The financial crisis continues to trickle into every facet of industry, even in the alternative energy sector. While there is a demand to explore alternative/renewable energy, financial institutions are raising concerns that investment capital for large renewable energy projects will be tighter as funds are less available.
Price is a main component holding back alternative/renewable energy development, and supporters said that if the prices for oil and gas keep falling, the incentive for utilities and consumers to buy expensive renewable energy will also decrease.
“Everyone is in shock about what the new world is going to be,” said V. John White, executive director of the Center for Energy Efficiency and Renewable Technology, a
Worldwide project financings for new construction of wind, solar, biofuels and other alternative energy projects this year fell to $17.8 billion in the Q3, from $23.2 billion in the Q2, according to New Energy Finance, a research firm in London. The slide is expected to be sharper in the Q4 and next year.
“Government funding for renewables is now going to have to compete with levels of government funding in other areas that were unimaginable six months ago,” Mark Flannery, an energy analyst for Credit Suisse, said in a New York Times article.
Renewable energy now meets 7% of the nation’s energy needs, and public subsidies have promoted a leap for several alternative energy sources in recent years.