RSS Feed

Small Wind Picks Up Even as Economy Turns Down

Posted on

Small Wind Picks Up Even as Economy Turns Down

How did the U.S. small wind turbine industry continue to dominate the world market throughout the recession?
by By Ron Stimmel, AWEA

Washington, DC, United States –
The number of Americans generating their own electricity with small-scale wind turbines (those with rated capacities of 100 kilowatts and under) increased by just under 10,000 last year despite an economic downturn that impacted the heart of the small wind market: homeowners and small-business owners.

Last year the U.S. small wind market grew 15% with 20.3 megawatts (MW) of new installed capacity, pushing the industry past the milestone of 100 MW in total capacity. Remarkably, half of these sales came within the last three years for an industry that has been around for more than 80. More remarkable still, for much of these three years the world’s economy crippled the finances of much of the industry’s primary consumers. How did this growth happen?

Credit a cocktail of new and improved federal and state policies, optimistic equity investors, and determined consumers.

Sound Investments

The 2009 American Recovery and Reinvestment Act (also known as the economic stimulus bill) expanded the federal investment tax credit for small wind turbines, allowing consumers to take fully 30% of the total cost of a small wind system as a tax credit. These few short lines of text breathed new life into a U.S.-born industry, and just in time to help stave off the effects of the flagging economy.

A growing number of states also offer incentives to help consumers overcome the still-steep cost hurdle of owning a turbine, which for a homeowner can range from $10,000 to $60,000. Governments at all levels are recognizing small wind’s economic potential and are paying closer attention. New Jersey, for example, this year joined eight other states (CA, WI, DE, VT, NV, MI, OR, and NH) in streamlining small-wind permitting procedures. Many industry members have come to view streamlined permitting as the single largest factor in the small wind market’s growth.

But government is not the only actor. Over the past five years an infusion of private equity investment of $250 million into 20 manufacturers worldwide (most of them U.S.-based) provided companies with the capital to ramp up production to meet a strong demand. Of that $250 million, $80 million was pumped into manufacturers during the economic gloom of 2009.

According to a 2010 survey by AWEA, these manufacturers were able to parlay this investment into sales. Even many of the companies without equity funding were able to sell more turbines than in 2008.

Consumers: The Ultimate Investors

Of course, the ultimate investor is the consumer, who has been relentless in seeking ways to cut electricity bills, become “personally energy-independent” and fight global warming in a tangible way. To 30,000 of these pioneers over the past three years, the solution has been owning a small wind turbine. In just a short amount of time, the base of small-wind consumers has diversified, evolving from green-hearted environmentalists and farmers to Home Depots and suburbanites. One consumer trait, however, has remained constant over the past 80 years: Americans buy from American companies, which dominate the global market.

Just 10 years ago no more than 50 companies in the world manufactured small wind systems. Today, 26 countries are home to more than 250 manufacturers, of which 95 are based in the U.S., and foreign companies are looking to position their operations on economically fertile American soil. In fact, 95% of all small wind turbines sold in the U.S. last year were made by U.S. manufacturers. The vast majority of these 95 U.S. companies are in start-up phase, but the leaders command roughly half the world’s market share.

Can this growth be sustained? Can small wind keep up with price-plummeting solar photovoltaic technology? Small-wind lags behind photovoltaics by around 10 years, in terms of U.S. sales volumes, but that may allow small wind to learn from solar’s growing pains. The annual 2010 AWEA Small Wind Turbine Global Market Study aims to address these and other questions about the market and can be downloaded here.

Ron Stimmel is manager of legislative affairs and small systems at AWEA.

This article first appeared in the June 2010 issue of Windletter and was republished with permission from the American Wind Energy Association (AWEA).

http://www.renewableenergyworld.com/rea/news/article/2010/06/small-wind-picks-up-even-as-economy-turns-down?cmpid=WindNL-Thursday-July1-2010

Copyright © 1999-2010 RenewableEnergyWorld.com
All rights reserved.

Advertisements

About pfiddle

Fiddle teacher - mostly Irish trad. Fiddle, mandolin and concertina. Eco-warrior, won E.U. Green Flower Award for Eco Accommodation. Also Irish (Gold) GHA. Green Hospitality Award. Mad keen on self-build - especially straw-bale and cob. 55 with a full head of (slightly) graying hair. No tattoos or piercings. Fond of animals - but legally so. Fond of food - I eat nothing else. Vegetarian by choice, Irish by the grace of birth, Munster by force of (rugby) arms.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: