The financial crisis and energy crisis loom like two grim reapers over 2009. Now these evil twins are feeding off each other. Today The New York Times reported a dearth of loans and capital brought on by the financial meltdown that is hitting the nascent green energy sector hard. Layoffs are up, and solar and wind power installations have dropped 30 to 50 percent in 2009.
Despite the accelerating economic tailspin, 2008 ended with some high notes for renewable energy. Besides Obama's promises to boost the sector, the green energy industry also got a boost in September when Congress extended the renewable energy tax credits set to expire at the end of 2008. Those credits, plus the promising future of renewable energy, had led many banks to invest. But with those banks now in financial ruin, green energy companies are left wondering what to do. And funding isn't their only concern: the price of solar panels and other equipment are on the steep decline, the Times reports.
Nobody said it would be an easy start for the Obama administration, and this is a good example of what happens when multiple crises converge. The industry that could help the US climb out of one hole can't mature because its funders are in another. Newer companies could certainly bring in fresh ideas that the giants won't, but they're also less protected from a financial collapse. Of course, there's always one last funding source: Google.