In its annual market report, GWEC critiques the main markets where local content requirements are active – Brazil, Canada and China. It concludes that local content can work but only when governments offer a stable, long-term, fixed volume policy and clear incentives for wind.
If such demand is absent, higher costs associated with local content rules can put off investors, GWEC said.
The report stated: "Every politician wants to bring a factory to town, but it's just not practical to do it in each case."
Instead, GWEC suggests a middle ground, where local content is promoted through positive incentives schemes such as manufacturing tax credits or a bonus on top of a feed-in tariff for locally sourced components.
The wind industry is split in its views on local content. In December, the World Trade Organisation upheld complaints from Japan, the US and the EU against local content rules in Ontario, Canada.