Gamesa, parent company of a thriving new industry in Cambria County, is hoping Congress renews tax credits for renewable energy companies that make such products as windmills, solar panels and biofuels.
“Gamesa supports a long-term extension of the production tax credit because of the vital role it plays in long-term development,” said Michael Peck, director of media relations.
Gamesa’s $50-million plant in the Cambria County Industrial Park outside Ebensburg makes 141-foot blades for windmills and is sold out on turbine orders until 2010, Peck said.
About $500 million in investment and production tax credits for renewable energy such as wind turbines will expire Dec. 31 unless Congress takes action.
Without that financial incentive, solar and wind power companies say they will reverse planned expansions and, in many cases, cut payrolls and capital investment.
“Gamesa is not directly affected by the tax credit, but indirectly affected as the credit is tied to ownership of the wind farm project. Obviously there is no market to buy wind turbines without a strong market to build wind farms,” Peck said.
“While Gamesa develops wind farms, our business model is to sell them to another owner/operator. Gamesa is a manufacturer and developer, not an operator,” he said.
But with the U.S. wind energy market strong now, and with renewable energy an election issue, alternative energy incentives such as the tax credits are needed, Gamesa officials said.
The American Wind Energy Association is predicting a loss of 76,000 jobs and $11.4 billion in investments if Congress allows the production tax credit to expire. That group predicts Pennsylvania could lose nearly 2,000 jobs by the end of 2009 if these credits are not renewed.
Congress let the credit expire in 2000, 2002 and 2004. In those three years, wind capacity installation dropped between 73 percent and 93 percent each year.
“Companies are mapping out their decisions for future wind projects, and the production tax credit directly affects those decisions,” Peck said.
“With tax credit uncertainty increasing every day, financial lenders are hesitating to provide capital for wind projects. Concurrently, developers rush to complete projects before the expiration, leading to smaller projects and added costs,” he said.