RENEWABLES DIVE IN THE WAKE OF LEHMAN BROTHERS, AS AN EBBING TIDE LOWERS ALL BOATS

It has been a rough week in the markets, and things only got worse in the wake of investment bank Lehman Brothers' bankruptcy.

While a rapidly ebbing tide lowers all boats, the fall for clean energy shares has been steeper than in the broader market, with the WilderHill New Energy Global Innovation index of clean energy shares - or NEX for short - plunging some 7.5% over the past week compared with the approximately 5% drop in the Dow Jones Industrial Average by late Monday. The pain was felt broadly across the clean energy sector with solar, wind, and biofuel firms all taking a hit. Evergreen Solar suffered the largest loss on Monday, on a percentage basis. The Massachusetts-based solar PV equipment maker saw its shares fall USD 1.79, or 28.4%, to end the day at USD 4.51. Chinese firm JA Solar was off USD 2.42, or 18.5% to end at USD 10.68. California-based SunPower's stock dropped USD 10.19, or 12.3%, to close at USD 72.50.

It is worth taking a look at the renewables companies in which Lehman played a direct role. Lehman is by no measure the biggest player on the renewables block, but it is the third most active arranger in the US tax equity market - behind JP Morgan and General Electric Energy Financial Services - and has participated in a handful of clean energy equity deals. US-based wind developer First Wind, for one, will have to lean more heavily on other tax equity investors following Lehman's collapse.

First Wind said in a July 2008 regulatory filing that it had signed an agreement with Lehman for USD 208m in tax equity financing for its Steel Wind I, Cohocton I and Prattsburgh I projects. The company did not immediately respond to New Energy Finance's questions about its financing plans now that Lehman is out of the picture.

Lehman also held a 9.7% stake in Clipper Windpower as of the company's 2007 annual report, and a 6.8% stake in geothermal developer Ormat Technologies as of 16 May 2008.

Lehman was also listed as one of four underwriters for wind project developer Noble Environmental Power's planned USD 375m initial public offering. The company did not immediately respond to questions about whether other underwriters Citi, JP Morgan and Credit Suisse would now pick up Lehman's slack under the offering.

NEF_Week_in_Review_2008-09-16.pdf