Russ Steele
During the Prop 23 vs AB-32 debate conservative bloggers warned the once the subsidies ran out the corporate interest in wind and solar would decline and than vanish. This morning P. Gosslin at The NoTricksZone blog has a English tranlation of a German language article in the German Technology Review.
The article starts with this introduction:
Companies of the finance-intense sector of renewable energy are getting their supply of cash cut off. Investors are opting for lower risk projects.
Gosslin's post continues:
Almost everywhere globally governments are scaling back programs that support renewable energies.”
And so it’s only normal that venture capital companies are now opting out. Investment strategies are changing. Technology Review writes:
Germany, Italy and Spain are reducing subsidies, in America the money from the 2009 stimulus package is slowly running out.”
According to Technology Review, people want quicker returns and less risk. Well who doesn’t? Technology Review writes:
During the last years many finance companies began, however, to invest in long-term projects with high capital requirements. That only worked mainly because they were able to expect subsidies from the state. Thus hundreds of millions flowed into start-ups in solar technology, which first had to build expensive plants to get the technology ripe for the market. The profits came later, if at all.”
Now the state subsidies are shrinking and new startups will have little chance of competing against the already established companies – too risky. The bubble has nowhere to go but to implode. So watch the politicians soon scramble and start blaming “speculators” and “greedy finance companies” for the mess they themselves created, and then start calling for more financial regulation.
It is no wonder that Al Gore has "gone postal" his dream of huge profits have collapsed along with the flight of investors. We warned this would happend, but the proponents of AB-32 assured voters that it would not happen. Now what? Obama is killing coal power, the EPA is trying to stop the development of shale gas with the banning of proven drilling techniques, and now investors are running from renewables. One has to ask, What Now?
