Green investors who went in for Jimmy Carter-era tax incentives got burned in 1985, when the credits disappeared, taking renewable energy research projects with them.
Funny how people forget the day before yesterday but remember not to trust US clean energy opportunities. A Deutsche Bank study last fall found North America to be a relatively risky bet as far as green investment goes.
The study (.pdf) also found that Spain triggered a downturn in the solar market when it reduced its solar subsidies in 2008, but demand picked back up once policies stabilized.
Now Spain is reducing solar-energy subsidies again as it tries to avoid a Greek-style debt crisis, but solar-energy investors may be getting sick of the policy ride.
“They’ve put the fear of god into all these investors,” Paul Turney, CEO of Madrid-based Solar Opportunities told Bloomberg News. “By the time they’ve finished dithering around, they’ll have hurt their credibility so badly that no one will want to invest.”
Spain is trying to convince investors of its responsibility here, to avoid any debt-crisis contagion, calculating that solar investment either isn’t that big a deal or already had it too sweet and will come around to the new reality.
The question now is: Will the cutting of green energy subsidies itself become contagious, putting the sub-industry on shaky ground around the world because it’s the first thing scared governments cut?