Cleantech Index Hits 9-Year Low

Brian Hicks

Written By Brian Hicks

Posted July 30, 2012

There hasn’t been a lot of positive news in the clean energy sector lately. A mix of oversupply produced by multiple competing firms, worldwide economic turbulence, hesitant government involvement and guidance, and cheap foreign products pushing down prices is responsible for the gloomy conditions pervading clean-tech.

Symptomatically, the WilderHill New Energy Global Innovation Index (NEX) dropped to $102.40 last week. This marked the lowest point in nine years, the fourth straight decline, and an overall decrease of 19 percent this year alone.

The NEX is an index of cleantech companies and gives a measure of around 96 wind, biofuel, solar, and other clean energy companies.

Joseph Salvatore, an analyst with Bloomberg New Energy Finance, told Bloomberg:

“There is certainly a risk element to the sector. There is a lot of policy uncertainty, which is not good for an industry that is still heavily reliant on government support.”

Ironically, this nosedive is taking place on the NEX even as Standard & Poor’s 500 rises consistently, up a little over 6 percent so far this year. The reason, of course, is that jittery investors are flocking to ‘safe’ stocks and moving away from industries and sectors perceived as risky, or speculative at best. Clean energy falls largely in that category at present.

Among the varied performances on the NEX, Dialight Plc. (LON: DIA), a U.K. manufacturer of LEDs, posted the best performance with a 30 percent gain in the face of increasing demand for the highly energy-efficient products.

Conversely, First Solar Inc. (NASDAQ: FSLR) posted the worst performance with a loss of 88 percent. First Solar makes thin-film solar panels, and that area has taken a battering in the market.

There is also an air of uncertainty and drama brewing as the U.S. government continues to investigate Chinese-made solar panels over concerns of quality and artificial price suppression. This comes after high import duties already levied against those panels.

The current climate makes it likely that we’ll see a few quick acquisitions, according to Andrew Musters of SAM Group Holding AG, as larger companies with more diversified portfolios may seek to add some renewable technology firms to their holdings.

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