Many sectors have opted for natural gas instead of clean energy such as solar power.
While drilling for natural gas does not seem like a viable business opportunity for New England at this point, the impact of the shale gas revolution can already be felt in Massachusetts and its clean energy sector, due to the low natural gas prices, according to Boston's WBUR radio station.
Geologists believe that there are sizeable reserves of natural gas in the black shale beneath the Connecticut River Valley but at this point drilling there is not economically profitable. Despite that, the state of Massachusetts is already experiencing the effects of the widespread fracking operations across the country.
Plentiful supplies of natural gas push down its price and many sectors have opted for natural gas instead of clean energy such as solar power. As a result, investment in the green energy sector has started to decline, leading to bankruptcies. According to Rob Day, a venture capitalist at Boston firm Black Coral Capital, this is a crucial time for alternative energy businesses and for the future of the sector. It is estimated that low natural gas prices are likely to persist, as more and more drilling works are launched across the country. However, this means limited market opportunities for alternative energy and this is pushing investors away from green energy projects, he added.
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Day also pointed out that even if clean energy businesses manage to lift off and start growing, low electricity prices at home force them to look overseas to sell their products and build a customer base abroad, where electricity bills are higher and there is rising demand for green energy. But by allowing this to happen, the United States risks losing those companies because they may end up relocating or striking deals with overseas acquirers. Over time, the country might lose its leading position in alternative energy business, he warned.
But not everyone believes that the future of the green energy sector is as bleak as it may seem. One of those people who actually see the shale gas revolution as an opportunity is Frank van Mierlo, CEO of solar power company 1366 Technologies, whose pilot factory is located in Bedford, Mass. Van Mierlo believes that states in which drilling for natural gas and oil is not a priority, such as Massachusetts, can concentrate more on alternative energy and that state authorities can encourage utilities to boost the proportion of energy they source from renewable sources. While the costs for green energy may be higher at present, low natural gas prices are likely to bring down electric bills overall, which in turn might lead more consumers to look at possibilities to use alternative energy.
In fact, natural gas is a very good transition fuel and there is a bright future for U.S. renewable energy, he went on. Van Mierlo predicted that fracking operations will be able to provide the country with cheaper energy for the next two or three decades and said he believed that the United States will use that to invest in power from alternative sources.