Clean Energy Meltdown: Now GE’s Bailing

Meltdown watch, continued. Capital is quickly drying up for new clean-energy projects, and what is available costs more, throwing a wrench into companies’ plans to expand renewable energy.

General Electric is the latest to throw in the towel, after the abrupt departure of Lehman Brothers and Morgan Stanley. The conglomerate, which makes energy gear like wind and gas turbines as well as underwriting renewable-energy projects, says it is bailing out of the clean-tech investment game for now, once it finishes with existing projects. From Dow Jones Clean Tech Insight:

“Right now we can’t price a deal,” said [GE Financial Services managing director Timothy] Howell in an interview with Clean Technology Insight on the sidelines of the Solar Power International conference in San Diego, Calif. “We can’t go out and borrow. So we can’t commit to a deal today.”

GE Financial Services, like GE’s energy-infrastructure unit, was very bullish on the sector’s prospects just a few months ago. Most clean-energy projects like wind and solar power depend on investments by companies like GE or big banks, which put up development capital to get their mitts on years of tax breaks. That’s the main way that tax credits help fuel the growth of alternative energy.

But while the financial bailout bill extended tax credits for clean energy, the bill hasn’t yet goosed the credit markets into lending freely. That—not uncertainty over federal subsidies—has now become clean-energy’s bogeyman.