Could we see a major slowdown of clean energy development?
From bio diesel plants to wind and solar farms in the U.S. and aboard, many companies face the current challenge to stay afloat, without the proper capital and backing, it could cause a major slowdown in the alternative energy industries. Although DrivePwr’s main objective is to cover news and trends in the “green transportation” industry, we can’t help but cover some other important topics that indirectly effect the cause. From Solar to Wind energy to automotive companies like GM, Ford, Chrysler and even Tesla Motors, small and large companies all over the industry are feeling the pinch. Two major factors are making investors weary, cheaper oil and unavailable or expensive capital that was previously available, and it was much less expensive too. Unless you have been hiding out in a bomb shelter, you have watched the U.S. mortgage crisis turn into worldwide financial turmoil. The price of a barrel of oil has hovered below $75 for the past week (down from over $147 in July), with fears of demand running rampant. This deadly combination could mean disaster for the industry, or by minimum slow it down..a lot.
Overall, the green-tech industry relies heavily on outside sources of capital from banking institutions or large companies. Even large and once cash-strapped companies like GE are having issues:
“Right now we can’t price a deal,” said [GE Financial Services managing director Timothy] Howell in an interview with Clean Technology Insight on the sidelines of the Solar Power International conference in San Diego, Calif. “We can’t go out and borrow. So we can’t commit to a deal today.”
GE is having issues getting money, and many green-tech companies rely on funding from companies like GE. That can’t be a good thing. Over the past 3 months, we have watched a decline of over 45% in the renewable energy stocks. Compare that to the average 23% decline in the Dow Jones Industrial Average, and the prognosis is not good.
Looks like many of the analyts on Wall Street are expecting mergers, acquisitions and an overall consolidation in the industry. But the overall outlook isn’t all grey skies, larger companies and governments like the U.S. and U.K. see alternative energy solutions as viable, profitable and an opportunity to elminate our dependence on foreign oil. Although any drop in prices at the pump is by all means a GOOD thing for the pocket books of Americans, we still need to push hard for solutions to the pollution, sollutions to our economic dependence on a finite product.
