While alternative energy may be a hot topic on Washington, the opposite seems to be true for Wall Street. New Energy Finance, an information and research provider to investors in renewable energy, bio-fuels, low-carbon technology and carbon markets, recently reported that in the first quarter, global financing for renewable-energy projects fell from €20.5 billion to €11.5 billion. Based on data from Dow Jones Venture Source, Ernst & Young announced that from January to March, venture capitalists spent $277 million on clean-energy projects, compared with $715.3 million in the same period last year.
“Investors took a deep breath and paused,” said Ernst & Young’s Joseph Muscat. “The weak economy has caused demand for energy in general to go down.”
The WSJ recently reported on the downturn affects seen in specifically solar-energy. Developers in solar energy are experiencing greater difficulty in raising capital for solar projects. A number of banks that have reduced financing for major solar projects and Spain- the second largest solar lower market, has reduced its subsidies. According to research firm Collins Stewart, in 2008 world-wide shipments of solar cells to companies that install rooftop solar-power systems and build fields of solar panels for commercial energy production grew 85% to 6,000 megawatts. Within twelve months they project that this will fall to 5,575 megawatts.
Many however see the light at the end of the tunnel. Ethan Zindler, head of North American research at New Energy Finance states, “The long-term trends are still there for clean energy. This is a period of doldrums, where we’re stuck between the last massive waves of investment and waiting for some of the major support from stimulus packages around the world to kick-in.”
Robert W. Baird & Co., a financial services firm that provides investment banking, asset management, capital markets, private equity and research services, may be among those who recognize this. On Monday, the financial services firm announced plans to launch a clean technology division. Baird has hired four research professionals and three investment bankers who will focus on industries including alternative energy and green tech. CEO Paul Purcell states, “Adding this talented and experienced team gives us immediate credibility and a unique competitive advantage in this very dynamic sector. It establishes Baird as a premier clean technology equity capital markets franchise.”