The push for renewable energy will fuel demand for wind turbines.
Los Angeles, CA (PRWEB) March 04, 2012
Wind Turbine Manufacturing industry revenue has hit a headwind. Over the five years to 2012, the industry is expected to decline at an average of 0.2% annually to $6.3 billion. According to IBISWorld industry analyst Justin Molavi “a sharp drop in business investment and a dearth of available financing during the recession hampered industry revenue. Additionally, the advanced energy manufacturing tax credit expired in 2010, making it more expensive to open turbine manufacturing facilities, which weighed on industry revenue during the period following 2010. Nevertheless, other favorable government incentives (other than the manufacturing tax credit) have supported the industry over the period as its customers' increasingly put together wind power projects.” As a result, revenue is estimated to grow by 2.5% from 2011 to 2012.
Favorable government incentives have helped limit the industry's revenue decline. In response to the recession, the US government passed the American Recovery and Reinvestment Act (ARRA), establishing various incentives for renewable energy. Industry players increasingly set up shop in response to these incentives, adding to the industry's strength. Furthermore, state renewable portfolio standards (RPS), which mandate renewable energy generation goals, have created strong markets for renewable energy producers, resulting in greater demand for wind turbines. Despite the help that these incentives have provided, one incentive, the production tax credit (PTC), is set to expire at the end of 2012. If not extended, the industry may experience a fall in demand for turbines.
The difficulties of 2010 and 2011, which were caused primarily by recessionary aftershocks, will be a thing of the past over the next five years. Molavi says that “despite the possible expiration of the PTC, demand for wind turbines will likely continue, on the back of other favorable incentives and strong interest in sustainable energy. Increased interest in offshore wind will also drive demand for turbines higher, as offshore wind farms continues to entice wind power developers. However, the uncertainty in regard to the costs of wind power will hamper the industry's growth prospects as other renewable energy technologies and conventional energy generation sources compete for the power developer's attention.”
IBISWorld forecasts that in 2012, the four largest players in the Wind Turbine Manufacturing industry will collectively account for 45.9% of industry revenue, with the largest player, General Electric, comprising 38.6% of industry revenue. Market share has increased moderately as GE has acquired small manufacturers to bolster its footprint in the industry. This trend is set to continue as GE continues to increase its stake in the wind industry.
For more information visit IBISWorld’s Wind Turbine Manufacturing in the US industry page
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
Firms in the Wind Turbine Manufacturing industry are primarily engaged in researching, developing and manufacturing wind turbines for residential, industrial and commercial use.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.