Renewable energy sector feels impact of economic downturn

by Antonio Pasolini on February 6, 2009

Two recent articles say that the renewable energy sector has been suffering from the effects of the credit crisis. The International Herald Tribune announced that “installation of wind and solar power is plummeting. Factories building parts for these industries have announced a wave of layoffs in recent weeks, and trade groups are projecting 30 to 50 percent declines this year in installation of new equipment, barring more help from the government. Prices for turbines and solar panels, which soared when the boom began a few years ago, are falling.”

Elsewhere, Renewable Energy World also acknowledges that the pasture is not so green for green energy, but leaves some room for optimism. “Financing conditions have changed so drastically, and quickly, in the U.S. during the past few months that renewable energy industry professionals may already be looking back at the recent years’ phenomenal growth rates with a sense of nostalgia … But in the face of all this, promising signs and valid cause for optimism remain. Long fought over extensions and expansions of renewable energy investment and production tax credits were included in the US $700 billion financial rescue and economic stimulus package passed in October. Adding to that, “green” economic stimulus is a core aspect of President Barrack Obama’s “American Recovery & Reinvestment Act of 2009,” which could inject as much as $126 billion worth of government capital and additional private sector incentives into the economy over the next two years.”

Every story has two sides to it and in moments of crisis, some win, some lose but it’s likely that the industry as a whole will ride out the storm. The global move towards renewable energy is inevitable. So, while the crisis may represent a temporary setback, the sector will progress regardless.

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