Commercial Loans

• One common means of financing alternative energy ventures is with a commercial loan. There are boutique lenders who specialize in working with "clean tech" firms in developing alternative energy projects. In some instances, the finance company will work with every phase of development, beginning with business planning. Loans can also be obtained to buy the real estate necessary for the actual placement of alternative energy projects.
  
  

Government Subsidies

• Government subsidies were a significant factor in enabling Germany and Spain especially to make tremendous advances in alternative energy, especially solar energy. For Germany, the advances focused on solar energy technology. Spain took advantage of generous government subsidies and a sunny climate to gain prominence in solar energy projects. However, with the global financial crisis late in the first decade of the 2000s, Spain drastically cut its government subsidies for alternative energy.
  
  

Venture Capital

• Venture capital is also a common source of funding for alternative energy projects, especially in the beginning phases. Venture capital has become increasingly important as government subsidies have dwindled and commercial credit has tightened. Venture capital is also a very prominent source of funding for solar projects, which typically require huge cash investments to get off the ground.
  
  

Equity Financing

• Some companies turn to equity financing in difficult economic times. Equity financing is calculated by determining the market value of a company or venture and subtracting any financial claims against it. For those companies with significant equity, those funds can be used to maintain projects already underway. It's less common for equity funding to be used to finance expansion or new projects, with the exception of research and development.
  
  

Considerations

• A major expense in alternative energy projects is securing the land on which to construct the large wind farms or expansive solar panel fields necessary to generate energy in commercially feasible amounts. Hard money, or money for which the collateral is the property being funded (most often real estate), remains available as a financing source for alternative energy projects. In challenging economic environments, many alternative energy projects will likely be the product of cooperative agreements between groups of companies.