Monday, January 28, 2008

Steady Tailwind

The American Wind Energy Association (AWEA) reports that wind blew it out this year: increasing total installed capacity by a record 45 percent and adding 5,244 megawatts (more than all the wind in Texas alone). What's more, the supply chain is thickening: at least fourteen new manufacturing facilities opened or were anounced in 2007. There's tangible evidence in Texas: blades manufactured by GE in Gainesville, stacked in the yard and visible from Interstate 35, and towers manufactured by Trinity Structural Towers, further south and also visible from Interstate 35.

The scourge of this effort is the intermittent Production Tax Credit, set to expire again this year. Here's a graph from AWEA that paints a pretty crisp picture:

What would the graph look like if the Production Tax Credit were enacted to accomodate a longer business horizon, say ten or twenty years?