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Can Utilities Fill the Green Energy Finance Gap?

But Mac Irvin, managing director of structured finance for SunPower Corp. (SPWRA) suggested that another part of Congress' renewable energy bill -- the part that allows utilities to take advantage of the incentives -- could help ease that crunch.

"The recent doom and gloom conversation around tax credit investment... is greatly overblown," he said. "The entrance of utilities into this space, in my view, will increase the availability of tax equity."

Irvin's not the first to wonder how the entrance of utilities could impact renewables, especially solar power. (Don't miss "Solar Companies and Utilities: Friends or Foes?") As of yet, renewable-energy executives don't have a clear answer to that question.

Using what he warned were rough calculations, Irvin said that the 30 largest U.S. utilities could find the appetite for up to $5.4 billion in tax-credit equity investment in 2009, roughly equivalent to the amount invested in wind-power projects in 2007.

"Utilities may take us up on that suggestion, they may not," Irvin said in an interview after the panel discussion, noting that he hadn't calculated what the potential loss of tax-credit investment from the financial crisis might be.

When it comes to solar power specifically, the certainty that comes with the eight-year investment tax-credit extension could also draw in utilities that have until now been "standing on the sidelines," he said.

Kevin Walsh, managing director of renewable energy for GE Energy Financial Services [a division of GE (GE)], noted that despite "significant capital constraints" facing renewable energy projects, "This is not an issue where there have been massive losses in wind or solar portfolios. These are good solid assets." (Don't miss "Energy Business Boosts GE; Solar Stocks Battered")

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