Thanks to soon-to-expire tax incentives and the increasing cost-competitiveness of renewable sources of energy, 2015 is shaping up as perhaps the best year ever for wind-farm construction and new, utility-scale solar projects.

Also, the variable nature of wind- and solar-energy output is spurring development of battery-storage projects designed to make renewables a more reliable element of the nation's electricity system.

"The wind-power market continues to grow and is on target to become the leading source of new energy in the country—[expected] to double in the next five years," says Tim Maag, vice president and general manager of the Wind Energy Group at Mortenson Construction.

The cost of wind power has "dropped by over 50% in the past five years. Taller towers, longer blades, improved gearboxes and other electronic components have resulted in more-efficient turbines, which has been a significant factor in driving down costs," says Maag, whose company to date has completed wind projects totaling more than 17,000 MW.

"More-efficient construction services are also a factor" as contractors incorporate lean design and construction techniques and other means to streamline the process of installing larger and larger wind turbines, he says.

J.P. Roehm, president of Infrastructure & Energy Alternatives, says his firm is "incredibly busy" with wind-farm work. "I wouldn't be surprised if we were totally booked out through the end of 2016 by the middle of this year," Roehm says, adding that he expects I&EA will install about 1,200 MW of wind turbines in 2015 and another 1,500 MW next year.

The volume of work led to shortages of wind and solar craftspeople and supervisors in oil-patch states such as Texas and Oklahoma. Contractors faced pressure to raise wages as many skilled workers shifted to the oil-and-gas sector for higher pay, Roehm says. But the situation has eased lately, due to the recent slowdown in oil and gas drilling and production.

According to the American Wind Energy Association, 4,854 MW of wind capacity was installed in 2014, up from only 1,086 MW in 2013, when uncertainty about the future of the federal production tax credit during the "fiscal cliff" crisis in late 2012 put on hold dozens of wind projects. Total installed wind capacity in the U.S. now tops 65,000 MW.

The PTC, which provides wind producers a $23/MWh tax credit for the first 10 years of a wind farm's output, has been extended, but only for projects in which at least some investment had been made by the end of 2014. As 2015 started, more than 12,000 MW of wind projects were underway, suggesting the possibility that this year's wind-turbine installations will approach the 2012 record of 13,131 MW of installed wind capacity. Next year also is expected to be a solid year for wind.

The outlook for wind-farm construction after 2016 is far less certain, however. "In our view, the wind market will be firm for another year but [will] continue to struggle long-term, due to uncertainty of the federal PTC, push-back on state renewable portfolio standards, cheap natural gas and weak power demand," says Mark Osten, senior director of business development at The Boldt Co.

Osten says the unstable wind market "creates an episodic project portfolio, makes it difficult for contractors to retain key labor resources. The best labor wants a more stable job market. Contractors cannot afford to keep wind expertise on the bench waiting for … opportunities."

Mortenson's Maag is more upbeat but acknowledges that "the lack of a [post-2015] PTC will have a significant impact on the wind construction industry."

The PTC's value was evident in 2014, when some utility solicitations for wind power drew offers below $25/MWh—roughly half the cost of wind power without the $23/MWh PTC. Those prices put wind power on par with natural-gas-fired generation. Utilities such as Topeka-based Westar Energy and Texas-based Austin Energy contracted for even more wind power than they had been seeking.