Credit: Pedro Armestre/ Getty Images

The U.S. Energy Department’s new “2011 Wind Technologies Market Report” signals growth at a time when the wind power industry is bracing for what could be the end of key federal tax incentives that are crucial to its progress.

Released this week, the report underscores growth in new wind power capacity, while revealing that for the third consecutive year, the United States remained the second-largest market in annual and cumulative wind power capacity, behind China. State-wise, California added the most new wind capacity in 2011.

The findings also highlight that domestic wind turbine and component manufacturing capacity has increased. According to the report, “Eight out of 10 wind turbine manufacturers with the largest share of the U.S. market in 2011 had one or more manufacturing facilities in the United States at the end of 2011.”

Yet despite the optimistic findings, the report also reveals that the wind energy industry is “facing uncertain times,” with the end of federal incentives in sight. The government’s Production Tax Credit (PTC), which is currently in jeopardy of expiring without being renewed, is a threat to the stabilization of the industry.

In light of the Energy Department report, President Barack Obama, who has been criticized for falling behind on large-scale promises of renewable-energy-based job creation, emphasized the importance of wind power during his re-election campaign tour in Iowa this week. He also criticized his presidential opponent, Republican Mitt Romney, over his opposition to tax credits, the amount of which wind power companies receive based on how many megawatts of energy they produce. Obama has argued that such tax credits stimulate industry growth and job creation.

The wind energy industry is also supported by the Advanced Energy Manufacturing Tax Credit. It provides “a 30 percent investment credit to manufacturers who invest in capital equipment to make components for clean energy projects in the United States.”

The delay in renewal of the tax credits by Congress has several consequences, according to the American Wind Energy Association (AWEA). It emphasizes that financial lenders will be hesitant to provide capital in an uncertain policy climate, halting wind projects and development. Additionally, as wind power developers strive to fulfill projects before the PTC’s expiration  in a short amount of time, costs and electricity prices will climb.

During his Iowa visit, Obama emphasized the importance of the tax credits. “Wind power is creating new jobs all across Iowa,” he said. “America generates more than twice as much electricity from wind than when I took office … Wind energy supports about 7,000 jobs right here in Iowa. Without these wind energy tax credits, those jobs are at risk, 37,000 jobs across the country would be at risk.”

The AWEA estimates that at the end of 2011, the entire wind energy sector directly and indirectly employed 75,000 full-time workers in the United States. While this number was the same as the number of jobs in the prior year, it was fewer than 2008 and 2009 numbers.

Three years ago, the president vowed, “We’ll put nearly half a million people to work building wind turbines and solar panels, constructing fuel-efficient cars and buildings and developing the new energy technologies that will lead to new jobs.”

Yet recent reports have highlighted independent studies that show the number of jobs created in clean-tech industries was significantly lower than the White House’s total of 224,500 jobs. Heat has also come from the $535 million taxpayer loss in solar manufacturer Solyndra, a company that has gone bankrupt.

In his presidential campaign, Romney has been largely critical of the shortcomings and failures, stating, “In place of real energy, Obama has focused on an imaginary world where government-subsidized windmills and solar panels could power the economy. This vision has failed…”

For now, while the tax credit deadline looms, the wind energy industry faces an uncertain future. But the Obama administration is striving for the PTC to be renewed, thought it faces opposition from a Republican-dominated House.

“You can expect to see this [renewal] will be a top priority for the administration,” a White House official announced to the press.

For more on the PTC, see Wind Energy Industry Braces for End of Tax Credit in Green & Clean.

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