A gust of good news

If you're connected to the wind energy business or are looking to get your foot in the door, you're probably thinking about two things:

1. You're tired of cheesy puns in article headlines (like the one above).

2. You are hoping investors start embracing the business again.

For the former, I'm a culprit among all the other business reporters using excessive verbal window dressing to write about this sector. As for the latter, investment trends are blowing in a new direction. (Apologies, again.)

"The money is coming back."

That was Ethan Zindler, head of research at consultant New Energy Finance Ltd., in an interview with The Wall Street Journal. The newspaper today ran a piece on the wind energy industry's resurgence. On the heels of cash for clunkers, a new government grant program takes aim at alternative energy, including wind. Historically, the wind energy business has relied on so-called "production tax credits." But after the financial crash, production tax credits weren't as effective as losses everywhere mounted. So this year, the wind energy business can take advantage of alternative-energy grants that, among other things, pay for up to 30 percent of a wind project. That's big money.

According to the Journal, the grant program has a distinct, important difference from the recently completed cash for clunkers: "Unlike the popular cash-for-clunkers programs, there is no spending cap on the renewable-energy grants, and the government has committed to spending as much as is needed to keep renewable-energy investments flowing."

Such unrestricted help (at least for now) could dramatically affect wind energy's future, considering the industry's history. According to a report from the American Wind Energy Association about the production tax credit (PTC), the sector "has suffered through boom and bust cycles caused by erratic and short-term extensions of the PTC ... At previous times when the credit has lapsed, installations have dropped by as much as 93 percent the following year."

2008 was a good year for wind, but this year the party's been declared over, considering the dealmakers involved. Major wind dealmakers included Lehman Brothers and AIG, according to the Journal, and we know how good those deals turned out to be.

But is the party really over? Judging by recent investment trends, I don't think it is, and this may be a boon for metal fabricators. According to the AWEA, nearly 90 percent of the weight and more than one-third of the value of the modern wind turbine comes from metal components, ranging from enclosures and ladders measured in inches and feet to wind towers measured in football fields.

Earlier this year Matt Garran, director of technical services at Great Lakes WIND Network™, a Cleveland nonprofit, told me he thought the industry was going through a "hiccup" that has allowed "the OEMs to regroup and slow down."

With government-supported investment, the hiccup may have subsided, and the industry may be moving toward one of its strongest upswings yet.

The winds are blowing in a new direction. (Sorry, again.) Stay tuned.