From: Climate Wire - October 17, 2008
The financial crisis has left capital available for clean technology investments for 2009 in a state of market limbo. Financiers are largely waiting out the storm, with most not committing any new funds to new projects for next year until signs emerge that the credit crunch is easing. And the new financial environment emerging from the collapsed U.S. housing market, featuring fewer banks and investment firms adopting more conservative lending practices, is forcing cleantech companies to scramble to adjust to higher borrowing costs and more intense competition for money.
Concerns are also growing that the business community will curb spending on energy efficiency and climate change initiatives next year as corporate executives brace for the possibility of a sharp recession in the United States and much slower global economic growth. Experts worry that disappointing retail sales statistics and growing uncertainty over whether federal government bailout schemes will work, reflected in the roller coaster ride that the New York Stock Exchange (NYSE) has become, will only reinforce the belt-tightening in the markets.
"This is a very tough market for any investors," said Andy Katell at GE Energy Financial Services. GE Energy Financial and other firms say they are still committed to complete financing for projects already in the works. That should ensure a healthy climate for clean energy's growth for the remainder of the year. But Katell also confirmed that most new projects seeking financial backing will have to wait until the economy has shaken off the fear that's dominating it now.
Read Full Article: World Business Council for Sustainable Development (WBCSD)
Related: Sustainable Energy After the Correction - Seeking Alpha
Oil prices are another factor which can potentially affect investment in sustainable energy, now that the price of oil has dropped to almost half of its maximum about four months ago. Based on trends in the 1970/80's, it seems that investment in renewable energy tends to be directly proportional to oil price. Regardless of the usual "justifications" such as environmental concern, carbon footprinting, and sustainability -- the interest in alternative energy usually becomes most intense when fuel prices (and therefore everything else) are higher.
Related Articles:
> Credit crisis, lower oil prices could knock focus off of alternative energy - Sven Gustafson - Energy Technology - Michigan Business Review - MLive.com
> Oil prices fall on demand concerns :: ENERGY ENVIRONMENT NEWS
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A few more articles on this topic of the effect of the economic crises on aspects related to renewable energy and environment...
> What Does the Economic Crisis Mean for the Green Tech Sector? | 80beats | Discover Magazine
> How the Economic Crisis Will Affect the Environment | Environment | AlterNet
> Going green in tough times
> Global recession: A soft landing for low-carbon industry? - ClimateChangeCorp.com
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Venture capital to drop, but clean tech OK -- survey
From: Reuters - December 17, 2008 -
Venture capitalists, who have seeded new ideas for everything from Google to smart electric meters, expect increased investment in clean technology despite the recession, a survey showed Wednesday. A survey by the National Venture Capital Association found that 400 venture capitalists expect investment to drop in nearly every other area.
While there may be stable investment in life sciences and biotechnology, those surveyed believe semiconductors, media and entertainment and wireless communications will all suffer declines. The loss of capital will cut across regions, hitting Israel, India and China and "the outlook is particularly grim in Europe," the survey said. Venture firms will spend $29 billion to $30 billion by the year's end. A majority of those surveyed see that dropping 10 percent or more in 2009, except for clean technology.
"Despite lower investment predictions across all industry sectors, clean technology is viewed ... as potentially growing in 2009," the survey found. One reason for optimism about clean tech is government involvement. During his campaign, President-elect Barack Obama pledged to spend $150 billion over the next decade to develop clean tech, creating 5 million jobs in the industry.
Read Full Article: World Business Council for Sustainable Development (WBCSD)
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