Policy Uncertainty Threatens 1,600 American Wind Jobs at Vestas — and 37,000 Jobs Nationwide

by Richard Caperton

From now until the day Americans vote for president, every single candidate running for office will be talking about one thing: jobs.

But while candidates ramble on about who’s creating and who’s killing jobs, they’re ignoring the simple things that would actually help businesses create jobs – particularly in the crucial clean energy industry.

Exhibit A: Congress’s refusal to extend the production tax credit (PTC) is about to kill tens of thousands of high-paying jobs in the wind industry and is already causing businesses to stall projects, reduce orders and decrease manufacturing activity.

Yesterday, Vestas – a leading manufacturer of wind turbines – announced that it will have to lay off as many as 1,600 workers if Congress raises taxes on wind power by not renewing the PTC. What’s most frustrating is that there’s an easy fix. All Congress has to do is extend the PTC to 2016, as I called for earlier this week, and the whole problem would be avoided.

At a time when so many politicians are making tax issues a key piece of their campaigns, it’s quite ironic that one of the nation’s fastest growing industries is suffering from uncertain tax policy.

Sadly, there’s a lot of history for us to learn from on this issue. As has happened every other time the PTC has expired, wind turbine installations in 2013 will collapse. In fact, the Energy Information Administration currently projects literally zero wind projects for 2013. This chart shows how the PTC expiration has hurt wind in the past and will in the future:

Letting the PTC expire will hurt the entire wind industry, but it’s especially devastating to manufacturers like Vestas. As I wrote in my recent paper, “Good Government Investments in Renewable Energy”:

Unfortunately, we don’t have as many people working in the wind industry as we could. While the wind-manufacturing sector has grown in recent years, it has historically been crippled by the PTC expiring every two years. Manufacturers know that this on-again, off-again cycle for the industry would leave them with virtually no business every other year, so American wind farms use some imported parts

The Vestas announcement is bad news, but it’s not unexpected. In November, a bipartisan group of governors implored Congress to not raise taxes on the wind industry, warning of the economic impact in their states:

Wind-related manufacturing is beginning to slow in our states because the credit has not yet been extended. If Congress pursues a last minute approach to the extension, the anticipated interruption of the credit’s benefits will result in a significant loss of high-paying jobs in a growing sector of the economy.

Navigant, an economic consulting firm, went a step further and put numbers on this tax increase, estimating that not renewing the PTC would kill a whopping 37,000 jobs.

This policy uncertainty isn’t just impacting manufacturers and onshore developers, it’s also holding up offshore wind developers. As we outline in our report on offshore wind tax policy, NRG recently announced that its Bluewater Wind project would not move forward and cited Congressional inaction on the PTC as a key factor.

If Congress doesn’t do something soon, more wind power companies will be forced to follow in Vestas’ footsteps. Instead of just talking about putting people back to work, members of Congress should actually do their jobs to protect American workers.

Richard Caperton is Director of Clean Energy Investment at the Center for American Progress.

2 Responses to Policy Uncertainty Threatens 1,600 American Wind Jobs at Vestas — and 37,000 Jobs Nationwide

  1. sjc_uk says:

    Are you aware of the documentary film “Windfall” that’s been released? I’ve seen a review or two and predict that it will be talking point of the month for all sides of this debate.

  2. Mulga Mumblebrain says:

    The fossil fuel plutomaniacs and their Rightwing political allies are determined to destroy renewable energy, and extract every last cent of money from their polluting ‘assets’. This development is entirely predictable-we’ve seen exactly alike behaviour in Austr-failure-and worse is yet to come. Every new generation of Rightwing ideologues, zealots and stand-over thugs is worse than the one before. Its the ‘Descent of Man’ (New Abridged Edition)through ‘unnatural selection’, with service to the Kochtopus and other psychopathic Gods the sole criterion for unfitness.