photo: Todd Woody
As President Barack Obama embraced renewable energy in his inaugural speech Tuesday, Clipper Windpower laid off 90 employees – about 11% of its workforce – as the global financial crisis throws a spanner in the once-booming wind industry.
The Carpinteria, Calif.-based turbine maker has seen business slow as customers delay existing orders and put off new ones because they cannot obtain financing for wind farms, Clipper CEO Doug Pertz told Green Wombat.
“In the short-term, the impact to Clipper is a reduction in 2009 turbine production,” he said. “We know that 2009 will be a challenging year, however, remain optimistic that this economic situation is temporary. We trust that the new Obama administration will, in the not-too-distant future, enact policy to enable better financing options for wind energy projects and aggressively promote the growth of renewable energy development.”
Clipper is one of only two U.S.-owned turbine makers – the other being General Electric (GE) – in an industry dominated by European manufacturers and wind farm developers.
Like their counterparts in the solar industry – which also has been shedding workers in recent weeks – wind companies depend on tax incentives to lure investors. But with traditional investment banks all but extinct on Wall Street and other investors hoarding their cash, there’s been little appetite of late for investing in so-called tax equity partnerships to provide funding for massive wind farms or solar power plants.
Pertz said Clipper’s production is down 20% from the 750 megawatts worth of turbines it manufactured in 2008 and that he expects double-digit declines for 2009. “Customers with large balance sheets are being much more conservative and smaller independent wind developers are seeing that it is much more difficult to obtain tax-equity financing,” he noted.
Wind and solar industry lobbyists are pushing Congress to make the investment tax credit and the production tax credit refundable so those companies that don’t have tax liabilities can trade the credits for cash that can be used to finance renewable energy projects.
Founded in 2001 by wind industry veteran James Dehlsen – his first wind company is now owned by GE – Clipper makes a 2.5-megawatt turbine called the Liberty at its Cedar Rapids, Iowa, factory that powers wind farms built by FPL (FPL) and BP (BP). Other customers include Queen Elizabeth II, who bought the prototype of a 10-megawatt offshore turbine being developed by Clipper in the U.K.
One bright spot for the wind industry, said Pertz, is an expected move by well-capitalized utilities to take ownership stakes in wind farms if a national standard is enacted requiring them to obtain a certain percentage of their electricity from renewable sources.
Green Wombat 