The key findings in 2008 Wind Technologies Market Report include:

To date, all wind power installations in the US have been onshore, though there are now 11 “advanced-stage” offshore wind project proposals totaling more than 2,000 MW in various phases of development in US Waters.

The wind power contribution of 42% in 2008 is up from 35% in 2007, 18% in 2006, 12% in 2005, and less than 4% from 2000 through 2004.

Annual Capacity Growth and Overtook Germany’s Lead in Cumulative Wind Capacity: At the end of 2008, cumulative wind power capacity in the US stood at 25,369 MW, ahead of Germany’s 23,933 MW.

Texas Exceeded Other States in Annual Capacity Growth: Texas state stood first with 2,671 MW installed in 2008 alone and the next highest being Iowa with 1,600 MW and Minnesota with 456 MW).

Data from Interconnection Queues Demonstrate that Large Amount of Wind Capacity Is Under Development: At the end of 2008, even after reforms to reduce the number of speculative projects in their queues, there were nearly 300 GW of wind power capacity within the twelve transmission interconnection queues reviewed for this report – more than 11 times the installed wind capacity in the US at the end of 2008. This wind capacity represented more than half of all generating capacity within these queues at that time, and was more than twice as much capacity as the next-largest resource in these queues (natural gas). Though clearly not all of this capacity will ultimately be built as planned, it nevertheless demonstrates the high level of developer interest in wind power.

The turbine manufacturer in the US Market, GE Wind stood first that captured 43% of US market share (by capacity) in 2008, followed by Vestas Wind Systems A/S (13%), Siemens AG (9%), Suzlon Energy Limited (9%), Gamesa Corporacion Tecnologica, S.A (7%), Clipper Windpower Plc (7%), and Mitsubishi Corporation (6%). A number of international turbine manufacturers entered the US market for the first time with installations in 2008, including Acciona Energy SA (5%), REpower Systems AG (1%), and Fuhrlander AG, DeWind Inc. (DeWind), a subsidiary of Composite Technology Corporation (CTC), and AWE (<1% combined).

Demand for Wind Encouraged Expansion of US Wind Turbine Manufacturing: The number of utility-scale wind turbine manufacturers assembling nacelles in the US increased from just one in 2004 (GE) to five in 2008 (GE, Gamesa, Clipper, Acciona, CTC/DeWind), with five additional manufacturers publicly announcing the location of future assembly plants. In addition, a considerable number of new component manufacturing facilities in the US were either opened or announced in 2008. As a result of this continued expansion, the American Wind Energy Association (AWEA) estimates that the share of domestically manufactured wind turbine components has grown from less than 30% in 2005 to roughly 50% in 2008. This scale-up is also creating a number of new jobs; AWEA estimates that roughly 8,400 new domestic manufacturing jobs were added in the wind sector in 2008.

Despite a Slight Increase in Average Turbine Size, the Average Size of Wind Projects Decreased in 2008: The average size of wind turbines installed in the United States in 2008 was roughly 1.67 MW, up slightly from 1.65 MW in 2007 and 1.60 MW in 2006. Wind projects installed in 2008 averaged nearly 83 MW, which is below the 120 MW average size for projects built in 2007, but is otherwise larger than in any previous period.

Developer Consolidation Slowed in 2008. At least five significant acquisition or investment transactions involving roughly 19 GW of in-development wind projects were announced in 2008, well below the 11 transactions and 37 GW in 2007, and the 12 transactions and 34 GW in 2006. The slowdown in consolidation in 2008 may be a reflection of the financial crisis, as well as the simple fact that many of the prime targets for investment and/or acquisition had already been acquired in earlier years.

The Global Credit Crisis Caught Up With the Wind Sector in 2008: The unfolding financial crisis caused the outright demise of several prominent tax equity investors in wind projects (e.g., Lehman Brothers and Wachovia), and led to the general exodus of many others, such that only a handful of tax equity investors remained active (and on less-favorable terms) at the end of 2008. As a result, tax equity investment in the US wind market actually declined in 2008, despite the record-shattering growth in installed capacity. Other sources of finance were also hit hard in 2008 – e.g., bank lending reportedly ground to a halt in late 2008. Spurred by a number of federal policy changes as well as a general thawing of credit, conditions appear to be improving somewhat as of mid-2009.

Though IPP Project Ownership Remained Dominant, Utility Ownership Expanded: Private independent power producers (IPPs) own 79% of all new wind capacity installed in the US in 2008, and 83% of cumulative capacity. In a continuation of the trend begun several years ago, however, 19% of total wind additions in 2008 are owned by electric utilities, who now own 15% of cumulative wind capacity in the US.

Though Long-Term Contracted Sales to Utilities Remained the Most Common Off-Take Arrangement, Merchant Plants Were Efficient in 2008: Investor-owned utilities continued to be significant purchasers of wind power, with 33% of new 2008 capacity and 47% of cumulative capacity selling power to these utilities under long-term contract. In what has been a growing trend, the owners of 43% of the wind power capacity added in 2008(primarily in Texas, New York, and several mid-Atlantic and Midwestern states) are accepting some merchant risk, bringing merchant/quasi-merchant ownership to 23% of total cumulative US wind capacity.

Upward Pressure on Wind Power Prices Continued in 2008: The capacity-weighted average 2008 sales price for power and renewable energy certificates from projects in the sample built in 2008 was roughly $51.5/MWh (in 2008 dollars), up from an average of $43.2/MWh for the sample of projects built in 2007, and $20.6/MWh higher than the average of $30.9/MWh among projects built at the low point in 2002 and 2003. Among projects in the sample, those in Texas and the Heartland have the lowest prices on average, while those in the East and New England have the highest prices.

Wind Remained Competitive in Wholesale Power Markets in 2008, but 2009 Is Likely To Be More Challenging: Despite moving higher in 2008, average wind power prices remained at or below the low end of the wholesale power price range. In other words, rising wholesale power prices through 2008 have, to a degree, mitigated the impact of rising wind power prices on wind’s competitive position. With wholesale prices plummeting at the end of 2008 and into 2009, however, the economic position of wind in the near- to medium-term has become more challenging.

Installed Project Costs Continued to Rise in 2008, After a Long Period of Decline: Among a sample of 72% of all wind capacity installed in 2008, reported installed costs had a capacity-weighted average of $1,915/kW. This average is up $190/kW (11%) from the weighted-average cost of installed projects in 2007, and is up $630/kW (49%) from the average cost of projects installed from 2001 through 2004. The average reported cost from a sample of more than 3,600 MW of projects likely to be built in 2009 is $2,120/kW, or $205/kW higher than for projects completed in 2008.

After Increasing Dramatically in Recent Years, Turbine Prices Showed Signs of Easing in Late 2008: Since hitting a low point of roughly $700/kW in the 2000-2002 period, turbine prices have increased by approximately $700/kW (100%), on average, through 2008. Between 2007 and 2008, capacity-weighted average turbine prices increased by roughly $90/kW (7%), from $1,270/kW to $1,360/kW.