Wind Turbine Manufacturer Trends in the US Market in 2016

The data for year 2016 wind installations has been published in Guidehouse Insights’ annual World Wind Energy Market Update report. There are an endless number of observations, trends, and key data points, but this blog focuses on one area: wind turbine manufacturer market share trends in the US market.

How Did Vestas Manage to Overtake GE Energy in Its Domestic Home Market?

Of the 8.2 GW built and connected in 2016 in the United States, Denmark-based Vestas surpassed US-based GE Energy for the first time in the era of the modern wind industry. Vestas took 45% market share to GE Energy’s 41%. This is somewhat surprising given GE Energy’s long-standing domestic advantage over its foreign competitors. One reason for Vestas’ success in the United States is that it has made major investments in localizing its manufacturing and supply chain in the country. From a domestic content perspective, Vestas is now comparable to GE—if not stronger—since GE has shifted in recent years to importing gearboxes from China while Vestas sources primarily from a supplier manufacturing in the state of Georgia.

Vestas also centralized its blade and tower manufacturing and nacelle assembly in Colorado, which is in the middle of the windy central plains corridor of the United States. GE outsources blades and towers to manufacturers located throughout the central plains. However, its nacelle assembly for the United States is primarily done in Pensacola, Florida, requiring higher transportation costs to get the nacelles to the central plains states of the United States, where most wind capacity is being added. In a cutthroat competitive turbine pricing environment, the additional costs of transport can win or lose contracts.

Why Are Other European Wind Turbine Manufacturers Not Getting Higher Market Share in the United States?

The remaining market share left to other foreign manufacturers is minimal, with Siemens at 9%, Gamesa at 3.5%, and a catchall “others” category that primarily represents Nordex at 1.4%. Siemens’ market share has dropped, even though it has made significant manufacturing and supply chain commitments to the United States. Yet, there is a view among corners of the wind industry that Siemens has not made enough investments in its geared onshore turbine platform to remain competitive, leading to fewer onshore sales—especially in the United States, where there is a preference for geared turbines.

Some of the numbers bear this out. In 2016, Siemens’ 805 MW installed in the United States represented 8.9% market share. By contrast, in 2012, Siemens installed 2,628 MW in the United States and captured 23% market share—ahead of Vestas with 11% share, according to Guidehouse Insights’ wind capacity database. This strong share was primarily from sales of the SWT2.3-108 machine. Four years later and 100% of installed capacity in the United States was from the same SWT2.3-108 unit.

For the others, such as Nordex, Senvion, and Gamesa, those companies have not had as much localized manufacturing and supply chain activity as Vestas, GE, and Siemens, which makes it more difficult to compete on cost. Gamesa initially localized its supply chain in Pennsylvania, and it should be lauded for its efforts to revitalize blue collar and unionized factory jobs in that state. However, it may not have been a strategically wise decision to locate far away from the higher growth markets of the US central plains.

For a wealth of global and country-level wind market data and analysis, see this year’s annual World Wind Energy Market Update report from Guidehouse Insights.