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Recession Slows Wind Power

The U.S. has enough wind power to fuel the equivalent of nearly 9 million homes, up almost 23% from the start of the year, the American Wind Energy Association reported Tuesday.

But the industry will fall short of earlier growth projections for the year, the association says, largely because of last year's financial meltdown. That resulted in "many companies putting projects on hold," says Gabriel Alonso, CEO of Horizon Wind Energy in Houston.

The federal stimulus bill, which has provided about $950 million in cash grants in lieu of tax credits to the wind sector since August, helped bring some of the projects back, Alonso says, "But not all."

The association, in its third-quarter market report, says that the wind industry installed 1,649 megawatts of new power capacity in the third quarter - enough to serve the equivalent of more than 480,000 average households.

Through the first nine months of the year, 5,800 megawatts of new wind capacity have been added, it says. For all of last year, 8,500 megawatts were added.

Despite the stimulus money, it's doubtful that the U.S. will hit or surpass 2008 levels this year, says Elizabeth Salerno, the association's director of industry data and analysis. Before the financial crisis hit, 2009 was expected to be a growth year, she says.

A slowdown in announcements of new facilities to manufacture the equipment to generate wind power has also occurred. At this time last year, the U.S. had 36 newly finished or announced facilities. So far this year, there's been 24, Salerno says.

Lack of financing continues to hamper wind-generation projects, Alonso says, but he sees some improvement. The government's stimulus plan has helped raise lender confidence, he says.

In September, the federal government announced a $47.7 million grant for Horizon. It had one of 15 U.S. wind projects to get stimulus funds.

That money enabled Horizon to start construction in September on the second phase of a wind farm in Indiana. That project wasn't scheduled to begin until next year - and may not have begun then - had financing remained tight, Alonso says.

He says it'll be summer before a full rebound, assuming the economy continues to recover.

One big question is whether U.S. lawmakers will pass a national standard calling for increased use of renewable energy, such as wind and solar. If so, Salerno says, that would send a signal to the market that demand for such power would increase, spurring investment.

Two dozen states have set their own standards to increase use of renewable energy. As of the end of last year, wind accounted for 1.25% of the U.S. electricity generation, the association says.

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