drove company expansion and made it cost competitive with other forms of energy, and Kelley said that's true even with natural gas reaching record low stock market prices.

"Wind energy offers a fixed contract," he said. "Utilities want to buy wind energy to serve as a hedge against cheap shale gas, which is historically volatile."

But the gridlock in Congress is weakening what looked like a sturdy industry.

"In the midst of that, companies make decisions," Kelley said. "They're laying people off and hoping Congress can act swiftly enough."

The local job loss started when Danish energy giant LM Wind Power announced early this month that it was laying off more than 200 of its workers at its blade factory in Little Rock - 80 hourly employees, 14 salaried employees and 140 temps. That's about half of its state workforce. Earlier this year, Mitsubishi announced it would mothball its planned $100 million turbine assembly plant in Fort Smith, which would have brought 300 jobs to the area.

The winds of uncertainty have been blowing across other parts of the nation, too. Hundreds of jobs have already been lost.

In August, DMI Industries of Fargo, N.D., announced it would lay off almost 400 workers in Tulsa and West Fargo, N.D., by November. Trinity Structural Towers said it would shift its resources away from its turbine tower-manufacturing facilities in Dallas. And those were just the August layoffs: Gamesa, a Spanish wind power company, laid off 165 Pennsylvania workers in July; NRG Systems of Hinesburg, Vt., furloughed 30 of its employees between May and July; Vestas of Denmark laid off 182 in January; Iberdola Renewables of Portland, Ore., laid off 50 in January; and Windlogics of St. Paul, Minn., cut off 10 in July.

AWEA reported that, if this continues, the country stands to lose about 37,000 jobs by the first quarter of 2013.



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