The Central Coast’s fledgling wind energy business could be in big trouble if production tax incentives are allowed to expire at the end of the year.

United Technologies is trying to sell or shut Clipper Windpower, once a shining star of the wind turbine business and the region’s fastest growing company. On May 15, wind project developer Champlin/GEI Energy, announced it was selling several projects to Western Wind of Canada for $20 million in stock.

Matt Riley, CEO of Infinity Wind Power in Santa Barbara, is developing two projects in Kansas that will produce enough power to supply more than 100,000 homes. But he said his pipeline of new projects will likely dive to zero if the production incentives are allowed to sunset.

Riley spoke at a press conference held by U.S. Rep. Lois Capps, a Santa Barbara Democrat and one of 100 members who have asked the House leadership to bring an extension of the production tax credit to a floor vote.
The tax credit provides a subsidy to corporations and banks that finance wind projects, typically reducing the overall cost of power by about 2.7 cents per kilowatt hour.

Including the subsidy, wind power costs roughly as much per kilowatt hour as coal and less than building natural gas plants, making it a very attractive investment, said Riley. “The industry will lose about 37,000 jobs immediately” if the production tax credit is not extended, he said.

“It’s a very dire situation,” said Capps, adding that tax incentives are in place for the oil and gas industries. Riley said a tax credit program for solar power projects has been authorized through 2016.

Although the bill has bipartisan support, it is uncertain whether an extension of the production credits would muster the 60 votes needed in the Senate even if it passed the GOP-controlled house.

The credits have become an on-again, off-again situation that has shackled the wind industry for two decades, with the industry losing 75 percent to 95 percent of its new orders in the year after a production tax expires.

The revolving door subsidies, combined with production problems involving cracked blades, pushed Carpinteria-based Clipper to merge with United Technologies. United Tech executives have said they consider Clipper to be one of their worst acquisitions in recent years and have put the company on the block.