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

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The cuts in the wind industry have concluded a strange year of both glut and dearth for the industry and its workers. With the tax credit scheduled to expire, wind-energy developers have been racing to complete new projects. By the end of this month, in fact, they are set to have installed more than twice the new capacity that had been expected at the start of the year, according to the US Energy Information Administration. Half this new capacity is expected to come on line this month.

For workers, this has meant going from too much work to too little. At the Siemens factory in Fort Madison, employees worked seven days a week for much of the spring and summer, rushing to complete orders. “We worked ridiculous hours,” says Derr, who was working overtime until a week before his job disappeared.

In Colorado, Martha Wyrsch, president of Vestas-American Wind Technology Inc. until recently, described 2012 as the firm’s “busiest year ever,” supplying turbines to more than 20 new wind farms. Still, the parent company, Vestas Wind Systems in Denmark, let go hundreds of workers at four manufacturing plants in Colorado that build and assemble wind turbines.

These layoffs, plus the relocation of some workers, reduced the Vestas workforce from more than 1,700 to about 1,100. Earlier this month, the company also announced it would cut the hours of its remaining workers from 40 to 32 hours a week, beginning next month.

The year’s swings reflect earlier ups and downs in an industry. Over the past two decades, wind energy has grown substantially, thanks in part to technological advances. Total US capacity has risen from less than 1.5 gigawatts in 1992 to 47 gigawatts at the end of 2011. But this rise has been vulnerable to uncertainty over the federal tax credit, which now stands at 2.2 cents per kilowatt-hour produced.

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