Manufacturers from South Korea and China are also expanding production capacity and entering the U.S. market. Federal interest in the U.S. wind turbine manufacturing industry is based on (1) increasing the role of clean energy technology in energy production; (2) encouraging advanced manufacturing and the creation of skilled manufacturing jobs; and (3) enhancing the diversity of U.S. energy sources. For the next two decades fuel prices were low and U.S. incentives spotty. This allowed wind turbine manufacturers to establish themselves in countries such as Denmark, Spain, and Germany, where many wind turbine manufacturers are now based. These firms are headquartered in Europe, the United States, India, and China. Wind Turbine Components, Raw Materials, Global Supply Chain, and U.S. Manufacturing Capacity

		Wind Turbine Components

A wind turbine is a collection of operating systems that convert energy from wind to produce electricity. In simple terms, as shown in Figure 1 , the major components in a wind turbine consist of:
a rotor comprising four principal components—the blade, the blade extender, the hub, and the pitch drive system; a nacelle, the external shell or structure resting atop the tower containing and housing the controller, gearbox, generator, large bearings, connecting shafts, and electronic components that allow the turbine to monitor changes in wind speed and direction; a tower, normally made of rolled steel tube sections that are bolted together to provide the support system for the blades and nacelle; and, other components, including transformers, circuit breakers, fiber optic cables, and ground-mounted electrical equipment. U.S. Wind Turbine Manufacturing Facilities

At the end of 2011, the American Wind Energy Association reported that more than 470 wind turbine manufacturing facilities were located in the United States, up substantially from the 30-40 wind-related manufacturing facilities nationwide in 2004. Greater demand for wind turbines, cost savings related to transportation, and concern about the risks associated with currency fluctuations are among the reasons wind turbine and component manufacturers have opened new production facilities in the United States since 2005. U.S. Wind Turbine Manufacturing Employment

In 2011, the wind turbine manufacturing sector supported an estimated 30,000 manufacturing jobs nationwide. But although more of these large components are being produced domestically, imports remain significant. In an August 2012 report, analysts at the Lawrence Berkeley National Laboratory calculated that the share of parts manufactured domestically nearly doubled from around 35% in 2005-2006 to 67% in 2011. U.S. Exports

Future growth of the U.S. wind turbine industry also depends on foreign markets. More recently, however, many countries—especially in Europe—have begun to reduce subsidies for renewables, including wind. However, faced with a difficult fiscal and economic situation, some European countries have reduced their wind power feed-in tariffs and are taking a more critical look at their renewable energy policies. In the United States, various federal policies also have been instrumental in the development of a domestically based wind power sector, including
the production tax credit (PTC)/Investment Tax Credit (ITC), which will expire at the end of 2013; an advanced energy manufacturing tax credit (MTC), which reached its funding cap in 2010 (no additional funds were allocated to continue with the MTC); the Section 1603 Treasury Cash Grant Program, which required that wind projects begin construction by December 31, 2011, and be placed in service by December 31, 2012; and the Section 1705 Loan Guarantee Program for commercial projects, which includes manufacturing facilities that employ "new or significantly improved" technologies. The wind industry asserts that a national renewable electricity standard is needed to create long-term stability and to attract investment in new turbine production facilities. Production Tax Credit (PTC)/Investment Tax Credit (ITC)

The PTC, the main federal policy tool in the deployment of U.S. wind power, was first adopted during the Administration of President George H. W. Bush as part of the Energy Policy Act of 1992 ( P.L.
Increasing U.S. energy supply diversity has been the goal of many Presidents and Congresses. This commitment has been prompted by concerns about national security, the environment, and the U.S. balance of payments. Investments in new energy sources also have been seen as a way to expand domestic manufacturing. For all of these reasons, the federal government has a variety of policies to promote wind power.
Expanding the use of wind energy requires installation of wind turbines. These are complex machines composed of some 8,000 components, created from basic industrial materials such as steel, aluminum, concrete, and fiberglass. Major components in a wind turbine include the rotor blades, a nacelle and controls (the heart and brain of a wind turbine), a tower, and other parts such as large bearings, transformers, gearboxes, and generators. Turbine manufacturing involves an extensive supply chain. Until recently, Europe has been the hub for turbine production, supported by national renewable energy deployment policies in countries such as Denmark, Germany, and Spain. However, support for renewable energy including wind power has begun to wane across Europe as governments there reduce or remove some subsidies. Competitive wind turbine manufacturing sectors are also located in India and Japan and are emerging in China and South Korea.
U.S. and foreign manufacturers have expanded their capacity in the United States to assemble and produce wind turbines and components. About 470 U.S. manufacturing facilities produced wind turbines and components in 2011, up from as few as 30 in 2004. An estimated 30,000 U.S. workers were employed in the manufacturing of wind turbines in 2011. Because turbine blades, towers, and certain other components are large and difficult to transport, manufacturing clusters have developed in certain states, notably Colorado, Iowa, and Texas, which offer proximity to the best locations for wind energy production. The U.S. wind turbine manufacturing industry also depends on imports, with the majority coming from European countries, where the technical ability to produce large wind turbines was developed. Although turbine manufacturers' supply chains are global, recent investments are estimated to have raised the share of parts manufactured in the United States to 67% in 2011, up from 35% in 2005-2006.
The outlook for wind turbine manufacturing in the United States is more uncertain now than in recent years. For the past two decades, a variety of federal laws and state policies have encouraged both wind energy production and the use of U.S.-made equipment to generate that energy. A continuing challenge for the industry is uncertainty about one main federal policy tool in the deployment of wind power, the production tax credit (PTC), which Congress has extended eight times and let lapse on four occasions. Most recently, the PTC expired at the end of 2012, but a few days later, Congress extended it through year-end 2013. At least a dozen wind turbine manufacturers announced layoffs or hiring freezes at U.S. facilities in 2012, citing concern about the PTC's future as one reason. Other factors affecting the health of the U.S. wind industry are intense price competition from natural gas, an oversupply in wind turbines, and softening demand for renewable electricity.