Global investment in clean energy dropped to its lowest since the depths of the financial crisis three years ago as the U.S. and European nations cut support for wind and solar projects, Bloomberg New Energy Finance said.
Spending on new wind farms, solar parks and other renewable projects fell to $27 billion in the first quarter, a 28 percent slump from the last three months of 2011 and a 22 percent drop from the same quarter a year earlier, New Energy Finance said today in a statement. That’s the lowest quarterly total since the $20 billion recorded in the first three months of 2009.
The quarterly decline follows a record year in which an estimated $263 billion was poured into renewable energy, according to the London-based research company. The clean-energy industry has been hurt by subsidy cuts in European nations including Spain, Germany and the U.K., and expiring tax credits in the U.S., the biggest market in 2011 for renewables.
“The weak first-quarter number reflects the destabilizing uncertainty over future clean-energy support in both the European Union, driven by the financial crisis, and the U.S., driven by the expiry of stimulus programs,” New Energy Finance Chief Executive Officer Michael Liebreich said in the statement. “There is no sign of a rapid turnaround in either of these regions.”
Spain suspended subsidies to new renewable-energy projects in January, while Germany and Britain have curtailed support to solar power. In the U.S., a Treasury grant program offering as much as 30 percent of development and construction costs for renewable-energy plants expired on Dec. 31, while the Production Tax Credit, which grants an incentive worth 2.2 cents a kilowatt-hour of wind power, is due to end this December.
Expiring U.S. Credits
The last time the Production Tax Credit was allowed to expire, at the end of 2003, U.S. annual wind installations declined to 397 megawatts in 2004 from 1,670 megawatts the previous year, according to data from the American Wind Energy Association.
“With the expiration of the Production Tax Credit at the end of this year, there’s really been no new wind commissioned for 2014,” Phyllis Cuttino, clean energy director at the Washington-based Pew Charitable Trusts, said by telephone.
Asset-financing of utility-scale renewables projects accounted for $24.2 billion of global spending, the bulk of first-quarter investments. Venture capital and private-equity investments totaled $1.9 billion, and $601 million was raised on equity markets, New Energy Finance said.
The quarterly data exclude spending on small-scale projects and corporate and government research and development, which the research company reports on annually.