Despite the forecasted growth for the photovoltaic sector, it will not be enough to absorb all of the over-capacity, says the report.
This decline in investments is due to policy uncertainty in main clean energy markets, such as the U.S. and Germany, suspension in financings in countries like China and Brazil, and also steep declines in technology costs, particularly those of photovoltaic panels, BNEF said.
The first quarter investment figure for renewable energy, energy efficiency, and energy-smart technologies fell by 22%, with $40.6 billion, compared to Q1 2012.
With respect to country by country clean energy investments, the U.S. suffered the highest year-on-year drop of 54% at US$4.5 billion, followed by China with a 15% fall at $8.8 billion and Europe with a 25% setback at $13.4 billion. Nevertheless, Germany and the U.K. grew 8% and 1%, respectively, in the first quarter.
Elsewhere, clean energy investment was led by Japan with $8.2 billion, and the rest of Asia, outside India and China, jumped to 47% at US$10.1 billion.
With respect to the types of investments made in renewable energy projects, the largest decline was seen in utility-scale projects, such as wind farms and solar parks this fell 34% to $19.3 billion.
In addition, small-scale installations less than 1 MW, fell 8% in the first quarter to an estimated $18.5 billion.