New report from GlobalData suggests US investment will drive surge in market growth to $81bn peak in 2019, followed by $10bn fall in value after removal of clean energy tax credit
The global market for wind turbines is set for a bumpy ride over the next five years, as analysts predict it will grow to $81.14bn in 2019, before dropping back to $71.21bn in 2020.
The forecasts, published yesterday by research and consulting firm GlobalData, suggest the market growth over the next three years will be powered by falling costs and continued government support for clean energy.
However, the scheduled expiration of US clean energy tax credits in 2020 is expected to prompt a $10bn nosedive in the turbine market as project pipelines dry up.
The US tax credit programme, which was extended by Congress in December 2015, works through a system of degression. According to Swati Gupta, GlobalData’s power analyst, this structure of the scheme will drive a surge of investment in wind power across the US over the next three years ahead of the 2020 cut-off date.
“The production tax credit (PTC0 for wind energy, which pays $23 per MWh, will remain until 2016, followed by incremental reductions in value for the years up to January 2020,” she said in a statement.
“The projects which start construction in 2017 will get 80 per cent of the credit, those that qualify in 2018 will get 60 per cent, and those in 2019 will get 40 per cent. The PTC for wind facilities will be phased out completely if the construction starts after December 31, 2019. Thus, the wind power market is expected to see a huge rush of capacity additions during 2016-2019 to take the benefits of tax credit extensions before they expire.”
However, other countries are expected to maintain a relatively stable growth trajectory over the period, with China expected to account for 26 per cent of the turbine market by 2020, followed by Germany, with 10 per cent.