Global Recession Hurts Green Energy

Spiegel reports that world economic woes have taken the wind out of green energy’s sails:

Plunging oil prices have made renewable energy sources relatively less cost-effective, while thinner profit margins have prompted big industrial users of power to tighten their budgets for sustainable energy programs — cutting into sales by green energy suppliers.

At the same time, the rising cost of capital is making it harder for both consumer and suppliers of alternative energy equipment and services to finance new green projects. The impact will be felt especially acutely by small, independent manufacturers and electricity producers, some of whom could go out of business or be forced to sell out to larger companies.

With demand weakening and prices in decline, the green sector is hoping for more government support to carry it through the economic turmoil. Many forms of alternative energy already enjoy government subsidies to move the cost of green power closer to parity with cheaper fossil fuels. Now companies are looking for direct investments by governments in clean energy projects.

Being leveraged to the hilt means going under for green startups. Big utilities companies, meanwhile, have a decided advantages both in buying smaller companies and receiving government funding. Green energy might be more of a slow, silent transition than an economic bubble.

It’s something to keep an eye on as Obama enters office.

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  • Sherry

    Being dependent of foreign oil for our main source of energy is a serious security risk. We are at their mercy. This past year the the damage that has been done to our economy and society by our dependence is immeasurable. The trickle down effect of the high prices we paid at the pump last year may never stop trickling in my lifetime. Record numbers of jobs and homes have been lost as direct result. The high cost of fuel used to manufacture and ship every consumer good imaginable was passed on to the consumer. Groceries are through the roof and in smaller packages. Electric bills have seen record rate hikes. Mine went up 16% and since the price of fuel came back down they had mercy on us and are going to cut it by 4%. Who is absorbing the rest, we are. We have to look at “the big picture.” Our days of tunnel vision need to cease. Our nation better wake up and smell the coffee. With all our bail outs along with the 168 billion economic stimulus package, that btw did nothing for our economy it is hard to understand why our government can’t see the need to bail us out of our dependence on foreign oil. Meanwhile, while we are busy doing the Happy Dance around the lower prices at the pumps, OPEC is planning to cut production to drive prices back up to between 75-100. per barrel. Why don’t we invest in America’s Energy Independence. It would cost the equivalent of 60 cents per gallon to charge and drive. The electricity used to charge the car could conceivably be generated by solar or wind. Why not invest some of these millions in getting some of these projects set up? Create clean cheap energy, badly needed new green collar jobs and reduce our dependence on foreign oil. What more of a win-win situation could there be? Now there is talk of another stimulus pkg. Don’t get me wrong, if you hand me a check I will take it. I am broke from this past year myself. I just think we are going about this all wrong. I just read a fascinating book by Jeff Wilson called The Manhattan Project of 2009 Energy Independence NOW. We need to look at the “big picture” This book Is the big picture.

  • Drea

    Sherry, well put. There are tons of distractions out there wrt what to finance, but green energy should definitely stay in the forefront. Otherwise, what, we twiddle our thumbs until the next energy crisis, sure to be even bigger? Not wise. Thanks for the book recommendation.

  • With our citizens having the attention spans of a newt, I wonder if a year or two of low energy prices will return us to our SUV’s and Hummers? We did the supply & price dance many years ago, and then forgot about it entirely for a long time. Doing the right thing is always an uphill struggle, and our large corporate interests are always happy to sell us more of the wrong stuff if we’re okay buying it. We’ve been a credit driven economy for decades now, and the public is “shocked” by the current economic downturn – like you can run up huge trade deficits year after year without any lifestyle consequences. When the credit card bubble bursts next year, lots of people will be so far out on a debt limb that they can’t possibly get back. We need green energy to re-invest in ourselves and stop shipping boatloads of cash to the MiddleEast.

  • The Future of Alternative Energies and the future of America

    I was driving home from work last week and noticed the latest gas price of $ 1.66, seems like we were just recently at over $ 4 per gallon. Oil is now $ 45 per barrel, commodities like steel are down, our national debt is skyrocketing, and all the once high flying Solar energy stocks and green eco funds have plummeted along with the global markets. They say we are in a severe recession, that demand will fall for energy and that gas could fall to $ 1 per gallon as unemployment hits multi-decade highs. Seems like we were just being shocked by $ 145 per barrel oil and record profits by oil companies, it makes me as an American citizen really feel manipulated and that our government hasn’t had a plan for securing our country’s future. How did we get into this financial crisis? Who caused this collapse? Seems to me terrorists couldn’t have implemented a plan this exacting, yet we hear that this was triggered by only four percent of the outstanding US home loans being in question. Now all conversation turns to how many billions of US tax payer dollars will be reactively given to faltering industries to mitigate loss of jobs in America. These are global corporations asking for US bailouts. Will unsecured pension plans, hurt by the recent stock market collapse, be next to default? Where will jobs come from as we rise out of this global recession? Green technology jobs and projects may be now questionable due to falling energy prices. Will America be the country and we be the innovators of this Intellectual property? Can the hundreds of alternative energy startups get the financing they will need to stay alive through this recession and to successfully commercialize their products?

    Barack Obama will take office soon and has stated his administration will invest $ 150B over ten years to catalyze private efforts to build a clean energy future. Let’s hope he isn’t an advocate of ‘clean coal’, which many doubt exists or today’s Ethanol as his green alternatives. Will Q Microbes hold promise for Ethanol production which is in it’s early stages of research at UMASS Amherst? My hope is that he backs strong Solar, Wind, and Natural Gas based ‘distributed hydrogen generation’ projects, the building of Hydrogen distribution fueling stations, and Fuel Cell use in his ten year plan. Just to think, we could have used $ 25B to setup 20,000 hydrogen fueling stations in the US, instead, hundreds of billions will be wasted on reactive spending rather than implementing long-term energy solutions. Will our new president have the discipline and vision to invest in these energies and infrastructures, to create and capture these jobs, or will he drop these pre-presidential energy plan headlines until another day when prices start rising again? Where will all these billions come from, between the Iraq spending, financial crisis bailouts, and proposed alternative energy initiative investments? The more we print new money, the more we risk the value of the US dollar falling to all time lows and the American family’s wealth further disappearing. As we recover from this financial crisis and recession, will India and China’s thirst for oil reinitiate the high demand and prices as new cities continue to be developed in these and other emerging countries? Will inflation drive energy prices back up?

    As a citizen and investor interested in the advancement of alternative energies, in America’s future, and in managing these global wealth shifting trends, I sincerely hope we aggressively drive energy science, provide research and development dollars to these early startups, and reduce our dependency on dirty foreign oil and fossil fuels. We need a ‘Hydrogen Manhattan Project’ that integrates Solar, Wind and Natural Gas as a source of power to generate distributed onsite hydrogen coupled with fuel cell use. Focused research and development dollars solve problems through science advancements. Innovation and diversification into green energy is the answer for America and the world. For more information visit and bookmark my website;

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