Private funding in clean energy a record USD263 bln in 2011

US reclaims lead, attracting USD48 billion in private finance and investment
April 12, 2012
G20 clean energy investment by technology, 2004-11

Global clean energy finance and investment grew to USD263 billion in 2011, a 6.5 percent increase over the previous year, according to new research released by The Pew Charitable Trusts.

Investment in G-20 countries accounted for more than 95 percent of the global total with the United States reclaiming the top spot from China, which had led the global clean energy race since 2009. Within the Asia-Pacific the relatively flat investment in China was mitigated by sharp gains in India, Japan, and Indonesia, which were among the fastest growing destinations for clean energy private investments last year.

“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.

“In the United States, which attracted USD48 billion last year, 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 is to end this December.”

Policy constrast

Analysts point out that the US is unlikely to retain its lead in 2012. Unlike China, which has solid green energy policies that reassure investors  the US has no long-term renewable energy target and tax breaks designed to spur investment have now expired.

The US does, however, retain a huge in venture capital financing, an important measure of energy innovation, attracting USD6 billion, or 70 percent of the G-20 total. Germany and China were distant followers, with USD635 million and USD458 million, respectively, in venture capital investments.

Among renewable technologies, solar increased globally by 44 percent, attracting USD128 billion and accounting for more than half of all clean energy investment among members of the G-20. Dramatic price declines, with the cost of solar modules dropping by half in the past 12 months, fueled the activity.

Wind prices also were lower in 2011 but overall investment in the wind sector declined for the first time, with G-20 investment falling 15 percent to USD 72.1 billion. Energy efficiency suffered a similar decline in the G-20.

The overall combination of falling prices and growing investments accelerated installation of clean energy generating capacity by a record 83.5-GW in 2011. Almost 30-GW of new solar and 43-GW of wind power were deployed. Renewable power generating capacity, at 565-GW globally, was nearly 50 percent more than installed nuclear generating capacity in 2010.

“The clean energy sector received its trillionth dollar of private investment just before the end of 2011, demonstrating significant growth over the past eight years,” said Michael Liebreich, CEO of Bloomberg New Energy Finance, Pew’s research partner.

“Solar installations drove most of the activity last year as the falling price of photovoltaic modules, now 75 percent lower than three years ago, more than compensated for weakening clean energy support mechanisms in a number of parts of the world.”