As the US and global economies falter, there has been a lot of apprehension and speculation about the renewable energy industry. As one of the world’s fastest growing industries, renewable energy would seem infallible to any but the most dramatic economic windfall. Yet the credit crunch has taken some toll on renewable energy investments, which are down from a year ago.
Overall, the renewable energy industry is holding strong due to rising energy prices, climate change, and incentive policies. Nonetheless, most renewable industries took some kind of hit when comparing the first quarter of 2008 with the same quarter last year. That is, except for the solar industry.
Solar energy actually gained in investment dollars, from $1.9 billion in 2007 to $3.2 billion this year.
Yet this does not mean the road for solar power will be totally smooth. Banks are knee-deep in risk aversion, there is a silicon shortage, and political elections are set to take place in many countries. But mainly these are relatively short-term setbacks. Banks, insurers, and investors alike see solar energy as a long-term and stable investment. The silicon shortage is expected to ease in the next year or so as manufacturers ramp up production. And, especially in the US, government sponsored support for solar and other renewable energy sources is fairly well entrenched at both the state and federal levels. There is, at least, considerable confidence by investors that federal tax credits, set to expire at the end of the year, will be renewed.
Rising costs of energy produced by fossil fuels are a big reason for the sliding global economy. So the eyes of investors and developers are landing elsewhere. They are landing on renewable energy. They are landing on solar energy. Banks may be cinching up their belts, and loans may not be so easy to get right now, but solar energy is set to grow and grow fast. Annual photovoltaic installations are projected to increase by five times in the next five years.
The fact is that solar energy, and renewable energy as a whole, is no longer perceived as a fringe, immature, “someday” industry. Now the development of solar energy and the solar industry is seen as a necessity, and minds and wallets are following suit.