Newspaper article The Christian Science Monitor

Has Renewable Energy Hit Hard Times?

Newspaper article The Christian Science Monitor

Has Renewable Energy Hit Hard Times?

Article excerpt

Just last summer, renewable energy was considered a booming industry.

Stock prices were on an upswing, investors like Hewlett-Packard, Berkshire Hathaway, and Dow Chemical were coming to the table, and President Barack Obama announced a plan to triple renewable energy capacity in federally subsidized housing and make wind and solar energy more accessible to low- and middle-income households.

But optimism is fading alongside sinking oil and gas prices.

SunEdison - which was on course to become the world's biggest renewable energy developer - told investors last week how it plans to reverse the nosedive of its stock price and regain investor trust.

The announcement comes at the tail end of a two year glut in which SunEdison spent or pledged more than $4 billion to buy rival clean energy companies and spun off two separate companies. The company's debt spiked to $10.7 billion to fund its many acquisitions, including $2.4 billion to buy First Wind, a US-based wind farm operator, and $2.2 billion to buy solar panel installation company Vivint Solar, The Wall Street Journal reports.

Investors had particularly soured on SunEdison's strategy of developing new wind and solar farms and then selling them to the companies it spun off, TerraForm Power Inc. and TerraForm Global. Both were formed to return reliable dividends to investors, neither have done so. Stock prices have plunged in recent months as investors have begun to question the companies' business model.

After its debt-producing two-year sprint, the energy company told shareholders last week that the firm will cut some 15 percent of its workforce, not sell any more projects to spinoffs TerraForm Power and TerraForm Global, reduce project development by 20 percent to cut costs, and pull stakes from business interests in Britain.

"We need to adjust our tactics, at least in the short to intermediate term," Ahmad R. …

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