According to reports, Wind-turbine makers have seen profit margins wiped out, and the potential end of tax credits in the U.S. will see its “boom-and-bust” market persist, Suzlon Energy Ltd. Chairman Tulsi Tanti said today.
“Today everyone is selling just at cost level,” Tanti said in an interview in Mumbai. “You’re almost getting Chinese prices in the U.S. Nobody is making any margin whether it’s a supplier, a turbine company or a project construction company.”
Tanti’s remarks add to concerns voiced last week by the heads of Vestas Wind Systems A/S and Gamesa Corp. Tecnologica SA, Suzlon’s rivals in Europe, about the health of the world’s second-biggest wind-turbine market. The companies already are coping with slimmer margins caused by cuts to subsidies across Europe and the growth of Chinese competitors led by Sinovel Wind Group Co., which benefit from state funding to expand abroad.
U.S. tax credits, which give an incentive of 2.2 cents per kilowatt-hour of wind power on payments by turbine operators, expire next year. The American Wind Energy Association is lobbying congress to extend the measure. Until that’s done, the market for 2013 “has a question mark over it,” the AWEA said Oct. 25.
“There’s no clarity or visibility after the cutoff date,” Tanti said today. “The U.S. is a boom-and-bust market and that trend will continue.”