BANKS COME BACK TO NEW ENERGY

Banks Lured By ‘Sexy’ Solar, Wind Energy Projects
Jim Efstathiou, Jr., and Christopher Martin (w/Romaine Bostick and Joe Winski), February 5, 2010 (Bloomberg News via BusinessWeek)

"About 30 banks including BNP Paribas SA and Rabobank Nederland NV are being lured back into financing “sexy” U.S. renewable energy projects following an $80 billion government investment in the industry…Debt financing may return to the 2008 level of about $6 billion in 2010, after falling to $3.2 billion last year, as banks lend more to wind and solar energy projects in the U.S…"

[Bruno Mejean, NY managing director, Germany’s Norddeutsche Landesbank Girozentrale AG:] “Most banks shut down in the first half of last year…This year they realize that they have to make money after all, so they are opening the spigots and deploying capital primarily to this sexy space.”

Preferences are shifting this year. (click to enlarge)

"With some of the [2009 recovery act] government aid set to expire at the end of this year, project developers say more taxpayer subsidies are needed to keep pace with investments in Europe and China…[The economic stimulus package] included about $80 billion for energy programs. Renewable energy incentives include $2.3 billion in tax credits for solar panels and wind turbine manufacturers and a grant program for renewable projects that has so far paid out about $2.3 billion…

"The subsidies helped FPL Group Inc. and BP Plc lead a record 9,900 megawatts of wind-power installations last year…U.S. developers may double solar panel installations this year to cover 1,000 megawatts of energy from about 500 megawatts in 2009…[but bank] lending rates remain higher than many developers can get with federal loan guarantees, and government support is still needed to make some projects profitable…European banks are more likely to finance U.S. renewable projects…"

Investing in New Energy is smart investing. (click to enlarge)

"[President] Obama has proposed an additional $5 billion in tax credits for companies that make solar panels and wind turbines in the U.S…[but the] outline of a Senate jobs bill… didn’t include an extension of the credit…The administration hasn’t taken a position on whether a tax grant program for renewable projects should be included in the jobs bill…

"A two-year extension to the renewable energy tax grants was introduced in the House…Passage may be delayed until the fourth quarter, so that developers seeking to benefit from the incentives hire workers to complete projects this year…"