Global investment in clean energy was $45.9 billion in the third quarter of this year (Q3'13), down 14% from the second quarter and 20% below the figure for Q3'12, according to a new report from Bloomberg New Energy Finance (BNEF).
BNEF says the latest figure makes it almost certain that investment in renewable energy and energy-smart technologies, such as smart grid, efficiency, storage and electric vehicles, will end this year below 2012's $281 billion – a total that was itself 11% down from the record established in 2011.
The third-quarter data showed weakness almost across the board, with investment in China, the U.S. and Europe all down on the equivalent period of 2012. The report says the only region to show a rise in activity on both the quarter and the year was the Americas outside the U.S. and Brazil, thanks to firm figures from Canada, Chile and Uruguay.
According to BNEF, the main crumb of comfort in the figures is that installation of solar photovoltaic power capacity worldwide is set to hit a new record in 2013 – at some 36.7 GW. But much reduced costs per megawatt mean that the dollars invested in that new capacity will almost certainly be below the equivalent for last year, the report adds.
Michael Liebreich, chief executive of BNEF, comments: "After the slightly more promising second quarter, we now have a very disappointing third-quarter figure for investment. $45.9 billion is still a substantial amount of money, greater than that invested in the whole of 2004, but the loss of momentum since 2011 is worrying.
"The latest setback reflects policy uncertainty in Europe, the lure of cheap gas in the U.S., a leveling-off in wind and solar investment in China, and a general weakening of political will in major economies," Liebreich continues. "Governments accept that the world has a major problem with climate change but, for the moment, appear too engrossed in short-term domestic issues to take the decisive action needed."
The report says there continues to be a contrast between overall investment data, which have faltered, and the recent performance of clean energy shares on stock markets around the world. Measured by the WilderHill New Energy Global Innovation Index, or NEX, which tracks 96 quoted companies worldwide, clean energy shares on Oct. 9 were standing nearly 47% up on the year so far and 74% above their lows reached in late July 2012, according to BNEF.
The detail of the Q3'13 investment data shows that asset finance of utility-scale (1 MW-plus) renewable energy projects was $26.4 billion, down from $31.9 billion in the second quarter of this year and $34.8 billion in Q3'12.
BNEF says venture capital and private equity investment in specialist clean energy companies was notably weak in the quarter to September. It totaled just $724 million, compared to $1.3 billion in Q2'13 and $1.1 billion in the third quarter of last year. In fact, BNEF says it the weakest quarter for VC/PE in the sector since 2005.
The report says investment in small-scale capacity of less than 1 MW – predominantly rooftop solar on homes and business buildings – was much more resilient, at $17 billion in Q3'13, level with the previous quarter and below 3Q'12 $20.1 billion, only because the cost of PV panels has come down sharply.
Also showing a respectable performance was investment in clean energy companies via the public markets, at $2 billion in the third quarter, the report adds. This was down from a very strong $3.8 billion in the second quarter of this year but was above the $1.6 billion of Q3'12.
Among the major countries, overall clean energy investment showed declines in most. The U.S. saw its total fall to $5.5 billion in Q3 from $9.4 billion in Q2, China was down at $13 billion from $13.8 billion, India was at $1.2 billion from $1.5 billion, and Japan $7.3 billion from $7.4 billion. Brazil showed a modest rise, from $950 million to $1.1 billion, BNEF continues.
In Europe, the report says German investment was $1.6 billion, down from $1.7 billion in Q2 and far below the quarterly figures seen in recent years; France saw a fall from $1.2 billion in Q2 to $727 million in Q3; Italy a modest rebound to $1.3 billion from $1.2 billion; and the U.K. a somewhat bigger rally from $1.6 billion to $2.6 billion, the report concludes.