In just over one month, wind manufacturers in the U.S. have announced layoffs of more than 1,130 workers around the country. The layoffs come in states such as Colorado, Florida, and Iowa that are considered “battlegrounds” in national elections.
Every company shedding employees has blamed the looming expiration of the production tax credit for wind, which is set to lapse at the end of this year.
The latest announcement comes from LM Wind Power, a manufacturer based in North Dakota. The company said yesterday that it will lay off lay off 345 workers because of lagging demand for product. The company also cited the production tax credit, which Congress has failed to extend past 2012.
“It is important to emphasize that the challenging situation in the U.S. wind market is not specific to LM Wind Power, nor to Grand Forks manufacturing facilities,” said the company in an announcement. “The whole sector is affected.”
So far this year, companies in Arkansas, Colorado, Florida, Iowa, Kansas, North Dakota, Ohio, and Pennsylvania have all cancelled projects or laid off workers. In the last month alone, more than 1,334 manufacturing workers have lost their jobs. That tally comes from individual announcements made by companies since late August.
The world’s largest wind manufacturer, Vestas Wind, says it may lay off 1,600 American workers in the next year if the production tax credit is not extended. That temporary credit offers owners of wind farms 2.2 cents for every kilowatt-hour of wind generated. The American Wind Energy Association says the credit has helped raise $20 billion in private investment over the last five years, supporting 75,000 jobs.
However, according to analysis from a prominent consulting firm, the wind industry could shed up to 37,000 jobs if the wind tax credit is not extended past 2012.
As the layoffs continue, extension of the credit has become a major issue in the presidential campaign. President Obama wants to extend the credit; Republican challenger Mitt Romney wants to end it. Romney’s stance has raised major concerns from fellow Republicans who live in states where wind has been a major economic driver. According to the American Wind Energy Association, 81 percent of wind projects are installed in Republican districts.
Some voters are also saying that wind will play a role in how they cast their votes in the November elections.
The fight over wind credits has also uncovered major contradictions in national energy policy. While Congress continues to stall on extending the temporary production tax credit, many politicians opposed to federal wind investments continue to support permanent tax credits for the fossil fuel industry.
Earlier this month, 47 House Republicans sent a letter to House Speaker John Boehner (who’s home state supports more than 5,000 wind jobs) asking him to kill the production tax credit for wind. Out of the 47 Republicans calling for an end the wind investments, 46 voted last year against closing tax loopholes that let oil companies collect $4 billion in annual government support.