Wednesday, June 10, 2009

Brighter days seen for solar, next-gen biofuels

NEW YORK -- Big changes are afoot in the fledgling alternative-energy industry.

As the sector recovers from the 2008 financial market meltdown, insiders look for next-generation biofuels and solar technologies to start joining mainstream energy markets, while wind power continues to lean heavily on government support.

"Grid parity" for photovoltaic technology is imminent, solar executives say, as prices slide and the industry devises marketing strategies to entice both large electric utilities and small-scale customers while slowly freeing itself of government subsidies.

Biofuel executives, meanwhile, speak of an inevitable turn from corn-based ethanol into more efficient cellulosic feedstocks like sugarcane, switchgrass, and wood waste -- all spurred by an infusion of capital from big oil companies and large timber and farming concerns.

Wind power developers, meanwhile, say their future depends on tax credits and other government efforts to encourage investment. Even as solar and biofuel players say they aim to cut production costs to be competitive at current energy prices, wind operators say their customers must accept higher utility bills to support the industry.

"The key is the regulators and customers need to be willing to pay the higher prices," First Wind's chief financial officer, Michael Metzner, told an investor gathering hosted here last week by Lazard Capital Markets. "What you're betting on is the increasing demand for renewable energy."

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