Solar Slowing As Credit Freezes Up

Wind and solar power grew at a blistering pace in recent years, and that growth seemed likely to accelerate, especially in the United States under the green-minded administration of the new president, Barack Obama.

But because of the credit crisis and the broader economic downturn, the opposite is happening: Except in isolated markets, like China, installation of wind and solar power is slowing, and in some cases plummeting.

Factories building parts for these industries in the United States have announced a wave of layoffs in recent weeks, and trade groups are projecting 30 percent to 50 percent declines this year in the installation of new equipment, a decrease that bars more help from the government.

Prices for turbines and solar panels, which soared when the boom began a few years ago, are falling. Communities that were patting themselves on the back just last year for attracting a wind or solar plant are now coping with cutbacks.

''I thought if there was any industry that was bulletproof, it was that industry,'' said Rich Mattern, the mayor of West Fargo, North Dakota, where DMI Industries of Fargo operated a plant that makes towers for wind turbines. Even though the flat Dakotas are among the best places in the world for wind farms, DMI recently announced a cut of about 20 percent of its work force because of falling sales.

Much of the problem stems from the credit crisis that has left Wall Street banks reeling. Once, as many as 18 big banks and financial institutions were willing to help finance installation of wind turbines and solar arrays, taking advantage of generous government tax incentives. But with the banks in so much trouble, that number has dropped to four, according to Keith Martin, a tax and project finance specialist with the law firm Chadbourne & Parke.

Wind and solar developers have been left hunting for capital.

''It's absolutely frozen,'' said Craig Mataczynski, president of Renewable Energy Systems Americas, a wind developer. He projected his company would build just under half as much this year as it did last year... read more