Government incentives and strong demand for electricity will stimulate growth
Los Angeles, CA (PRWEB) December 13, 2012
The Wind Power industry is booming. Revenue is expected to increase at an average annual rate of 19.5% to $4.4 billion in the five years to 2012, with anticipated growth of 8.9% in 2012. 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 Austen Sherman, “the industry generates revenue from owning and operating wind farms and selling the energy produced to downstream customers.”
The federal government's production and investment tax credits, and state government mandates for renewable energy, have made it attractive for operators to construct wind farms at a breakneck speed. These incentives lower the cost of wind power generation, and mandated utilities purchase, or invest in, renewable energy. Cash credits for renewable energy investment were extended only until December 31, 2011, encouraging companies in the Wind Power industry to open wind farms quickly before the expiration of the cash grant program. “As a result, industry concentration has increased over the past five years as large companies, such as NextEra Energy and Iberdrola Renovables, have expanded their operations,” says Sherman. This trend has also been aided by the production tax credit, a government-funded incentive that pays producers per unit of energy sold. This credit is set to expire at the end of 2012; however, it has received strong bipartisan support in Congress and, following the recent election, the American Wind Energy Association remains confident the credit will be extended.
Over the next five years, stronger economic activity and a focus on energy independence and reducing greenhouse gas emissions will contribute to ongoing strong 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. 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 strongly during the five years to 2012. For more information, visit IBISWorld’s Wind Power in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry operate 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
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