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Wind energy: Boom sputters as industry tax credit is set to expire

Congress has so far not extended the tax credit for wind energy, resulting in the layoffs of thousands of workers. Communities that a few years ago were elated to attract a promising new industry are left wondering what will the future bring.

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The sun rises behind windmills at a wind farm in Palm Springs, California in 2011.

Lucy Nicholson/Reuters

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Alex Derr had a new house and a son on the way when he landed a coveted job building massive fiberglass wind-turbine blades at a new factory in Fort Madison, Iowa. With well-paid work in a growing industry, he seemed to have it made.

“Having a new family, I thought it was great,” says Mr. Derr, who is in his 20s. “I thought I was getting hired for a career.”

But his career in the wind industry came to an abrupt and premature end in October, when the plant where he worked, owned by Siemens Energy, a German company, let go most of its more than 700 workers. Similar layoffs have affected thousands of workers in communities across the United States. The reason: the impending expiration of a federal tax credit for wind energy.

Despite pleas from wind-industry advocates and politicians in important wind-energy states, Congress has so far not extended the tax credit beyond the end of the year. So on the eve of its demise, workers who thought they had snagged a dream job now find themselves once again looking for employment. Communities that a few years ago were elated to attract a promising new industry are left wondering what will the future bring.

“It was a big gut check for us,” says Fort Madison’s mayor, Brad Randolph. “It was like, two steps forward, one step back.”

The federal tax credit has helped to buoy American wind energy since 1992 and, more recently, to spawn a small but growing manufacturing sector. Uncertainty over its future now threatens 37,000 jobs, according to the American Wind Energy Association, a trade group. Some of these are held by the 30,000 workers employed in more than 500 manufacturing facilities, from big plants that assemble large wind-turbine components to smaller suppliers providing gearboxes, bolts, and other parts.

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