Credit Crisis Is Sucking the Wind out of Green Energy
One might have thought that the green energy industry was poised for success with such a strong supporter in the White House, but banks unwilling to do what they’re supposed to have caused yet another industry crisis.
Without support from the economic stimulus package still being molded by the House and Senate, wind and solar power installation will continue a freefall from an industry expansion that’s been going on for the past few years, the New York Times reported.
The number of banks subsidizing the industry’s expansion has dropped from 18 to four, sucking the lifeblood from wind and solar development.
The factories building parts for solar and wind energy installations are laying off workers, and industry experts see a 30-50% decline in installations during 2009 if the government doesn’t do something. (The cost of solar panels for consumers, which has already fallen 25% in the past six months, is expected to drop another 10% by midsummer.)
Even Texas billionaire T. Boone Pickens, a big proponent of wind power, has reined in his wind farm plans.
Passage of the stimulus package won’t guarantee a quick fix. It will take time, experts say, for the industry to recover.
Why won’t banks lend? Have the risks of default grown so much that no individual, company or industry is worth the risk? How long will this waiting game last? Lenders say it’s too risky to lend money in a recession, but the recession won’t end until banks unfreeze credit. Surely by now they’ve learned how to gauge risk. Let’s make lending a legally binding requirement for recipients of government funds.
