First it was solar power companies laying off employees, and now wind power manufacturers are following suit. You can blame the economic downturn and credit crunch.
Earlier this month, Fargo, N.D.-based wind tower maker DMI Industries
announced it would cut about 20 percent of its workforce
at its North Dakota, Oklahoma and Ontario factories. The company said it now expects 2009 demand to be 25 percent to 35 percent lower than in 2008 — a sharp turnaround from expectations of an even better 2009 that led it to announce a big expansion
Danish windmill blade maker LM Glasfiber
is also feeling the crunch. Earlier this month it said it would cut 150 jobs
at its Little Rock, Ark. factory, open less than a year. Arkansas Gov. Mike Beebe told the Southwest Times Record newspaper that the economic downturn may lead to the scaling-back of other wind power manufacturing operations in the state, including those of Polymarin Composites USA Ltd., Wind Water Technology and Nordex USA Inc.
And Spanish wind turbine maker Gamesa
is cutting about 180 of 720 workers
at its Bucks County, Penn. plant, though the company said it might add workers at another turbine factory in Pennsylvania. Gamesa in October said it was temporarily halting production
at its factories, citing slowing demand.
That's a common refrain in the wind power industry. With credit for large-scale projects drying up, wind farm developers are having more difficulty financing projects, turning a shortage of wind power equipment into a potential glut (see WInd Turbine Shortage Over?
and Energy Financing Gone With the Wind
The economic headwinds have put a crunch on the plans of Florida-based U.S. wind power developer NextEra Energy Resources
, formerly named FPL Energy (see FPL Cuts Wind Power Plans
) and Texas oil billionaire and wind power evangelist T. Boone Pickens alike (see Knocking the Wind out of Pickens
A similar story is playing out in the solar power industry, as the credit crunch and faltering economy have run head-on into an oversupply of solar panels and the polysilicon that is used to make them. Companies announcing layoffs in the past months include Suntech
, and reportedly SunEdison
Both industries are appealing to Congress and President-elect Barack Obama for help, calling on a shift of federal tax credits for renewable energy projects to direct payments (see Industry Groups Call for Changes to Federal Incentives
). The recent financial losses of Wall Street banks and other traditional backers of renewable energy projects have all but done away with their appetite for tax credits, renewable industry advocates say.
The so-called "refundable tax credits" don't appear in a draft of an $825 billion stimulus bill being proposed by House Democrats and the incoming Obama administration that was released Thursday.
But the draft bill did include more than $20 billion
for renewable energy tax cuts
and a tax credit for research and development
on energy conservation, energy efficiency and renewable energy. That includes $8 billion in loan guarantees for renewable energy power generation and transmission projects.