Government incentives and strong demand for electricity will stimulate growth.
New York, NY (PRWEB) December 27, 2013
The Wind Power industry is booming. Revenue is expected to increase at an average annual rate of 16.9% to $6.9 billion in the five years to 2013, including anticipated growth of 8.6% in 2013. Favorable government assistance has made this energy source cost competitive with other electricity-generation sources, lifting wind power's share of the total electricity generated in the United States from 0.4% in 2005 to 3.2% in 2012. According to IBISWorld Industry Analyst David Yang, “The industry generates revenue from owning and operating wind farms and selling the energy produced to downstream customers.”
The federal government's investment tax credits and state government mandates for renewable energy have made it attractive for operators to construct wind farms at a breakneck pace. These incentives lower the cost of wind-power generation, ultimately making it more affordable for mandated utilities companies to purchase or invest in renewable energy. Cash credits for renewable energy investment were extended only until December 31, 2011, encouraging companies to open wind farms quickly before the expiration of the cash grant program. The production tax credit, a government-funded incentive that pays producers per unit of energy sold, has also aided this trend. The US Congress recently extended this credit as a part of the American Taxpayer Relief Act, following a brief expiration at the end of 2012.
Over the next five years, stronger economic activity and a focus on energy independence and reducing greenhouse gas emissions will contribute to strong ongoing growth in wind power production. “Combined with favorable government assistance, the industry will ride the high winds as the economy kicks back in gear and electricity demand rises,” says Yang. A push for the creation of offshore wind farms is also expected to aid the Wind Power industry. The first such farm in the United States received federal clearance in August 2012. As a result of these trends, revenue in the Wind Power industry is expected to grow during the five years to 2018.
The Wind Power industry has a medium level of concentration. The largest industry participants are NextEra Energy Resources and Iberdrola Renovables. The level of concentration reflects the industry's rapid growth and rising consolidation. Market share concentration has increased over the past five years as industry players expanded their footprints by constructing wind farms at accelerating rates, taking advantage of tax breaks and looking to meet state demands for alternative energy. Concentration should continue to rise over the next five years, as government incentives continue to be favorable for the industry. Operators will look to boost revenue by acquiring additional assets and building new wind farms to meet increasing demand.
For more information, visit IBISWorld’s Wind Power 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 Power industry industry operates wind farms, which consist of wind-operated turbines that are used to generate electricity.
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.