The embattled wind industry remains economically viable even as higher costs and tougher markets drag down the world’s largest renewable energy companies, according to the chief executive of Macquarie Group Ltd.

The industry has “cracked the code on bringing the cost down to be competitive with alternatives,” CEO Shemara Wikramanayake said on Friday at the Bloomberg New Economy Forum in Singapore. “We’re having a little bit of a retracing in places where we have cracked the code, but not to the point where it’s not viable.”

Investors in renewable energy assets have suffered deep losses this year, with the S&P Global Clean Energy Index down more than 30%, led by selloffs in wind giants including Orsted A/S. The situation has attracted short sellers in anticipation of further declines, and even some prominent ESG investors are warning of more pain ahead.

The wind industry is reeling from higher borrowing and component costs, making it harder for developers and suppliers to secure financing at profitable margins. Orsted, which is the world’s largest developer of offshore wind farms, has said it’s ceasing the development of some US projects as it announced a third-quarter net loss.

Read more: Global Wind Industry Is Going Through a ‘Reset,’ Vestas CEO Says

“Some of the benefits we’ve gotten bringing costs down are being reversed,” Wikramanayake said. The UK’s recent renewable energy auction, at £44 per megawatt hour, did not attract any bids, “and that’s reflected the costs have gone up,” she said.

“But I think the wholesale price of energy in the UK is about £80 per megawatt hour, so they can afford to go to £50 for offshore wind and still bring on offshore wind,” she added. “This reversal, it’s bad but it’s not the end of the world.”

Even so, several hedge fund managers are actively betting that the wind industry faces more losses, with a recovery expected to be years away.

Global offshore wind cumulative capacity is on track for eightfold growth by 2035, according to BloombergNEF analyst Chelsea Jean-Michel. But countries installing the technology face several obstacles, including rising costs and supply-chain bottlenecks, she said.

Wikramanayake said the US Inflation Reduction Act is being held up by permitting delays, lack of grid infrastructure and guidelines. “The IRA subsidies are great, but you need a lot more to roll it out,” she said.

Mark Carney, chair and head of transition investing at Brookfield Asset Management, called the IRA a “game changer,” while speaking on the same panel. Its predictability over the next decade means it’s driving a large amount of investment, with the potential to hit $3 trillion, he said.

“With the exception of China, no other country has the resources and the capabilities of the United States,” Carney, who is also chair of Bloomberg Inc.’s board, said.

The New Economy Forum was organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.