The role of sources of finance on the development of wind technology

This paper contributes to the debate on the competitiveness and maturity of wind technology by carrying out an analysis on research investments and sales of a panel of 10 wind manufacturers over the period 2002-2011, examining the extent to which public and private funding affect the competitiveness of these wind corporations. A group of major manufacturers of wind turbines with production in 2006 totaling more than 70% of the global supplied capacities is considered a representative cluster of green innovative industry for this study. Public support for research, development and demonstration (RD&D), incentives for the production of wind energy and access to credit are the three main sources of finance addressed herein. Corporate debt is the primary factor supporting both wind technology research investment and sales of wind turbines, whereas other sources of finance play a limited role. The reduction in that source of finance has important repercussions for the development of wind energy. The econometric analysis suggests that regulatory risks play a key role for the development of wind technology, even stronger than the financial risk. Thee former originate in unexpected decisions to stop subsidies (e.g. deployment ones), whereas the latter arise from restrictive access to credit.