Congress’ inaction on the production tax credit is creating some serious consequences for the wind industry. Gamesa, a leading wind turbine manufacturer, just announced that it will be forced to lay off 165 of its workers at two plants starting this fall as a result of Congress’ failure to renew this important subsidy.
As the wind industry’s largest source of federal financial support, the production tax credit has done much to fuel the recent rise of wind. However, with its December 2012 expiration date looming, support for the sector is in decline as investors predict a rise in prices when the wind industry will be forced to compete on its own with a heavily subsidized fossil fuel industry. Gamesa officials said that the pending tax credit expiration has contributed to a “significant drop in demand for new turbines.”
Gamesa isn’t alone. Vestas, the world’s largest wind manufacturer, predicts it may soon have to fire 1,600 workers if the PTC expires, and a wind developer has scrapped a $20 million project in Ohio that would otherwise have created 200 construction jobs. Some turbine-makers have started considering foreign markets as their lifeline, threatening to cede much-needed jobs to other countries.
Congress must prioritize the renewal of the PTC before it takes an even greater toll on wind energy. Doing so will reassure investors of the promise behind this important emerging industry, revitalizing investment and facilitating our transition to a clean, sustainable economy.