US Wind Power Grows 31% in Q4, 17% in 2011, but Expiring Production Tax Credit Threatens Future Gains

US wind power installations continued strong to close out 2011. More than 3.4 gigawatts (GW) of clean, renewable wind power capacity were installed in Q4, bringing 2011’s total to 6.81 GW, a 31% year-over-year increase. Looking forward to 2012, more than 8.3 GW of capacity are under construction across 31 states and Puerto Rico, the American Wind Energy Association (AWEA) has reported.

2011’s additional wind power capacity brings total US wind power capacity to 46.919 GW. Cumulative capacity increased 17% from 2010. Wind turbines from 23 different manufacturers were installed across projects in 30 states in 2011.

“This shows what wind power is capable of: building new projects, powering local economies and creating jobs,” Denise Bode, the AWEA’s CEO stated in a press release. “Traditional tax incentives are working. This tremendous activity is being driven by the federal Production Tax Credit (PTC) – which leveraged an average of more than $16 billion a year in private investment over the last several years and supported tens of thousands of manufacturing jobs.”

US Wind Energy Capacity, Year-End 2011

With 20% of the state’s electricity supply coming from wind, South Dakota joined Iowa as the states receiving the highest percentage of their electricity from wind, according to the AWEA.

In terms of states where wind power capacity grew fastest, Ohio topped the list, with a 929% increase. Vermont (625%), Massachusetts (152%), Michigan (130%), and Idaho (75%) rounded out the Top 5.

For the year, California lead the 2011 state-by-state installed wind power capacity rankings with 921.3 MW. Illinois (692.5 MW), Iowa (646.7 MW), Minnesota (541.9 MW), and Oklahoma (525 MW) completed the Top 5 list.

Growth is expected to continue in 2012, though the looming expiration of the wind power Production Tax Credit (PTC) is casting something of a pall over the fast-growing industry. More than 100 wind projects in 31 states and Puerto Rico are under construction at present. New projects with a total capacity of nearly 3.5 GW broke ground in Q4, bringing the annual total of projects under construction to 8.32 GW.

Regionally, more wind projects are under construction in the Midwest and Plains than any of the other nine continental US regions tracked by the AWEA. More wind projects are under construction in Kansas than in any other US state or territory. Across a second tier, construction of wind projects is comparatively high in the Northwest, Texas, and Mid-Atlantic.

Dark Cloud Moving In

Dark clouds loom over the US wind energy industry nonetheless, as the wind power PTC is due to expire at the end of 2012, Bode noted.

“In hard economic times we’re creating jobs and delivering clean, affordable electricity. But we will lose all these consumer benefits and a brand new, growing manufacturing sector if Congress allows the Production Tax Credit to expire. Businesses need certainty. That is why it is urgent that Congress extend the PTC now, before the end of the first quarter, or risk losing a bright new manufacturing sector to foreign countries.”

Job creation in the wind power industry would be cut in half should the PTC expire, according to a recent study by Navigant Consulting, which translates into the loss of 37,000 US jobs and a 1/3 cut to US wind manufacturing jobs. Private investment in the sector would drop nearly 2/3. In contrast, extending the PTC would allow the wind industry to add almost 100,000 American jobs over four years, as well as keep pace to support more than 500,000 American jobs by 2030, Navigant concluded.

The AWEA’s “Save USA Wind Jobs” website illustrates, in detail, how Congress’ decision to alternate between allowing the wind power PTC to expire and extending it has lead to cycles of boom-and-bust in the US industry.

A presentation of the AWEA’s “U.S. Wind Industry Fourth Quarter Market Report” is available on the AWEA website.