For the last two months, virtually every national television news broadcast has at least mentioned the "fiscal cliff" in one way or another. We have been inundated with stories about how politicians in Washington, D.C. have been trying to hammer out a deal to prevent a series of tax increases and spending cuts that are set to go into effect at midnight tonight.
There has been so much coverage of this topic that the term "fiscal cliff" topped the list of words or phrases people would most like to see banned, released earlier today by Michigan's Lake Superior State University. But, as annoying as it may be to hear those two words repeated over and over again, they carry great significance as you read this, particularly for the wind energy industry.
A tax credit for the construction of wind energy systems – covering roughly 30 percent of the building costs – is among those on the chopping block should we topple over that dreaded cliff later tonight. According to the American Wind Energy Association, economic uncertainty has cost 10,000 jobs over the last three years in this industry, and another 37,000 could be lost if the tax credits are allowed to expire.
The impact on the wind energy sector and the U.S. economy
With the current boom in domestic oil and natural gas production sweeping the United States, the expiration of these tax credits could cripple the wind energy industry's ability to remain competitive. This would also be a harsh blow to the alternative energy technologies sector as a whole, not to mention the environmental concerns related to the controversial hydraulic "fracking" process being used to access fossil fuel reserves in shale rock formations. And, with 37,000 newly unemployed Americans coupled with middle class families paying higher taxes, we could see another recession.
In November, The Huffington Post reported that wind energy companies were anticipating difficult days ahead because of the fiscal cliff. Some began to lay off workers, including military veterans who had received training through federal green jobs programs that help them adjust to civilian life.
"We heard it was coming up, but we weren't sure when," said Andrew Sipres, a military veteran and employee at a Colorado-based wind turbine manufacturing facility. "One day we all showed up, we met in the lunchroom and they told us what was going on. Then one by one they took us into the office."
Sipres and his co-workers are the people building wind turbines, and they are the ones who may lose their jobs. If we have fewer individuals building these systems that suddenly cost 30 percent more to manufacture than they used to, the industry will be in dire straits.
What can be done to save the wind energy industry?
Nearly two weeks ago, CNNMoney reported that the American Wind Energy Association said the industry could survive if the tax credits were phased out over a reasonable time period, rather than disappearing in one fell swoop should fiscal cliff negotiations stall at the eleventh hour.
Association officials told the news source that the wind energy sector will be able to compete with coal and natural gas by 2018 as they bring manufacturing costs down, but only if the tax credits remain through that point. Natural gas plants are currently about 35 percent cheaper to build.
"We need to close that gap," Steven Lockard, chief executive of a Scottsdale, Arizona-based turbine blade manufacturer, told CNNMoney. "Costs have come down 90 percent in the last two decades, but our job is not done yet."
The way to continue to get those costs down is to invest in innovative alternative energy technologies. As new, cutting-edge joining methods for metal are developed, including metal brazing and soldering techniques, the industry can succeed in providing sustainable and affordable power that is safer for the environment than our current alternatives. At midnight tonight, we will find out what the future holds.