Global solar investment strong, says BNEF

11. July 2012 | Industry & Suppliers, Markets & Trends | By:  Becky Beetz

Investment in the solar industry continues to grow, despite continued economic pressure. Publishing its latest findings, BNEF said that of the US$59.6 billion invested in the global clean energy sector in the second quarter (Q2) of 2012, solar accounted for $33.6 billion. Meanwhile, the importance of small-scale projects is said to be increasing.

General rooftop solar photovoltaic system

The importance of small-scale photovoltaic projects, particularly in the rooftop sector, is said to be increasing.

While the clean energy investment figures are strong, and represent a 24 percent increase on Q1 2012, levels still fell short of the $72.5 billion reaped in Q2 2011. Furthermore, the figures "show a clear split between investment in clean energy technology and equipment providers – which remained depressed in Q2 in the face of world economic and stock market troubles – and generating asset investment, which held up well," said Bloomberg New Energy Finance (BNEF).

Leading the clean energy investment push is China, which at $18.3 billion, saw a 92 percent increase in investment compared to Q1 2012. Reportedly, the largest Chinese photovoltaic project financed was the Shanlu & Shengyu Bayannur Wuyuan plant, at $316 million.

Michael Liebreich, chief executive of BNEF explained, "China has recently quadrupled its domestic goals for solar installations. And it has been by far the biggest market for wind turbines for several years. These figures underline the pivotal role China is playing in the clean energy sector. Its torrent of supply-side investment was one of the main reasons why renewable energy costs have been plummeting; we are now seeing China creating enough demand to start mopping up some of the resulting over-capacity."

Meanwhile, BNEF said that both Europe and the U.S. saw "solid but less spectacular gains" of 11 and 18 percent, respectively. Overall, Europe was said to have seen clean energy investment totaling $20 billion, and the U.S., $10.2 billion. 

In related news, California-based investment bank, Peachtree Capital Advisors said today in its 2012 mid-year greentech M&A review that in the first half of 2012 (1H12), solar M&A (merger and acquisition) activity in the U.S. reaped a total of $777 million – a 75 percent decrease on the same period in 2011, which pulled in $3.07 billion. Despite this, the actual number of transactions rose by 22 percent, to 44. Meanwhile, investors injected just $698 million in the solar industry in 1H12, compared to $1.6 billion in 1H11.

Looking to the various investment sectors, BNEF went on to say that public market investment reached $1.2 billion in Q2 2012, which although represents an almost 50 percent increase on Q1, is still 75 percent less than the figures seen in Q2 2011. Venture capital and private equity investment was also said to be "subdued", having fallen 28 percent and 39 percent from Q1 2012 and Q2 2011, respectively, to hit $1.5 billion.

The shortfall was said to have been made up from the asset finance of utility-scale renewable power and fuel projects, however, which reached $35.9 billion in Q2 2012, up 50 percent from Q1, but still 24 percent lower than in Q2 2011. 

Small-scale

As has been reflected in the changing solar subsidies in key solar countries, like Germany and Italy, small-scale photovoltaic projects, particularly in the rooftop market, are gaining in importance. It further believes that the sunbelt will see small-scale project expansion. Liebreich commented, "Germany and Italy remain the largest markets, but small-scale PV is now broadening its geographic base, with installations in the US, Japan and China all growing strongly. We see further expansion across the sun-belt as costs continue to come down."

According to BNEF, clean energy projects under one MW were estimated to be worth $21.5 billion in Q2 2012, up 13 percent on Q2 2011.


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