In case you missed his somber warning, Vestas Wind Systems A/S Chief Executive Officer Ditlev Engel said earlier this month that U.S. wind turbine sales may dry up in 2013 unless lawmakers extend tax credits supporting the market beyond the end of next year.
The production tax credit as it is called, or PTC, provides an incentive of 2.2 cents a kilowatt-hour for electricity from wind applied to operators’ tax bills. In the past, the termination of such policies has shown markets can “disappear,” Engel told Bloomberg in a phone interview.
“Our concern is that if the PTC is not extended, history has shown us that these markets tend to fall off a cliff,” Engel said from the company’s headquarters in Aarhus, Denmark. “We should prepare ourselves for it.”
The expiration of the program would be particularly hard on be Vestas, which is heavily invested with manufacturing plants in neighboring Colorado. The company, along with another industry giant, General Electric, is struggling with falling turbine prices caused by increasing competition from Chinese rivals.
Engel’s comments echo concerns made by Lewis Hay, CEO of Nextera Energy Inc., who said he expected no new wind projects in 2013 and 2014. The American Wind Energy Association is lobbying for congress to extend the tax measure. Until that’s done, the market for 2013 “has a question mark over it,” AWEA Chief Economist Elizabeth Salerno said late last month.