New installed wind capacity will increase by only 14 percent globally this year, according to market researcher Emerging Energy Research. Accenture estimates that wind power capital expenditures over the next to years could drop by as much as 30 percent, BusinessWeek reports.
Last year, the ISE Global Wind Energy Index dropped 56 percent. Shares in Vestas and Gamesa, major global turbine suppliers, are also down by more than two-fifths over the same period.
Financing wind projects used to be fairly easy, but the global economic downturn has made banks stingier with their lending plans, pushing many independent energy producers out of the market. Demand for wind turbines falls as a result, and as in some cases in Europe, turbine producers have been forced to cut prices or take smaller profit margins to offload unsold inventory, or be forced to shut down their plants altogether.
Analysts say that until President-elect Barack Obama offers more details about his plan to invest in green energy, investors will shy away from the wind energy sector.
Just last October, demand for wind turbines was so great that some projects were even delayed due to a shortage.