Investment in renewables starts to thaw

London - The recent 'impasse' on credit facilities for the renewables energy sector is starting to ease, according to market ratings firm Standard and Poor Equity Research. The "thaw", it says, is particularly good news for smaller players and has eased the supply chain bottlenecks for larger players.

S&P, however, warns that as levels of project financing are far below market peaks, growth in renewables is likely to slow under the current burden of bureaucracy on government support in the short term. In the long term though, the renewable energy sector is forecast to become a vital energy source for the world's major economies, as seen in acquisition and investment activity by traditional power utilities.

"We believe several countries in Europe, including the UK, will need to step up investment in renewable energy in order to meet EU requirements that at least 20% of energy generation comes from renewable resources by 2020," said S&P. "As traditional power sources have attracted higher emission costs, production costs have fallen for various forms of renewable energy, which we believe will increasingly become a more competitive alternative."