"The number-one thing needed is to establish a balanced, well-thought-out national energy policy, including a renewable energy standard that runs for at least ten years out," says Richard Morrison, president and CEO of Molded Fiber Glass, in Kansas.
A renewable energy standard, or renewable electricity standard (RES), is a public policy that requires electricity utilities to source a rising percentage of their power from renewables. More than half of US states have such policies and there is a pressing desire within the wind industry to establish a federal RES for the country. "Doing this will change the uncomfortable, risky situation we now have, in which we're facing making large, long-term investments in an uncertain market environment," says Morrison.
Dan McDevitt, vice-president of supply chain for Nordex USA, agrees. "When I talk with people in Europe, I hear a real concern about whether the US wind market will come back strongly," he says. "A good national energy policy will remove lots of those doubts and give our industry the long-term footing we need to compete against other technologies."
Parity on cost of components
But many agree that there is another important policy step required to develop fully the domestic supply chain, and that is to create parity between US and Asian companies. Complaints are frequently heard that Asian components are being sold in the US for the cost of raw materials.
Causes are traced to currency manipulation of the Yuan - which some economists estimate has created a subsidy of 25-40% - as well as common practices such as loan forgiveness, which enables start-up companies to write off their overhead debt and quote new orders only on variable costs.
"We need the government to level the playing field," explains Joe Simko, president and general manager of Hodge Foundry in Pennsylvania. "If we received economic stimulus money, we would invest to improve our competitiveness, win more business and create jobs on American soil."
This article is a companion piece to 'Opportunity knocks for US suppliers'
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