This may be a better time than ever for renewable energy. The climate for passing laws that would create subsidies for it are promising: last year, the Production Tax Credit for wind power was extended, along with a hefty longterm-Investment tax credit for solar power. A loan guarantee program was put into place (although it was subsequently raided to finance the "cash for clunkers" program). Last week, Treasury Secretary Tim Geithner and Energy Secretary Steven Chu announced more than $500 million of grants, mostly for wind-project developers, as the first phase of a $3 billion grant program for developing renewable energy. This and the $2.3 billion Advanced Energy Manufacturing Tax Credit are expected to help build the wind-energy sector.

But Bruno Mejean isn't feeling the winds of change just yet. The managing director and deputy general manager of Nord/LB, New York, a German financial institution, Mejean is on the front lines for financing large utility-scale solar and wind power projects. (Among the top 20 banks lending funds for renewable energy, Nord/LB and three others are German; only one American institution -- ING Bank -- makes the top 50.) Mejean anticipates obstacles for the wind-energy sector in particular, and the biggest drag on developing renewable-energy projects, he says, is the prospect of a longterm low price for natural gas.

A recently discovered supply, stretching from Texas to Pennsylvania, could last as long as a hundred years -- and could harm the wind-energy movement. The price of natural gas recently plunged below $3.00 per million BTUs, as DailyFinance's Joseph Lazzaro has reported -- and energy companies are still drilling for it.)

Here, Mejean speaks with DailyFinance about the wind and solar marketplace, the upcoming Congressional debate over the Waxman-Markey bill, and the fate of T. Boone Pickens.

Q: As we emerge from this recession, what are the top-of-mind issues for the renewable-energy landscape?

A: We're not out of the woods. There's definitely more activity than there was a year ago. But the lending business is suffering the same slow restart that the rest of the economy is witnessing. Banks are slowly fixing their problems, getting back into business, and renewables are hot. Most of the project finance lenders are recycling themselves into the renewable-energy sector. That's the fashionable thing to do. And hopefully, the stimulus through the Department of Energy support will find its way to the sector. But that's taking a lot longer than people expected.

Q: When you look at the Department of Energy figures, only 1.1 percent of the stimulus money allocated to the sector has been spent.

A: And they're going as fast as they can. You have to give them credit for trying. The only issue is that people expected them to be a lot faster, and that was an unreasonable expectation. I mean, you have to do due diligence for our tax dollars, but that takes time. We think the impact of the stimulus money will only be felt in earnest starting the beginning of next year.

Q: There has been much discussion of the Waxman-Markey bill, which contains a provision for a national renewable portfolio standard, the Renewable Electricity Standard. What's your assessment of that?

A: Unfortunately, I'm not very optimistic. The RES and cap-and-trade provisions are wet fuses, because it's happening in the depths of the recession, and Congress is very reluctant to pass any measure that has real teeth. The timing is lousy for these initiatives, and therefore they have to be as weak as they are, and so it won't really make a difference. Unfortunately, coal will still be king as long as the current situation continues.

Q: What are some other emerging drivers crucial to wind and solar?

A: We've seen a major drop in costs, especially in the solar arena. As panel costs have gone down significantly, it's changing the dynamic of the solar industry, which is ready to take off. But states are running out of money to subsidize renewables, and natural gas prices are low, so there's no economic incentive to go to alternative energy. It only makes sense to push renewable energy when natural gas and coal prices are higher than right now.

Q: That brings to mind T. Boone Pickens. In 2007, he was going to save the world with projects like his big wind farm in Texas. Some say he failed because his business model was flawed -- that his wind farm was a merchant operation that needed the price of natural gas to remain high. Why do you think he failed?

A: Pickens didn't expect natural-gas prices to go as low as they are. That killed the economics of any type of merchant project. The concept of merchant power is definitely flawed; in this market, the only way you're going to get financing for a big wind project is with a longterm contract, but a merchant operation by definition doesn't call for longterm contracts. The other flaw in his model was to expect that people would build huge north/south-east/west transmission corridors that would link the Midwest. That was a huge bet, and a very costly one. So he lost his bet, and now I understand he's trying to sell turbines in association with GE.

Q: T. Boone Pickens is selling wind turbines?

A: He had contracted to buy a fair amount of wind turbines, and now he's not going to use them, but GE wants an orderly disposal of them. Whatever sale Pickens makes will be made in coordination with GE, because GE doesn't want to be competing with Pickens's turbines in marketplace.

Q: What other trends to you see in renewable energy?

A: Solar will be especially strong when the economy rebounds and natural gas prices go back up. I see that as the result of major cost savings that have occurred in the last year. Some PV module prices have gone down by a factor of 40 percent. Usually there is a January 1st price-reset date for those contracts. And so in January we will see a major drop in prices of modules throughout the whole sector in the U.S. and in Europe. That will be quite attractive. Even in Germany, solar should get a big boost, because, while the feed-in tariff should eventually drop by about 10 percent, the actual solar-module prices will drop by 40 percent. All of a sudden, projects that may have been marginal this year will be financed next year.

Q: Isn't that part of the whole feed-in tariff idea: that tariff prices decrease over time, which spurs efficiencies -- and lower production costs -- in manufacturing?

A: Exactly. For solar developers, the price drops are bigger than was expected.

Q: The American Wind Energy Association claims that wind development is the biggest it's ever been, that the wind industry might help rebuild the American manufacturing base, and that the percentage of wind-turbine components being manufactured in the states is increasing -- which suggests the possibility of a significant number of green jobs.

A: There's some truth to that. A lot of European wind-turbine manufacturers have set up shop in the U.S. -- they see this as a very big market. That's good news; transportation costs being what they are, and the foreign exchange between the euro and the dollar being what it is, it makes sense to build here.

Q: The worry is that there isn't a strong enough economic signal on the part of the U.S. government to the foreign players to bring their industry to the US. Many believe that the quickest, most efficient way to do that is to have a meaningful RES.

A: Of course it will help. But is it necessary? No. It's a big platform point for AWEA. Am I against it? Of course not. If you can get it, sure. Should it be limited to wind? No. It should cover all renewable energies. But the expectation for a RES should be mild because of the recession. It's going to be like the climate-change bill. It's not going to be very strong, in terms of penalties. Don't expect $400-a ton carbon. It's going to be very mild. In my view, state-run Renewable Portfolio Standards will drive the business for the next three years.

Q: When you say that an RES is helpful but not necessary, is that because the wind resource is so strong in the U.S. that it will support manufacturing in the longterm?

A: Yes and no. More important would be a climate-change bill, because that will set up a meaningful price for carbon. But the key issue to drive the business is the cost for alternative energy for power generation, which is natural gas, for the most part. Natural-gas prices will be a lot more important than any RES or climate-change bill in the short term. Natural gas really is the determinant. As long as it's low, utilities are not going to sign up for higher wind or solar energy prices, because they have a cheaper gas alternative. That's really the challenge in this sector, more than anything else.

Mark Svenvold, author of Big Weather: Chasing Tornadoes in the Heart of America, teaches at Seton Hall University in South Orange, New Jersey.