The federal government production tax credit is set to expire in December 2013, devastating US wind capacity growth.
Los Angeles, CA (PRWEB) October 11, 2013
The Wind Turbine Manufacturing industry experienced dramatic declines over the past five years, underpinned by uncertainties regarding the federal government production tax credit (PTC). In 2009, the US government passed the American Recovery and Reinvestment Act, which established incentives for renewable energy development; state governments also implemented favorable clean energy policies. “These policies made wind power more attractive to utilities and independent power generators,” according to IBISWorld Industry Analyst David Yang. As such, wind turbine manufacturers experienced steady demand during the recession. However, industry revenue is anticipated to fall 62.5% to $5.6 billion in 2013 due to uncertainties regarding the extension of the PTC. As such, IBISWorld expects industry revenue to fall at an annualized rate of 17.0% over the five years to 2013.
The industry experienced a sharp decline in revenue in 2010 due to prolonged economic malaise and dismal investor confidence. Although the PTC and other tax incentives were active over the year, wind power projects attracted minimal investor interest. The Advanced Energy Manufacturing Tax Credit also expired over the year, making it more expensive to open turbine-manufacturing facilities. As a result, revenue fell 40.5% over 2010. In 2012, industry revenue grew 71.4% due to concerns regarding PTC extension. The PTC was scheduled to expire in 2012, which provided an incentive for downstream firms to construct wind farms in 2012 to take advantage of the tax credit. The PTC was extended in early 2013, but downstream firms were unable to budget for wind power projects due to uncertainties regarding the PTC extension. “Revenue is expected to fall sharply over the year and industry profit margins are anticipated to follow suit,” says Yang.
The Wind Turbine Manufacturing industry is expected to decline over the next five years. The PTC is set to expire in December 2013, and US wind capacity growth will likely stall. The 2013 PTC extension allowed any projects that began construction over the year to claim the tax credit. As such, wind power projects started in 2013 will continue through 2014, bolstering demand for wind turbines over the year.
For more information, visit IBISWorld’s Wind Turbine Manufacturing in the US industry report 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
The Wind Turbine Manufacturing industry manufactures wind turbine blades, towers, generators and related parts. Industry firms also provide maintenance and support services for installed wind turbines.
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.