Bill Opalka | Sep 14, 2011

The U.S. wind industry continued a recovery from the depths of last year. Is it enough? The industry’s trade association is looking ahead and doesn’t like what it sees.

The second quarter saw 1,033 megawatts added, bringing the first half 2011 total to 2,151 megawatts. There were only 1,250 megawatts added during the same time in 2010.

Once again, the American Wind Energy Association (AWEA) used the occasion to plead for an extension of a policy tool, the production tax credit. That’s expiring at the end of next year, so what are the chances of quick action, 17 months in advance?

Interesting, yet, was no mention of the conversion of the tax credit to a cash grant, which rescued the industry when the credit markets dried up in 2009. The economic stimulus got wind through 2009, with 10,000 megawatts added. Additional capacity was cut in half last year.

So the policy driver that’s most important now is the rush to take advantage of the cash grants before they expire at the end of December, not the PTC that runs through 2012, it says here.

Given the recent gridlock in Washington (If gridlock was the usual description of the past few years in the nation’s capital, what could possibly describe what happened during the past month or two? Just asking.)

Meanwhile, the rest of this year holds some promise.

An additional 7,354 megawatts of new capacity was under construction by July 1, more than at any time since the third quarter of 2008. The U.S. industry during the second quarter installed 1,033 megawatts of electrical generating capacity versus 709 megawatts during the same period last year, up 46 percent for the same quarter last year.

Over 2,500 megawatts of new construction were started during the second quarter, almost three times more new construction than began during the first quarter of the year.

Beyond this year is another matter.

Project activity and orders for 2013 and beyond are scant because of the lack of a predictable business environment, causing layoffs and even bankruptcies in American manufacturing plants and the supply chain, said AWEA.

Ironically, because of the Production Tax Credit and market stability over the past five years, domestic content in the U.S. industry reached a record high of 60 percent through 2010, according to a recent Department of Energy report.

“Clearly Congress cannot take for granted all the wind energy manufacturing and construction jobs that have been a bright spot through the recession,” said Denise Bode, CEO of AWEA.

The U.S. wind industry now totals 42,432 megawatts of cumulative wind capacity, led by Texas with more than a fourth of the total. But what happens if Texas growth slows down? What happens without policy support?

The industry can get through 2011 and probably 2012, but then it’s anybody’s guess.