Is Wind Power Ready to Move on Without Taxpayers' Help?

The hits just keep on coming for the wind sector, and that should further highlight the growth potential for this sector with investors. For years, critics of renewable energy in general have said that the sector needs to stand on its own two feet and not rely on government subsidies. Thanks to advances in materials and technologies, the wind sector is showing signs that it is growing up, a bit smarter and ready to take on natural gas.

In recent weeks I've pointed out that despite the wind production tax credit (PTC) set to expire at year-end, companies like Italy's Enel Green Power (NASDAQOTH: ELPSF  ) and Germany's Siemens (NASDAQOTH: SIEGY  ) are moving forward with wind projects and innovative turbine technology here in the U.S. In fact, Siemens recently announced it is the supplier of the largest onshore wind turbine deal in the world (448 turbines), an order from Warren Buffett's MidAmerican Energy to be located in Iowa; according to the company's website, Siemens "has nearly 5,000 wind turbines installed at wind farms throughout the U.S., including Hawaii, Iowa, Kansas, Nevada, North Dakota, Oregon, Pennsylvania, Texas and Washington State."

Now Siemens is back in the news with plans to provide 3.5 megawatt offshore wind turbines for the 130-turbine Cape Wind Project. Additionally Siemens will be providing maintenance on the turbines for 15 years, so it's obvious the move to support wind is a long-term affair even without PTCs. Continued positive momentum for wind investment should bode well for turbine makers such as General Electric (NYSE: GE  )  and Emerson Electric (NYSE: EMR  ) , the parent of SSB Wind Systems. I'm also a fan of American Superconductor because they are making the brains of the wind turbines. Additionally, since rare earth materials are being more widely integrated into blade technology, investors may want to keep Molycorp (NASDAQOTH: MCPIQ  ) on the radar as well. 

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  • Report this Comment On January 06, 2014, at 11:27 AM, foolingaround wrote:

    Remove the tax benefits that are still given to oil, coal, nuclear, and corn and push it all toward wind and solar.

    See how fast we can get out from under Exxon and the like.

  • Report this Comment On January 06, 2014, at 1:02 PM, Argyll12 wrote:

    The Buffett deal and the Cape Wind deal were finalized before January 1 so they will still get the production tax credit. It does mean there will be wind turbine production for a couple years to satisfy these contracts but it negates the thesis of the article that wind power is moving ahead without the PTC.

    There have been no new announcements since eligibility for PTC expired.

  • Report this Comment On January 07, 2014, at 8:13 PM, LisaLinowes wrote:

    All of the projects cited in your essay are expected to be eligible for the wind PTC or ITC. They rushed to start construction in 2012 so as not to be locked out of the subsidies. Hence, the proof of wind reaching a point of standing on its own is just not there.

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John Licata

John Licata is the Founder & Chief Energy Strategist of Blue Phoenix Inc. You can follow John on Twitter @bluephoenixinc

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