Bloomberg news reports that investments in wind farms, solar parks and other “clean energy” projects have plummeted since European governments announced they would reduce the inflated, guaranteed prices they pay for power from alternative sources.
New investment in renewable energy dropped to the lowest in two years in the first quarter, weighed down by low natural gas prices in the U.S. and subsidy cuts in Europe, Bloomberg New Energy Finance said.
Money flowing into the industry through asset finance, share sales, venture capital and private equity fell more than a third to $31.1 billion in the first three months of the year from a record $47.1 billion in the fourth quarter of 2010, the London-based researcher said today in a statement.
Countries including Germany and Spain have announced reductions in the guaranteed prices that they pay for electricity from renewable sources while in the U.K. the government is reviewing the rates. Gas in the U.S. in September fell to its lowest price since 2002 amid a glut in production.
So as long as governments are willing to pay exorbitant amounts in subsidies, investors are willing to put money into “clean” energy. But once they’re faced with the prospect of actually producing a competitive product that people will pay for, they run for the exits. Great business plan, that.