Solar drives global clean energy spending rise

13. April 2012 | Global PV markets, Industry & Suppliers, Markets & Trends | By:  Nicholas Stone

Global clean energy financing grew to record levels of US$263 billion (€200 billion) in 2011, with investment in solar accounting for just under half of the overall spend. The U.S., meanwhile, attracted the highest amount of financing.

Germany solar photovoltaic plant

In Europe, Germany ranked third among the G-20 with $30.6 billion and 7.4 GW of solar power installed.

According to new research released by the Pew Charitable Trusts, solar attracted $128 billion (€97.2 billion) in investment last year. This represented an increase of 44 percent on 2010, as dramatic price declines fueled the rising activity.

"Solar module prices fell 50 percent in the past year, spurring deployment of an unprecedented 29.7 gigawatts (GW) of new capacity," the report said. "This is ten times the level recorded in 2007."

More than half of all clean energy investment among members of the Group of Twenty (G-20) countries was directed to solar. These dropping prices and competitive marketplaces compensated for some of the weakening clean energy support mechanisms, according to the research team.

"Clean energy investment, excluding research and development, has grown by 600 percent since 2004, on the basis of effective national policies that create market certainty," said Phyllis Cuttino, director of Pew’s Clean Energy Program. "This increase was due in part to the number of countries that have implemented effective national policies to support the clean energy market."

Country by country

The United States attracted the highest amount of clean energy financing, with $48 billion (€36.4 billion), taking back the top spot from China. Investors took advantage of the country’s stimulus programs before they expired at the end of 2011, as well as the production tax credit for electricity from renewable energy, which ends in December this year.

With 1.7 GW of solar installed, it also marked the first time the U.S. surpassed one GW of installations in a single year. The U.S. government allocated $30 billion (€22.8 billion) of the total spent to the solar sector, much of it to initiate large, utility-scale projects that will come online from 2012 to 2013. The $30 billion invested in solar was the highest figure in the world.

The Chinese came in second place, attracting $45.5 (€34.5 billion) billion in clean energy investment. This included $11.3 billion (€8.6 billion) going to the solar sector. The year also saw the establishment of policies that should accelerate solar investments in the future, with a revised national target of 50 GW installed by 2020.

"To help achieve these targets, China adopted its first national feed-in tariff for solar projects in 2011," the report says. "Provincial governments are also looking for opportunities to harness solar energy sources. China’s national and provincial interest in solar technologies could be important to the worldwide solar industry if anticipated demand decline in Europe is to be offset in 2012."

In Europe, Germany ranked third among the G-20 with $30.6 billion (€23.2 billion) and 7.4 GW of solar power installed. Italy, with a 38.4 percent increase on investment from 2010 enabled creation of a record and world-best of nearly eight GW of solar generating capacity. Over the past five years, no G-20 country has experienced greater investment growth rates than the Mediterranean nation, which also posted world-best investment levels relative to the size of its economy.

However, the favorable conditions that helped grow these large-capacity additions will be stymied in the future, as clean energy incentives are reduced in 2012 and beyond in the two European powerhouses. 

In the wake of the Fukushima nuclear disaster, Japan’s solar investments surged to more than $8 billion (€6.1 billion).

In Australia, 82 percent, or $4 billion (€3 billion) of the total investment in clean energy went to the solar sector, primarily for small residential projects, which accounted for 700 megawatts (MW) of the one GW of clean energy added in the country in 2011.

Spurred on by the National Solar Mission, with a goal of 20 GW of power installed by 2020, India’s clean energy sector continued to flourish in 2011. This helped investment in solar rise sevenfold to $4.2 billion (€3.1 billion).

Brazil, the current darling of global growth rates, ranked 10th in the G-20 for green spending. Clean energy investment in the country increased by 15 percent to $8 billion (€6.1 billion), but failed to keep pace with other growth markets in the country.

Further good news

Asset financing, typically associated with the installation of clean energy equipment and generating capacity, is often used as a barometer of the success of clean energy. Solar energy received $51.5 billion (€39.1 billion) in asset financing last year, which is almost double what it received in 2010.

Residential-scale solar projects of less than one MW increased 25 percent in 2011 in G-20 countries. Investment in this kind of small-distributed capacity has grown by 900 percent over the past five years, reaching a record $71.5 billion (€54.3 billion) in 2011.

The solar market also attracted $2.6 billion (€2 billion) in venture capital, although this ranked it behind energy-efficient low-carbon technologies.


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