Europe slashed investment in renewable energy by 50% in 2015

Overall trends across the globe for renewable energy technology investment were positive in 2015, with an increase of 4% worldwide. The same could not be said for Europe, where clean energy investment was just $58BN, which represented a decrease of over 50% from 2014, according to Bloomberg New Energy Finance (BNEF).

Europe had positioned itself as a global leader in renewables investment, representing 45% of global clean energy investment in 2010, and peaking in 2011 with an investment of $132BN. However, 2015 saw a sharp reversal of investment. The BNEF attributed this to fear over the survival of the Euro, mistakes by policymakers, and some lingering effects from the global financial crisis.

Germany and France were two of the countries that saw a particularly dramatic decline from investment levels in 2014. Germany’s investment fell by 42% to $10.6BN, while France invested just $2.9BN, which represented a 53% decrease from 2014. Not all European countries fitted into this trend, as the U.K. actually upped its investment in renewable energy to $23.4BN, which was a rise of 24% from 2014.

Other countries leading the way

Luckily for the low-carbon energy sector, Europe’s poor levels of investment was the exception not the rule, as global investment in clean energy grew in many other countries. This resulted in a combined global increase of 4%, from $315.9Bn in 2014 to $329.3BN in 2015.

The two biggest investors were China and the U.S. who also significantly increased their levels of spending from 2014. China was the most shining example, investing $110.5BN in clean energy, which represented a 17% rise from 2014, while the U.S. upped its spending 8%, to $56BN.

Fortunately, this trend looks as if it will continue for a number of big players outside of Europe. China recently released its 13th Five-Year plan, which highlighted large future investments in various different clean energy technologies and initiatives, including solar PV, which its capacity it plans on tripling to 143GW over the next five years.

Another country that recently announced future renewables investment was Australia, which is creating the new Clean Energy Innovation Fund, with a budget of AU$1 BN ($760 mill) to spend over the next ten years. Environment Minister Greg Hunt said that it will invest AS$100 million per year on “emerging clean energy technologies.”

However, the future for the clean energy sector in Europe does not look so optimistic. BNEF analysts believe that the continent needs political commitments before the sector will begin to regenerate again, but that they do not appear to be on the horizon, particularly as fears more over a possible British exit from the EU.

Europe’s current largest investor, the U.K. has even started to pull back its support for some renewable technologies, as outlined in the Conservative Party’s Budget last week. However, a landmark amendment to the Budget will see domestic solar PV hold on to its favorable value-added-tax (VAT) rate of 5%, instead of incurring the proposed rise to 20%.