The global economic crisis will slow down investment in renewable energy projects, including wind andsolarprojects in most of Europe – and that could lead to a longer-term setback in efforts to cut greenhouse-gas emissions.
That's the bad news out from a trio of reports Monday that laid out evidence that renewable energy projects are being put on hold in the midst of a worldwide credit crunch.
In Europe, the wind power market is showing signs of a slowdown from the double-digit growth rates of the past few years, a Monday report from Frost & Sullivan said. That will drive down prices for wind turbines and their components, forcing manufacturers to compete on bringing down prices, research analyst Gouri Nambudripad wrote.
But like others that have predicted a slowdown for wind power in the short term (see Wind Turbine Shortage Over? And Energy Financing Gone With the Wind), Nambudripad said that an economic slowdown-driven drop in prices for steel and other raw materials for wind turbine manufacturers, along with continued government support for renewable power generation, should sustain the long-term demand for wind power.
Meanwhile, solar projects in Europe could be curtailed next year by the global economic crisis – but Germany, the largest solar market in the world, could prove to be an exception to this trend. That's the view that Thomas Weisel Partners heard from participants in the Solar Praxis conference in Berlin last week and laid out in a report released Monday.
The sunnier outlook on Germany's solar market – based on statements from Cristof Stein, director of Germany's state-backed KfW Bankengruppe – noted t hat the bank would continue to lend money for solar projects. Since the bank finances more than half the solar installations in the country, that was good news.
"However, commentary from the panelists indicated that funding from banks in many other European countries has dried up as the firms move to conserve capital," the report said. "This could prove to create difficult markets in Europe, ex-Germany, until the credit crisis abates."
It's not just wind and solar power that could lose ground as the economy continues to unwind. A whole host of lower-carbon energy sources, including new nuclear power plants, could be stalled or canceled – and that could lead to a long-term rise in greenhouse-gas emissions, according to a report released Monday from the French consulting firm Capgemini (via the New York Times' Green Inc. blog).
"Governments confronted with financial and economic crises will have less tax revenues, and therefore will have to limit their spending, for example, by reducing financial subsidies to renewable energies," the report said.
Spain's government has already started limiting its solar subsidies, the report noted (see Spanish Energy Commission Votes to Shrink Solar Incentives). As the credit crisis continues, smaller utilities likely will be gobbled up by larger utilities and publicly traded renewable energy companies will continue to see their share prices suffer, the report said (see Weak Euro Prompts Suntech to Slash Sales Forecast and Stocks Stumble After SunPower Lowers Forecast).