So said GE North America wind general manager Andy Holt at AWEA Windpower 2016.
The opening session on day two of AWEA Windpower 2016 in New Orleans featured the large wind turbine manufacturers forum, with speakers from Gamesa, GE, Goldwind Americas, Nordex/Acciona Windpower, Siemens and Vestas.
The extension of the production tax credit (PTC) and its eventual phase out was a major theme of the discussion.
"We need to be humble through the long PTC runway we have, and we need to be paranoid that solar is going to steal our lunch," said Holt.
Turbine makers active in the US expect a rush of orders at the end of this year as developers position themselves to take advantage of their last chance to get the full-value PTC.
The US Internal Revenue Service issued new rules in May that guarantees projects will receive the full-value PTC if they start construction this year and come online within four years.
Even if developers still shepherding earlier-stage projects through the development process are not ready to break ground before the end of 2016, they can still "safe harbour" projects for the full PTC by investing 5% of total project costs. For many, that will mean ordering turbines now for deployment down the road.
"It will be a challenge. In the near term, I see a focus on executing the projects that are already on the books. The next step really is the rush for safe harbour equipment. I think we will see that rush between now and the end of the year," said Mike Revak of Siemens.
"If you qualify now, that sees you up through 2020," Revak added. The US market will provide an unusual amount of certainty for the next four years.
"We've got a runway, we've got some volume. We've got stability. It's what we asked for," said Vestas senior vice president David Hardy.
Even so, a slight 'valley of death' could mark the post-PTC era according to Ed Zaelke, of law firm Akin Gump and a former chair of AWEA's board of directors. "We're continuing to be addicted to our PTC drug," he noted.
Keeping up with the front-loaded demand — because the PTC will diminish over the next four years — will be key in the market until 2020, said panellists.
"[Such a market] can be challenging for an OEM," conceded Scott Baron of Nordex/Acciona Windpower. "We need stability, and to manage our supply chain."
While turbine makers participating on a panel at Windpower 2016 agreed meeting the jump in demand
and working out the logistics of delivery over the next four years would be a challenge, they said they are
prepared.
"We've been able to anticipate growth and anticipate the need for more manufacturing capacity. So I
think we are prepared for a large safe harbour demand and large four-year PTC cycle," said David Hardy,
senior vice-president of sales with Vestas.
Some of the levelised cost of energy gains made by the wind industry in recent years is the result of low commodity prices, leaving it competitively vulnerable should they start rise.
"If steel prices go up significantly, that's going to have a lot more effect on wind than solar," added Vestas' Hardy.
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