Clean Energy Investment Fell 11% as Governments Cut Subsidies

Clean energy investment slid 11 percent last year after governments in industrial nations slashed subsidies for technologies ranging from wind turbines to solar power and biomass.

The $268.7 billion invested in the industry last year was down from a record $302.3 billion in 2011, the second highest reading ever and was five times the level in 2004, according to data compiled by Bloomberg New Energy Finance.

Investment fell 32 percent in the U.S., 51 percent in Italy, 68 percent in Spain and 44 percent in India. That offset gains in China and from small hydropower projects, which were among the few bright spots in the report released today.

“The most striking aspect of these figures is that the decline was not bigger given the fierce headwinds the clean energy sector faced,” Michael Liebreich, chief executive of BNEF, said in the statement.

He attributed the declines to the debt crises in the U.S. and Europe, which pared support for incentives that bolster the industry, and to a 24 percent decline in solar panel prices last year. All segments of the renewable energy industry experienced a drop in investment except for small hydro, which rose 17 percent to $7.6 billion.

Solar projects reaped the most funding with $142.5 billion of the total, followed by wind at $78.3 billion. Energy-smart technologies including electric vehicles and energy efficiency saw $18.8 billion investment. Biomass and waste-to-energy investment declined 27 percent to $9.7 billion.

Broader Market

The figures also showed a broadening of the market for renewable energy technologies beyond the big industrial nations led by the U.S., Germany, Spain and Italy that for years have been the mainstay for wind and solar developers.

Australia, South Africa, Morocco, Ukraine, Mexico, Kenya, Brazil, Ethiopia, Chile and South Korea each had at least one project that obtained financing worth more than $250 million during 2012, the London-based researcher said.

China’s total surged 20 percent to a record $67.7 billion. It was more than 50 percent above the U.S., which reaped $44.2 billion for its clean energy industry.

South Africa saw investment surge to $5.5 billion from “a few 10s of millions in 2011” as a result of its wind and solar tender. Japan’s new subsidy program helped investment rise as much as 75 percent to $16.3 billion.

Venture capital and private equity investment in clean energy companies fell 34 percent to $5.8 billion, its’ lowest since 2006. Public market investment dropped 57 percent to $5.1 billion, the lowest since 2004.

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