Renewables Investment Fell 23% This Year After Record 2015

Global investment in renewable energy fell 23 percent in the first half of this year as the cost of installing solar panels declined and China paused the pace of its spending.

Wind, solar and other clean energy industries attracted $116.4 billion in the first two quarters of the year including $61.5 billion in the second quarter, according to Bloomberg New Energy Finance, a London-based researcher that tracks investment. It also revised up 2015’s total by almost $20 billion to a record $348.5 billion.

“It is now looking almost certain that the global investment total for this year will fail to match 2015’s runaway record,” said Michael Liebreich, founder of Bloomberg New Energy Finance.

Cheaper photovoltaic panels and lower financing costs have reduced capital spending needs of developers even as installations of the technology have hit a record. BNEF also said there’s been a shift toward more utility-scale projects and away from smaller-scale installations, which was the reason for the revisions for 2015 data. Investment in small solar projects fell 32 percent to $19.5 billion in the first half of 2016, also driven by a “marked” slowdown in Japan.

Last year’s surge in investment came as almost 200 countries agreed on a landmark deal in Paris to rein in fossil-fuel emissions blamed for global warming.

Europe and Brazil were the only regions to see an increase in investment in the first half of this year, with Europe’s 4 percent gain driven by a number of major offshore wind projects reaching financial close.

By contrast, China’s investments dropped 34 percent to $33.7 billion, partly because 2015 wind and solar investments were higher than previously thought. Lower power demand and government policy changes also held back investment there, Liebreich said.

In the Middle East and Africa, investment dropped 46 percent to $4.2 billion, and the U.S. fell 5 percent to $23.1 billion.