US green tax credit uncertainty hitting wind investment

As widely anticipated the US has toppled Germany as the world's largest producer of wind energy, but celebrations from the country's wind industry were muted after new data suggested concerns that renewable energy incentives will be allowed to lapse at the end of the year are now impacting investment levels.

Official figures from the American Wind Energy Association (AWEA) released last week showed that the US wind industry installed 1,194MW of new capacity during the second quarter, down from 1,532MW during the first quarter.

The increase meant that while the US' 19,549MW of installed capacity still lags the 23,000MW installed buy Germany it is now the world's leading wind energy generator as a consequence of higher wind speeds.

However, industry commentators warned that the slowing of growth rates that was evident in the second quarter was likely to continue unless US legislators resolve their long-running funding row and renew the package of renewable energy tax credits that are due to expire at the end of the year.

"The current figures hide a dire reality," warned AWEA executive director Randall Swisher. "The pipeline of investment for 2009 has been on hold for months, with escalating risks and costs for the industry, because of the uncertainty about the production tax credit."

The AWEA report claims that a minimum of 7,500MW of new wind energy capacity is currently in the pipeline for next year, while over 40 turbine manufacturing facilities have been opened or announced, creating over 9,000 jobs. But it also warns that much of this investment is dependent on the tax credits that help make many wind energy projects financially viable being extended.

Swisher argued that with the wind industry providing a source of both clean energy and new jobs the "rapid extension of the credit should be on any economic priority list for Congress".