The beginning of the recession marked a dramatic turn for the wind industry. Having previously grown by leaps and bounds, wind developers suddenly found themselves almost entirely cut off from financing. Even banks that weren't failing slowed or stopped their lending.
Wind has been particularly sensitive to the downturn, because it requires large investments, which are often supported by tax rebates that banks didn't need while they were losing money. But the Wall Street Journal says the horizon is brightening:
Bankers say this is the beginning of an active pipeline of new wind-farm financing, as well as investment in large solar installations and geothermal facilities. Project developers and Wall Street appear to be viewing the federal cash grant program as such a good deal, industry experts say, it may grow much larger than its Washington creators expected...It has been a little over a year since the Department of Energy released a report that pushed government loan assistance as a good way to quickly expand wind capacity. Although it was probably unintentional, the DOE's timing on completing the program couldn't have been much better, with banks just now beginning to aggressively look for opportunities again.
The Energy and Treasury departments have said they expect to spend $3 billion on the program, which started July 31 and runs through the end of 2010, and was part of the stimulus bill. But a government spokesman says requests for $800 million in grants were submitted during the first four weeks.
Some Wall Street bankers say they expect applications to grow to $10 billion, based on projected wind-power installations.
Also in on the action are some rather large utilities. Duke Energy just announced plans to build a 200 megawatt farm in Colorado called Top of the World Wind Power, while Xcel Energy has received regulatory approvalto put another 150 megawatts in Minnesota and North Dakota.
The only thing left is for T. Boone Pickens to pick back up his plans for a massive wind farm in Texas. If he finally finds the right billion-dollar partner, it will be a sign the recovery has truly arrived.