Study: Poorer Nations Lead in Global Clean Energy Investment Growth

The world’s poorer nations saw stronger growth in clean energy investment last year than their more developed counterparts, which collectively saw investment fall over a cliff, according to a new study.

Investment outside the G-20 increased by 52 percent last year to more than $20 billion, while G-20 nations experienced a collective decline in investment of 16 percent, attracting $218 billion, according to research published by the Pew Charitable Trusts.

Non-G-20 economies’ share of total global investment reached an impressive 8.5 percent, the highest since reliable data collection began in 2004. And the trend is likely to continue: Bloomberg New Energy Finance projects continued annual growth for clean energy of 10 to 18 percent in parts of Asia, Africa, the Middle East, and Latin America through 2020.

Among the other highlights, global clean-energy investment fell 11 percent last year to $269 billion, but China bucked the trend by attracting $65.1 billion, a 20 percent rise over the year earlier and nearly one-third of the total investment in the G-20.

Becoming what Pew described as the “epicenter” of clean energy investment, China garnered 25 percent of all solar energy investment, setting a one-year record with $31.2 billion invested.

The Pew study found that Japan re-emerged as a top destination for clean energy investment as national efforts to develop alternatives to nuclear energy gained momentum after the Fukushima Dai-ichi nuclear disaster in 2011.

Clean energy investment in the nation increased 75 percent to $16.3 billion, almost all in the solar sector, which added more than 2GW of generating capacity.

Recent data from the Ministry of Economy, Trade and Industry showed Japan increased its renewable energy capacity by 1.394 GW between April 2012 and January of this year.

Solar accounted for virtually all the additional capacity, with 1.329 GW of the total, 1.02 GW of that made up of residential installations.

Globally, asset finance – typically associated with the installation of clean energy equipment

and generating capacity – remains the leading source of global investment in clean energy, with $136.5 billion worth of asset financing realized in 2012, down 20 percent year-on-year and making up 62 percent of all G-20 clean energy investments.

Meanwhile, venture capital and private equity investment declined by 34 percent in 2012 to $5.6 billion, with the U.S. continuing to dominate this class. Attracting $4.3 billion, the country accounts for 78 percent of all VC/PE.

For the fourth year in a row, energy-efficient and low-carbon technologies were the leading

beneficiaries of venture capital investment, attracting $2.2 billion compared to solar energy, attracting $1.6 billion, the study said.

Meanwhile, stock prices of clean energy companies remained depressed by product price declines, significant oversupply in the manufacturing sector, and persistent uncertainties over government policies. As a result, public market financing fell sharply to $4.6 billion, 55 percent below 2011 levels.

Investment is also shifting across technologies. For the second year in a row, solar technologies attracted more financing than any other technology by a wide margin: $126 billion was invested in the subsector in 2012, or 58 percent of the G-20 total.

Wind energy, which has garnered the majority of clean energy investment for most of the last decade, saw 14 percent less investment across the G-20, but it still attracted $72.7 billion.

Continued reductions in the price of wind and solar helped boost worldwide installed clean energy capacity to 648 GW.

South Africa finally emerged in 2012 as an important destination for clean energy investment, attracting $5.5 billion and becoming the fastest-growing market in the G-20.

Top 10 Countries in Clean Energy Investment Growth in 2012

South Africa     20,563%

Mexico             548%

Turkey             206%

Japan                75%

Argentina         63%

South Korea     61%

China                20%

Australia          -7%

Rest of EU        -8%

UK                   -17%

 

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