Expert Predictions: Energy | What's the outlook for green energy companies?
A number of factors will affect the prospects for green energy companies in 2010, but ultimately all of them are tied closely to the fate of the economy as a whole.
That's according to Michael Radzicki, a Worcester Polytechnic Institute economist.
Radzicki said the most significant predictor of alternative energy stock prices is the price of oil.
"When oil prices are low, people say ‘eh, what's the urgency?'" he said.
He said if oil prices rose to $100 a barrel, that could trigger new interest in green energy. But oil will only rise that much if the economy grows significantly.
"In one sense the answer to the question is, when is the recession going to be over and when will we see a robust recovery?" Radzicki said. He said his best guess is that it won't be until at least the middle of 2010.
Radzicki said another aspect of oil prices is the value of the dollar, since oil is priced internationally in dollars. If the U.S. keeps interest rates low, the dollar, and therefore oil, will likely remain relatively cheap. And the Federal Reserve isn't likely to raise interest rates until the economy grows.
Radzicki said a final factor he considers important is possible "cap and trade" legislation to reduce carbon emissions.
But Radzicki said even that political question ties into the economy. A protracted recession could hurt the Democrats in the 2010 mid-term elections, he said, and if that happens the legislation will be less likely to pass.
Despite some setbacks in 2009, the Massachusetts Executive Office of Energy and Environmental Affairs has high hopes for the coming year.
Secretary Ian Bowles said Marlborough-based Evergreen Solar will continue to be an "anchor" for the state's solar power industry, despite its recent decision to move much of its production from Devens to China.
"It is important to note that Evergreen originally promised to maintain 350 jobs in Massachusetts, and they are currently at 925," Bowles said.
Even after many of those jobs go overseas, he said, the company expects its staffing to remain above its original commitment.
Department spokeswoman Lisa Capone said employment in solar manufacturing and installation in the state doubled between 2007 and 2008 and is on track to grow another 50 percent by the end of 2009. Jobs at energy efficiency firms also grew 40 percent last year and should jump another 50 percent this year, she said.
Bowles said the state was disappointed that Westborough battery maker Boston-Power did not receive federal stimulus funds to build a new factory in Auburn, but he said public officials will keep working with the company in the hopes of bringing such a plant to the state.
Capone cited Boston-Power and Evergreen Solar, as well as Marlborough hydroelectric and wind energy company Brookfield Power, Beacon Power Corp. of Tyngsborough and GreatPoint Energy of Cambridge, as bright spots in the current rough economy.
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