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Clean Power Projects Are In for a Bumpy Ride

Last year might have been a record year for cleantech investing, but the first half of 2009 will be a lot more “subdued,” according to research from New Energy Finance. While New Energy Finance said that global clean energy investing figures hit a new high of $155 billion for the first time ever in 2008, the second half of the year was a lot weaker than the first, and the research firm thinks that the slowdown in investing will continue for at least the first half of the 2009.

The biggest chunk of last year’s clean energy investments was spent on asset finance for clean power projects, particularly solar power projects, and wind farms in Europe and North America. Of the $155 billion, a good $97 billion, or 62.5 percent, was spent on such projects last year, rising from $84.5 billion in 2007. But Michael Liebreich, chairman and CEO of New Energy Finance, said in a statement that in the second half of last year the debt and tax credit finance for clean power projects dried up because of problems with banks.

And the hold is expected to last for the next six months. Liebreich says:

The dearth of debt finance will continue into 2009. In addition, public stock markets remain fragile, and this will deter clean energy firms wanting to launch IPOs or secondary issues. So it looks likely that total investment levels in the first half of this year will be more subdued than the first six months of 2008.

And how fast clean power project funding will return is still up in the air. New Energy Finance says a renewal of debt and tax credit financing for clean power projects will rely on two things: to what extent the stimulus package includes clean energy, and if banks feel comfortable enough with low central bank rates to start lending money again. No wonder T. Boone Pickens has stalled his wind plans indefinitely.

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