Reversing Winds: America's Rediscovery of Manufacturing

[jpak]

http://www.renewableenergyworld.com/rea/news/story?id=52729

Over the past three years, the U.S. wind industry has enjoyed a relatively stable policy environment. The federal production tax credit (PTC), the primary economic driver for wind, has been in place without interruption since August 2005 -- after being extended for two years in the energy policy act of 2005, and extended for one additional year (through 2008) at the end of 2006. In addition, more than 10 additional state renewable energy standard (RES) programs have been put into place, bringing the total number of states with an RES to 26 plus the District of Columbia. During that time, total wind capacity grew by 150% and the annual market size more than doubled.

U.S. manufacturers previously unfamiliar with renewables are finding a demand for their existing output (e.g., bearings) in the wind industry while other companies are tweaking their products and retooling their facilities to serve the wind industry and take advantage of this growing market.
It is no coincidence that over the same period, the U.S. found its stride — in this case, that stride being a rapid clip — in expanding domestic manufacturing capacity for wind power components. Dozens of new manufacturing facilities serving the wind industry have been brought online across the U.S. the last few years.

Three years, however, is not sufficient time for any industry to build an optimal long-term business plan; it is merely enough time to offer the U.S. a taste of the manufacturing boom that the wind industry would spur with truly longterm and stable policy. In spite of this growth, manufacturing expansion is still hindered by the lack of policy stability holding back wind power; that is, wind power manufacturing's growth rate is falling short of its potential — and what the industry ultimately desires.

With just three short years of policy stability since the production tax credit was extended in the Energy Policy Act of 2005, the wind industry has managed to turn the offshoring tides, bringing manufacturing activity back to the U.S. Historically, wind industry manufacturing has been dominated by such European countries as Germany, Denmark, and Spain, which export more than 50% of their manufacturing output. Prior to 2005 the U.S. drew minimal interest as a manufacturing location from the global wind industry thanks to policy instability, forcing the U.S. to import 70% or more of the major components for wind turbines destined for this market.

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