Green-tech investment falls 50%, but it’s no time to worry

The first quarter of 2009 saw a sharp decline in all forms of investment in clean-tech and energy both compared with a year ago, as well as the fourth quarter of 2008. Overall, the $13.3 billion invested was down 53% from the previous year and 44% from the last quarter. Investments in new renewable-energy projects led the decline, with venture capital investments also dropping 22% and a near evaporation of all investment in pure-play clean energy companies. However, this raw figure does not tell the entire story for the industry, nor is it necessarily indicative of a trend.

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Looking at new plug-in hybrid tax credits

Hidden in the $700 billion “bailout” package is a brand new set of incentives intended to encourage the development of plug-in hybrid technology.  The program can potentially give more than double the incentive previously given to buyers of hybrids.  The law states that plug-in electric cars with at least a 4-kilowatt-hour battery pack will be eligible for a $2,500 credit.  The credit will increase with every kilowatt-hour of capacity with a cap of $7,500.  The program will last through 2015, and will phase out after 250,000 models are sold.  This low-risk program will only cost taxpayers less than $2 billion.  Nonetheless, we should take a look at how effective it will be at encouraging the diffusion of these cars into the U.S. auto fleet.

AP
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