Clean-energy investments off 22 percent

DENVER – New global investment in clean-energy companies fell 22 percent in the third quarter as government financing was offset by tight credit markets, according to new research released Friday.

From July to September, new global investment totaled $25.9 billion, down 22 percent from a year ago and off 9 percent from the second quarter, according to London-based New Energy Finance, a global research firm.

But the sector appears to be heading toward a recovery, with investment nearly double what it was in the first quarter and investors growing more confident.

Many analysts think a turnaround will come in 2010 but caution that much depends on the U.S. economy, the health of the financial sector, natural gas prices and even electricity demand.

Asset financing, a key measure for solar and wind projects, fell 26 percent to $19.2 billion. Venture capital and private equity investment dropped 46 percent to $2.2 billion.

The third-quarter total, however, was nearly double the $13.3 billion recorded in the first quarter, said Ethan Zindler, who heads New Energy’s North American research arm.

“Activity has certainly bounced off of Q1 (the first quarter), which was just when things came to a grinding halt,” he said.

“I think the market has recognized that this industry is getting substantially more support from the federal government and other governments around the world,” he said. “I think that helps bolster confidence as well.”

Renewable energy is a small fraction of all power used but has gained favor globally as governments and businesses seek to curb pollution and the use of fossil fuels.

The industry lost momentum as access to credit markets dried up, natural gas prices fell and electricity demand diminished. Some companies were forced into bankruptcy while others shelved plans and cut jobs.

Billionaire oilman T. Boone Pickens put his plan to build the world’s largest wind farm on hold last year amid the downturn and scrapped the plan altogether in July because of problems in getting power to a distribution system.

Many believe the industry will see immense growth in the coming years as utilities push to meet mandates to provide a percentage of electricity from renewable resources.