Tough Times Continue for Leading Sectors of Renewable Energy Industry

(image: energygem.com)

The energy trading information site energygem.com linked to a New York Times article published yesterday that details the suffering of the wind and solar panel sectors as a result of the recession and credit crunch.

After experiencing an extensive boom in business and investment in recent years, wind turbine and solar panel manufacturers are canceling orders and laying off workers. While the collapse of oil prices has led to reduced interest in renewable energy sources, the main cause of the wind and solar sectors’ struggles is the much-publicized credit crunch. The biggest banks in the U.S., facing serious cash flow problems of their own, have clamped down on loans and investments and wind and solar companies have been hit hard. Wind farms, for example, require enormous amounts of space and therefore enormous amounts of money to secure that space, needing up to 50 percent of the farm’s cost to come from capital investment.

Wind and solar companies are optimistic that the forthcoming stimulus package and a green-thinking president will give their business a boost. Unfortunately, it appears that no stimulus legislation would be enough to quickly bring back the huge demand for wind and solar power that existed during the last two or three years.

“Nothing Congress does in the stimulus bill can put the market back where it was in 2007 and 2008, before it was broken,” said Keith Martin, a tax lawyer and project finance specialist. “But it can help at the margins.”