Many Jobs May Be Gone With The Wind Energy Credit
The industry depends on a federal subsidy to keep it competitive with other forms of electricity. It’s a tax credit wind farms get for the power they produce. That credit expires at the end of the year, and it’s not clear whether Congress will renew it.
The tax credit was initially created to encourage wind energy, since it is a clean and secure source of electricity. But these days the argument is all about jobs.
Tens of thousands of jobs depend on the tax credit, and it’s not just the people who build wind farms. In recent years, wind turbine manufacturers have taken root in the United States. Now, 60 percent of those components are manufactured here, according to the American Wind Energy Association.
Take, for example, the Gamesa plant, which sprung up six years ago in a forlorn corner of Pennsylvania. Fairless Hills was once home to a massive U.S. Steel plant, with blast furnaces and millworks. Most of those facilities are now gone, along with many industrial jobs.
But Gamesa bought a cavernous building that U.S. Steel had abandoned, and turned it into a wind turbine manufacturing facility.
Plant manager Tom Bell leads us onto the production floor, which is more than long enough to host a football field. Red, orange and yellow cranes travel across the ceiling high overhead. They hoist pieces weighing up to 70 tons. This is literally a revival of heavy industry.
Workers are assembling the hearts of wind turbines, called nacelles. Those include a gear box, generator, transformers and wiring mounted on hefty pieces of steel and swathed in a fiberglass cover. The final product is hoisted on a rail car and set outside until it’s shipped off to a wind farm somewhere.
Every day another nacelle rolls off the line. Every year the plant picks up the pace to produce them faster and more efficiently. A clock on the wall ticks down from 7 hours and 30 minutes, to keep workers on pace.
Bell says 175 people work here, including some who worked here when it was a steel plant.
Luis Figueroa was a successful general contractor until the recession hit in 2008.
“I definitely took a hit with my business,” says the Puerto Rico-born supervisor. “I wasn’t able to provide for my family the way I was in prior years. So I came in and applied. And I got the opportunity to work with the team.
Manufacturing jobs like this one, with good wages and benefits, are hard to come by.
“It’s tough to find anything out there. I know,” says Ryan Mannerz, who was hired when Gamesa first set up shop here. “My brother-in-law has been unemployed for a little while, and he can’t find anything right now.”
The Decision In Congress: Save Money Or Save Jobs
Gamesa also buys parts from suppliers in the area and across the United States, so it’s not just about the jobs here.
Despite $43 billion in stimulus funds for energy projects, wind power’s growth is slowing.
And that’s exactly the message the wind energy industry is taking to Capitol Hill. An industry-funded study concludes that 37,000 jobs will disappear without the tax credit for wind energy. That’s almost half the jobs in the industry.
When the tax credit last expired in 2003, wind farms took a big hit. But in those days, the wind turbines were largely imported. Now, the domestic manufacturing industry is growing rapidly. And that changes the politics.
“I think the congressmen are getting it now,” says David Rosenberg, a Gamesa vice president. “They understand that there are a lot of jobs involved. And in addition to jobs, there’s also the concern about the loss of technology.”
As the technology improves, wind becomes cheaper. Rosenberg says his company only needs four more years of tax credits, and it will be ready to compete without further federal help.
But opponents of the wind production tax credit say enough is enough.
“We’re $15 trillion in debt,” says Nick Loris at The Heritage Foundation. “We have a robust energy market. And electricity demand and the demand to transport our vehicles back and forth is always going to be there. And I think that profit motive is incentive enough.”
He acknowledges that people will lose jobs if the tax credit goes away. And he also recognizes that wind competes with other subsidized forms of energy. But Loris says you’ve got to start cutting somewhere.
That said, the wind industry is now big enough that it’s also garnering support from groups like the U.S. Chamber of Commerce and the American Farm Bureau Federation. So it’s not clear what Congress will do: Save money or save jobs.