INDIANAPOLIS | The greatest danger to the future of the Indiana wind energy industry may be the possible loss of federal government subsidies.

Frank Hoffman, a partner at the Indianapolis law firm Krieg DeVault, who has landed more than $53 million in financing for Indiana wind turbine component manufacturers in the last two years, said Indiana's wind industry is mostly growing in response to federal incentives.

"We've got to face it, it's a subsidized business," Hoffman said. "If you don't get the 30 percent subsidy, it's not viable because coal and natural gas are cheaper."

The federal stimulus act allows wind power developers to receive a 30 percent investment tax credit as a cash grant for wind facilities constructed in 2009 and 2010. The grant program needs to be renewed if Hoosier wind energy development is to continue at its record-breaking 2009 pace, Hoffman said.

Last year Indiana reached 1,036 megawatts of wind capacity, with 90 percent of that capacity added in 2009 alone. According to the National Renewable Energy Laboratory, Indiana has the potential to generate 148.2 gigawatts of wind energy, or about four times the state's total electricity consumption.

Hoffman told participants at the third annual WIndiana Conference in Indianapolis on Thursday that Hoosier manufacturers should also climb aboard the wind energy bandwagon.

Manufacturing wind turbine components, such as gear boxes at the Brevini Wind main drive plant in Muncie, creates more permanent U.S. jobs with a lower investment cost than building wind farms, which require more capital up-front and end up creating fewer permanent jobs, Hoffman said.

"We can't have a policy that subsidizes wind farm production if the component parts are manufactured overseas," Hoffman said. "We have to change that dynamic."