The alternative-energy industry, which enjoyed a boost when oil prices skyrocketed, is seeing its fortunes change. Per-barrel oil prices have halved since July, lessening consumer demand for alternatives. And the credit crunch sure isn’t helping, as long-term funding is harder to come by for wind, solar, electric vehicles, cellulosic biofuel, and their ilk. Renewable-energy stocks around the world have dropped some 45 percent in the past three months, according to consultancy New Energy Finance. Some companies are calling off initial public offerings because of poor market conditions; others have no choice but to step them up as bank loans become more elusive. Competition for private funding will likely become increasingly cutthroat among technologies that are not yet viable on the large scale. Analysts expect consolidation around the bend. Laments one venture capitalist, “Declining oil prices can give us an artificial and temporary sense that reducing oil consumption and energy consumption is an issue we can put off.”
