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Alt-energy flagging in recession

It was a banner year for wind-energy in 2008, with the U.S. installing enough wind turbines to power two million homes and surpassing Germany to become the country with the most capability of generating power from wind. But can the U.S. remain in the lead in the midst of the recession?

A report released Monday by two wind-power advocacy organizations—the Brussels-based Global Wind Energy Council (GWEC) and Washington, D.C.'s American Wind Energy Association (AWEA)—showed that the U.S. doubled its capacity to create wind power last year. Meanwhile, a clean-energy analyst at investment bank Jeffries & Co., Michael McNamara, told Reuters that the U.S. will become the world's top solar producer this year. (Update [Feb. 6]: McNamara tells us today that the statement attributed to him wasn't quite right. "The U.S. will likely be the biggest producer of solar power in the future," he said.) More than 1,000 megawatts in solar power capacity were installed in the U.S. last year, says Monique Hanis, a spokesperson for the Solar Energy Industries Association (SEIA).

So how to explain the slump in wind and solar installations reported in today's New York Times? Factories that manufacture turbine and panel components are laying off workers, and installations could fall by 30 to 50 percent, according to the Times report.

The GWEC and AWEA report was based on all of last year's wind projects: In 2007 and last year, more than 70 wind-power facilities opened or expanded; of those, 55 were in 2008, says Christine Real de Azua, an AWEA spokesperson. The problem now is that buying and installing turbines and solar panels requires lots of capital, and few investors are lending because of the credit crisis, Hanis and Real de Azua tell ScientificAmerican.com. Available tax credits for developers aren’t an incentive when they don’t have the revenue, they add.

"Because these are capital-intensive industries, 2009 is not going to be as good a year as 2008," Real de Azua says.

The stalled projects are a concern for the industry, because while the U.S. may have  plenty of alt-power-generating capability, clean energy still accounts for a fraction of the electricity produced. Less than 1 percent of U.S. energy comes from solar, according to SEIA. Between 1.5 and 2 percent of U.S. power comes from wind, Real de Azua says, compared with more than 20 percent of Denmark's electricity.

The U.S. has the ability to catch up with Denmark by 2030, according to a Department of Energy report (to which AWEA contributed) released last year. And clean energy, a platform of President Obama's administration, could get a boost in the economic stimulus package: The House version of the bill would allow companies to either use the tax credit or apply for a federal grant to get financing for wind farms or solar projects. The Senate version doesn’t contain that provision.

"There has been a lot of demand for wind as a new source of energy, but they [developers] need the financing to reach the finish line," Real de Azua says. "A lot will depend on the policies put in place, especially the stimulus bill. If it's well crafted, that will make a difference."

Image © iStockphoto/Stephen Strathdee

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