Today Bloomberg New Energy Finance (BNEF) released its annual clean energy funding figures which show a 32% year-over-year decline in global solar investments to US$116 billion, as a leading component of an 18% dip overall in clean energy investments.
This includes a 28% fall in investment in PV plants smaller than 1 MW, which made up $40 billion of the total. However, BNEF was careful to note that this decline was largely due to cheaper systems, not lack of interest in distributed solar.
In general, the trend of declining investment must be viewed against success in installations. BNEF estimates that 70 GW of solar PV projects were completed last year, a 20% increase over 2015 levels.
One area that shows this contradiction was Asia. Following an globally unprecedented volume of PV installations in the first half of the year, China’s market slowed considerably in the second half, and BNEF notes that both China and Japan are suffering from grid problems in utilizing all of the PV that they have put online.
“After years of record-breaking investment driven by some of the world’s most generous feed-in tariffs, China and Japan are cutting back on building new large-scale projects and shifting towards digesting the capacity they have already put in place,” said BNEF Head of Asia Justin Wu.
“China is facing slowing power demand and growing wind and solar curtailment. The government is now focused on investing in grids and reforming the power market so that the renewables in place can generate to their full potential. In Japan, future growth will come not from utility-scale projects but from rooftop solar systems installed by consumers attracted by the increasingly favorable economics of self-consumption.”
The problems facing the solar industry are not confined to Asia. BNEF also notes that many developing nations saw clean energy investment fall in 2016, due to the difficulty that many projects awarded in auctions have had in securing financing by the end of the year.