Photo: landhere at www.flickr.com
It’s one thing for a handful of fly-by-night green energy ventures to go belly up.It’s another when two of the largest industrial companies in the world announce that faltering interest in green energy is denting income.
On Friday, GE announced that uncertainty over the federal wind tax credit slowed advanced wind turbine sales, creating an 8 per cent hole in Q3 revenues for the company’s energy division. Orders fell 69 per cent to 241 from 781. Turbines also cost segment profits 20 per cent and margins 146 basis points.
Overall energy revenue was up 17 per cent.
“We’ve said it before, but the impact of wind is huge here,” CFO Keith Sherin said on the company’s earnings call. He added the company was not expecting the credit to be extended. It expires Dec. 31.
Mitt Romney has said he would not extend the credit, which grants 2.2 cents per kilowatt-hour credit for wind power production. President Obama said he favours extending it. According to The Hill’s Zack Colman, Senate Majority Leader Harry Reid has pledged his support but the measure has not even been discussed in the House.
Meanwhile, Munich, Germany-based Siemens said it was mothballing its entire solar energy business.
”Due to the changed framework conditions, lower growth and strong price pressure in the solar markets, the company’s expectations for its solar energy activities have not been met,” the company said according to the AP.
The company did say it would continue to invest in its wind and hydroelectric power sectors, AP reported.