Global investment in clean energy falls 12%, despite 20% increase for solar

17. January 2014 | Markets & Trends, Investor news, Global PV markets, Industry & Suppliers, Top News | By:  Ian Clover

Findings from Bloomberg New Energy Finance reveal a 41% slump in investment across Europe, while Japan's solar-fuelled clean energy landscape saw a 55% surge in investment.

A solar farm in Spain.

Despite falling investment figures, solar capacity worldwide actually increased by 20% in 2013.

Figures released this week by Bloomberg New Energy Finance show that global investments in clean energy fell by 12% in 2013 as falling PV costs and unsteady investor confidence continued to erode the sector’s previously impervious growth.

After falling by 9% in 2012 following a record year of investment in 2011, the top-line figures for 2013 – a total of $254 billion was invested in clean energy last year – obscure the true picture, however. Although investment in solar fell from $142.9 billion in 2012 to $114.7 billion last year, the market’s volume actually increased by as much as 20% thanks to falling solar system costs and an increased focus in newer and cheaper emerging markets.

Japan, meanwhile, bucked the trend completely, plowing $35.4 billion into its clean energy sector – an increase of 55% on 2012. This investment growth has been largely rooted in small-scale solar installations, which are seen as the easiest, safest and most reliable replacement for the nation’s now-redundant nuclear energy capabilities.

Buoyant investment in Japan was offset by continued contraction in Europe as the continent's leading economies for renewable energy development – Germany, France and Italy – all tightened their belts, rolling back subsidy payments throughout the sector (particularly in solar) and failing to reach political unity, which spooked investors.

In the other leading markets, China's clean energy investment fell a mere 3.8% from $63.8 billion in 2012 to $61.3 billion. A small drop, but the first recorded contraction in Chinese renewable energy investment for more than ten years. In the U.S., investment fell to $48.4 billion, an 8.4% reduction on the $53 billion invested last year.

"A second successive year of decline in investment will come as unwelcome news to the clean energy sector, but the top-line figures don't tell the whole story," said Bloomberg New Energy Finance's founder and chairman, Michael Liebreich. "Investment in Europe crashed, in large part because of the falling cost of solar installations, whose volume worldwide actually grew by around 20% to a new record."

Solar still leads the renewable revolution
The fortunes of solar are inextricably linked to the performance of the global renewable energy market. With investment in the sector falling, figures across the board are dragged down with it, such is solar’s influence in the clean energy market.

However, solar remains the leading choice for clean energy investment, with $114.7 billion spent on the industry in 2013. Despite that figure representing a significant fall on 2012, investment in wind power, by comparison, stood at $80.3 billion. A little farther back was investment for energy smart technologies such as storage and smart grid, which attracted $34.6 billion, while the biomass and waste-to-energy sector received $8 billion of investment – down from $13.8 billion in 2012.

Solar's fortunes were boosted by Latin America, which saw four nations – Brazil, Chile, Mexico and Uruguay – each invest more than $1 billion in clean energy, with Brazil alone pouring in $3.4 billion. The majority of this investment was spent on solar systems.

In Europe, Spain, France and Germany all saw sizable reductions in their renewable energy investment, with only the U.K. managing to almost match 2012’s figures – the Brits spent $13.1 billion on renewable energy last year, down from $14.3 billion the year before.


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