Market Carnage Killing Solar And Everything Else That's Green
Last week the Renewable Energy Tax Incentive was signed into Law and Matthew predicted that the renewable energy industry would come out ahead. He quoted the VP of Sharp Solar: "The solar industry is now scaling up to bring down manufacturing and installation costs, build its infrastructure, grow public awareness, and attract customers."
The Wall Street Journal is not so sure. Keith Johnson in the Journal notes that last week, for the solar power industry, champagne was the order of the day. Now its hangover time. He writes:"Optimism reigned on Friday after Congress and President Bush inked an eight-year extension to clean-energy tax credits which should help solar power especially. The new law gives homeowners serious help in installing their own solar-power arrays, and for the first time opens up the tax credits to power companies.
The combination was meant to herald a new era of big solar-power rollout. Or, as Lyndon Rive, chief executive officer of SolarCity in San Francisco, told The Wall Street Journal: "The solar industry has been waiting 30 years to be able to offer parity with grid prices. Now we're able to offer it."
Headwinds in the rest of the economy—and some potential impacts from the new law—appear to be to blame for the sector's woes. Now that homeowners can finally get tax breaks for 30% of home-solar installations—breaking down hefty upfront costs, one of the biggest barriers to solar power—the credit crunch means homeowners are struggling to land loans to cover the other 70% of the cost of installation. " ::Wall Street Journal
Nobody is going to get a loan when their house is already worth less than their mortgage, so innovation, alternative energy and green renovations will require cold, hard cash from rich purchasers. Everyone else will just have to wait. As the Journal concluded: "Clean energy may yet have its day in the sun—but as long as the financial-market turmoil lasts, it isn't going to be an easy ride for anyone."
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