Searching for Deeper Pockets

Amid tight credit and tough market conditions, clean-technology companies without large backers are looking to better-capitalized suitors. This trend became apparent in the solar-power industry over the past few weeks.

“There are a lot of thinly capitalized developers who are struggling to figure out how to develop projects,” says Arno Harris, chief executive of Recurrent Energy Inc., who sees that weakness as a buying opportunity.
Meanwhile, in another sign of tight credit conditions hampering smaller companies, PG&E Corp. said recently its utility may step in to take ownership stakes in renewable-energy projects from which it hopes to get power.

“We are afraid our counterparties won’t deliver” due to the capital constraints in today’s economy, Peter Darbee, chairman, chief executive and president of the San Francisco company, said in an interview.

The ethanol and biofuel industries are struggling with a combination of high feedstock costs and relatively low prices for their output fuels — pushing many companies into filing for bankruptcy protection.

But companies developing technologies to produce fuels from nonfood sources are still attracting investment interest and are moving ahead with growth plans.

Wall Street Journal (through Google News)