By Greentech Lead Team: The wind turbine manufacturing
industry revenue is likely to decline at an average annual rate of 0.2 percent
to $6.3 billion in the five years to 2012.
One of the main reasons for marginal decline during the
five years is credit crunch. The recession has led to a decline in sales during
2010, as customers ordered fewer turbines and factories were under capacity.
However, revenue is estimated to grow by 2.5 percent from
2011 to 2012.
IBISWorld forecasts that in 2012, the four largest
players in the wind turbine manufacturing industry will collectively account for
45.9 percent of industry revenue, with the largest player, General Electric,
comprising 38.6 percent of industry revenue. Market share has increased as GE
has acquired small manufacturers to increase its footprint in the industry.
Favorable incentives will still drive industry revenue
growth over the period, providing tax credits and incentives for the industry’s
customer to put together wind power projects.
“A drop in business investment and a dearth of available
financing during the recession hampered industry revenue. Additionally, the
advanced energy manufacturing tax credit expired in 2010, making it more
expensive to open turbine manufacturing facilities, which weighed on industry
revenue during the period following 2010. Nevertheless, other favorable
government incentives (other than the manufacturing tax credit) have supported
the industry over the period as its customers’ increasingly put together wind
power projects,” said IBISWorld industry analyst Justin Molavi.
In response to the recession, the US government passed
American Recovery and Reinvestment Act (ARRA), establishing incentives for
Industry players increasingly set up shop in response to
these incentives, adding to the industry’s strength. State renewable portfolio
standards (RPS), which mandate renewable energy generation goals, have created
strong markets for renewable energy producers, resulting in greater demand for
wind turbines. Despite the help that these incentives have provided, one
incentive, the production tax credit (PTC), is set to expire at the end of
2012. If not extended, the industry may experience a fall in demand for
“Despite the possible expiration of the PTC, demand for
wind turbines will likely continue, on the back of other favorable incentives
and strong interest in sustainable energy. Increased interest in offshore wind
will also drive demand for turbines higher, as offshore wind farms continues to
entice wind power developers. However, the uncertainty in regard to the costs
of wind power will hamper the industry’s growth prospects as other renewable
energy technologies and conventional energy generation sources compete for the
power developer’s attention,” Molavi added.