FLORENCE General Electric Co. expects increased competition and a reduction in subsidies by cash-strapped governments to lead to more companies exiting the wind and solar power businesses, but the industrial behemoth still sees growing long-term demand.
"There's going to be a lot of casualties in the wind and solar businesses, there already are in solar," John Krenicki, who leads GE's energy division, told Reuters in an interview on Monday.
The U.S. may see an uptick in orders in 2012, prompted by the expiry of government incentives at the end of the year. However, the outlook for government support in the U.S. and Europe, in part do to economic woes, was not positive.
"I don't expect a 100 percent withdrawal of credits but I expect change, so maybe less," he added.
Nonetheless, GE expects the long-term demand for wind equipment to continue growing, especially as technological improvements made even the most economically challenging parts of the industry less reliant on legislated support.
"Even offshore wind is becoming very competitive. In the UK market it's not clear the subsidy is going to be required," he said.
GE Energy manufactures thin film solar panels and systems and is one of the biggest players in the wind turbine manufacturing business.
Solar panel maker Solyndra collapsed into bankruptcy late last year, unable to compete with plummeting solar panel prices for and owing the U.S. government more than $500 million.
Turbine prices had eroded steadily since 2008, but GE said it saw some stabilization last year.
Some analysts nevertheless believe GE and wind turbine rivals like Denmark's Vestas and China's Sinovel, face a difficult 2013 even if the U.S. incentive scheme is extended beyond end-2012.
Uncertainty about the tax credit had led to a rushed 2011 and 2012 wind farm building cycle, while new development plans for 2013 have plummeted, according to Denmark-based MAKE Consulting.
(Reporting by Tom Bergin; Editing by Hans-Juergen Peters)