Policy instability can affect the decisions of business leaders, regardless of their industry. With energy policy on the forefront in Washington, D.C., businesses want to know the policy landscape ahead so they can make the right choices today. The same is true for associated service businesses, said Wanda Reder, vice president of power-system services at S&C Electric.
Her company has provided equipment and services for electric-power systems since 1911. In recent years, S&C began turning to renewable energy, particularly wind, as an opportunity for growth, Reder said in an interview at the American Wind Energy Association‘s WINDPOWER 2011 conference in Anaheim, Calif. However, that growth depends on wind-energy companies’ ability to invest in projects — ability that depends on policy.
The wind-energy industry is not able to make long-term plans because federal tax incentives often are renewed yearly and often not until right before they expire. Reder said this affects her company’s business.
“What ends up happening is that … we will see that the pressure to complete projects on time becomes very immense, because they have to get those tax credits [before they expire],” Reder said.
This rush to complete projects can lead to increased costs because of man hours required and other factors, Reder said.
“They may well go back and decide, ‘Now that I roll up the numbers, it doesn’t make sense to move forward.’ You end up with this real herky-jerky kind of reaction in the marketplace if we can’t get visibility of an extension,” she said.