After large real estate projects, electricity generation is the biggest consumer of capital among private businesses in Maui County.

There are several costly projects pending, and while some developers say even today money will be available, the closer the project, the further off the lenders seem to be.

Money problems have stalled two projects being pursued by Kent Smith and his partner, Hilton Unemori - a biomass generator at Hamakua on the Big Island that was to have been fueled by eucalyptus wood and an expansion of Kaheawa wind farm on Maui.

"About the time we went to the markets, credit started to freeze up," Smith said of the $200 million Big Island project.

Pacific Biodiesel was planning a 5-million-gallon per year refinery on the Big Island, and even though owners Bob and Kelly King were bringing in their own money for half of it, the relatively small amount of additional money needed is not yet there.

Kelly King said: "Our Big Island Biodiesel plant has taken longer than expected to get fully funded. We are currently seeking the final 10 to 15 percent of funding before we can announce a groundbreaking."

Smith and Unemori's expansion of Kaheawa is being held up more by slowness in reaching a power purchase agreement with Maui Electric Co., but Smith said financing is an issue, even with the financial clout of his much larger partner, First Wind.

Even if the money can be found, the terms and collateral demands are no longer workable. "If the risk-to-return expectations are higher, (the offers) reduce the return to the developer," said Smith, sometimes to the point where it is not worth the effort to go ahead.

Also, lenders won't put up nearly as big a share of the total needed as they would have done two or three years ago.

Smith also distinguishes between finding construction financing and finding a long-term lender. Once the plant is up and selling power - usually to a publicly regulated utility, most of which have excellent credit ratings - the developer can usually find a lender by, in effect, mortgaging his expected revenue stream for decades into the future.

Kaheawa at one point sued MECO because MECO wanted to put Shell Wind ahead of Kaheawa for its next addition of wind power. That lawsuit was settled last year, and the two companies are working on the interconnection and purchase power agreement, though not as fast as Smith would like.

Shell Wind has proposed a 40-megawatt wind farm in Ulupalakua, and MECO President Ed Reinhardt said Shell "is still in the ball game." But Shell in Houston did not respond to a question about whether it remains interested.

Most other proposals are so early in the development process that they can hope that financial conditions will have revived before they need large amounts of capital.

Harry Saunders, president of Castle & Cooke, which would like to build a huge wind farm on Lanai to feed Oahu, said: "We almost have to have a PPA (purchase power agreement) before we go forward."

Besides being intricate contracts with plenty of technical challenges, PPAs have to be approved by the Public Utilities Commission. Castle & Cook is still working on the environmental impact statement, and the state is taking the lead in researching the best undersea cable technology to deliver the electricity, so Castle & Cooke is not in immediate need of large amounts of capital.

It has gone forward on its own on some less expensive projects, including the state's largest solar power installation, in operation on Lanai since December, and an 850-kilowatt combined heat and power unit for the Manele Bay Hotel.

These units generate electricity and use waste heat for heating water.

They can be economical for hotels, especially if they can take advantage of a cheaper fuel, like propane.

However, most hotels are too cramped for them to be practical. On Maui, the Grand Wailea Resort, Hotel & Spa and the Kaanapali Ocean Resort have used them.

The Lanai solar farm is sending 400 to 600 kilowatts into MECO's grid, Reinhardt said, and when he visited on a day when it was necessary to use umbrellas, there was still enough sunlight to generate about a tenth of that amount.

The designed maximum output is 1.2 megawatts, and if Castle & Cook can install battery backup, that could mean a break for Lanai's consumers, who pay some of the highest rates in the country. (The backup is needed more to smooth out the voltage than to feed the grid when the sun goes down.)

Saunders said he had selected and ordered the batteries, but the manufacturer shut down. Now batteries from another source are expected next year.

He said that with Oahu paying about four times the national average for power, and Maui five times, "from our perspective, electricity generation is still very attractive."

Ed Shonsey, chief executive officer of HR BioPetroleum, is planning to use algae grown in ponds on Maui to feed a biodiesel refinery.

If it were ready to build now, it would have trouble finding money. Through May, not a single biotech IPO (initial public offering) had closed this year. Burrill Corp., which helps companies find funding, reported that IPOs, which raised $2 billion in the first half of 2007, have found only $6 million since.

"We at HRBP remain encouraged to proceed with our project and are working closely with our strategic partners A&B, MECO, and HECO to provide our third generation plant for power generation and carbon dioxide mitigation," Shonsey said.

Recently, some of the fund finders HRBP has consulted have detected signs of "breakouts" and are "cautiously optimistic," he said.

For green projects like his, the demand is so great that federal stimulus money will be necessary to help fund the surge.

The interest, he said, was so great that when the government put up an Internet site where companies could submit inquiries, the rush crashed the computer.

"We strongly believe that a combination of environmental improvement coupled with economic returns for our investors and the timing of our project to catch the breakout of funds should hold us in good stead."

The other big biodiesel proposal on Maui, BlueEarth, is stalled by a lawsuit by BlueEarth against its partner, MECO.

Neither Reinhardt for MECO nor Landis Maez, co-managing partner of BlueEarth, would say much because of the litigation, but Maez said the financial situation "could turn around very quickly."

He also thinks cap-and-trade laws to regulate carbon emissions, if passed by Congress, will pique the interest of lenders, because the profits to be made from alternative power will explode.

"I see rates pretty close to doubling," he said. If users of fossil fuels start having to pay a penalty, "any kind of biofuel" will be sought after.

However, BlueEarth did not bid on a MECO request to supply 1 million gallons of biodiesel.

Pacific Biodiesel did, but the Kings have always advocated a smaller approach.

"Regardless of pricing," said Kelly King, "developing a dependence on imported palm oil is not a good idea, economically or environmentally. We feel strongly that this hurts rather than helps the impetus to develop homegrown biofuel crops which is the only way to attain true sustainability."

The other announced alternative energy project for Maui, wave energy by Australian firm Oceanlinx, is still in the environmental assessment stage and not seeking long-term financing yet.