Wind industry shed 30K jobs last year, blames tax credit uncertainty

Source: Nick Juliano, E&E reporter • Posted: Friday, April 11, 2014

The wind industry didn’t just see the number of new turbines it brought online fall off a cliff last year, it also shed more than a third of its workforce as project developers, manufacturers, utilities and other companies struggled to rebound following the brief expiration of a prized tax incentive, the American Wind Energy Association said today in its annual report.Total employment in the industry fell to 50,500 at the end of last year, down from 80,700 workers at the end of 2012, according to the AWEA report, which calculates the figures based on “full-time equivalent” employees across hundreds of companies in the industry.AWEA pins the blame for the downturn on Congress’ delay in extending the production tax credit (PTC), a $23-per-megawatt-hour subsidy the industry says it will need for at least a few more years.The credit was renewed Jan. 1, 2013, but because of uncertainty over its fate throughout the preceding year, developers were not planning new projects, meaning turbine orders were not being placed and there was drastically less need for workers who otherwise would be building wind machines, transporting them to project sites and performing other jobs needed to bring a wind farm online.

“Given the lead time required to assess, site, permit, develop, finance and build capital-intensive power plants including wind projects, it took months for the industry to start moving again and begin to build momentum,” AWEA says in the report.

Just 1,087 MW of projects were completed last year, a 92 percent drop from the more than 13,000 MW installed in 2012, according to the AWEA report. But the group says better times are on the horizon, with more than 12,000 MW of projects currently under construction thanks to expanded eligibility requirements added to the PTC when it was last renewed.

The report also touts a 43 percent drop in the cost of wind energy over the last four years, and it highlights a record 60 power purchase agreements signed last year for a total of 8,000 MW of power, including 5,200 MW that is not yet under construction.

Still, AWEA is lobbying for yet another extension to the PTC, which is unavailable to projects that were not under construction before Jan. 1. A two-year extension was included in a broader tax extenders bill that passed the Senate Finance Committee last year, but it remains to be seen how quickly it comes to the floor.

In his introductory letter to industry members, AWEA CEO Tom Kiernan says securing a stable, long-term federal policy through tax reform or an energy bill is a key goal, but he warns that a PTC extension is needed in the immediate future to prevent another cliff.

Other policy priorities include defending state-level renewable portfolio standards, addressing impacts to birds and other wildlife, and working on transmission and integration issues before the Federal Energy Regulatory Commission.

“While Congress debates [comprehensive tax reform] and potentially a national energy policy, continuity is needed for wind energy to preserve all the investment and jobs that have been created by the wind industry,” Kiernan writes. “Without certainty, more drop-offs of the kind that occurred at the beginning of 2013 will once again occur.”