Wind power surged ahead in the United States last year with a record-breaking growth of 8,300 megawatts – but the economic downturn may give the industry serious headwinds to contend with in 2009.
That's the news from the American Wind Energy Association, which says last year saw a 50-percent increase in the nation's wind power resources for a total of 25 gigawatts, enough to power approximately 7 million homes.
Last year's growth represents an investment of $17 billion, and made up about 42 percent of the total power-generating capacity the country added last year, AWEA reported. The United States overtook Germany last year to become the world leader in wind power (see U.S. Wind Power Doubles in Two Years and Wind Power Waiting on Transmission-Line Boom).
But last year's record growth came before the economic downturn and credit crisis dried up financing for massive wind power projects, AWEA's CEO Denise Bode said in a prepared statement (see Energy Financing Gone With the Wind and Wind Turbine Shortage Over?).
And like other renewable energy producers, the wind power industry is asking the federal government for help.
"We are already seeing layoffs in the area where wind's promise is greatest for our economy: the wind power manufacturing sector," Bode said. (See Wind Power Joins Solar in Layoff Trend)."Quick action in the stimulus bill is vital to restore the industry's momentum and create jobs," she added.
Wind power projects can receive a tax credit for the energy they produce, and that so-called production tax credit was extended through 2009 in an energy package passed by Congress in October (see Lawmakers Approve Energy Tax Credits, Bailout).
The stimulus bill working its way through Congress now contains language that would extend the production tax credit for wind power for three years.
But wind power developers say that tax credits have become far less useful as an investment incentive, since so many Wall Street banks and other traditional renewable energy investors have lost money in 2008, and thus don't need to offset taxable income (see Industry Groups Call for Changes to Federal Incentives).
But the stimulus bill may help fix that problem by allowing wind power developers to claim investment tax credits in lieu of credits for producing power, along with a possible shift to direct payments to investors in renewable energy – a combination that renewable energy developers are lobbying furiously for (see More Stimulus for Renewables? And Tax Credit Fix for Solar in the Works).