Renewable Energy’s Uncertain Economic Future
With the price of oil dropping to around $74 a barrel — and gasoline prices, on average, falling below $3 a gallon — the alternative-energy industry may have something to lose. The drop in oil prices stems from the global credit crisis and the recession fears it has spawned.
The stocks of alternative-energy companies, which had enjoyed boom times, have been slashed.
In the last three months, according to a report in today’s Wall Street Journal, renewable-energy stocks have dropped 45 percent, according to New Energy Finance, a London-based consultancy. But this could change.
Congress’ renewal of federal tax credits for solar- and wind-energy companies a couple weeks ago is expected to attract tens of billions of dollars in new private investment. But it’s unclear what will happen to these companies if tighter credit standards dry up bank lending. Green businesses that use newer technologies have the most to lose because they may entail more risk in the eyes of bankers.
I’ll be reporting more on the economic future of renewable energy. Meantime, green businesses still say that while there’s a lot to worry about, there’s also a lot to be hopeful for.