Clean energy investment at $260 bn in 2011

Renewable energy investment rose five per cent to a record $260 billion last year driven by a surge in solar developments and increased spending in the US, Bloomberg New Energy Finance said.

New spending on solar energy jumped 36 per cent to $136.6 billion in 2011, outpacing the $74.9 billion put into wind power, the London-based research company said on Thursday in a statement. Spending in the US rose by a third to $55.9 billion, surpassing the one per cent gain in China to $47.4 billion.

A jump in photovoltaic installations in the US and Europe overcame a 50 per cent decline the price of modules during 2011, said Michael Liebreich, chief executive of New Energy Finance. Falling prices made more developments possible and is bringing closer the date when wind and solar can rival fossil fuels without subsidies, he said.

“For every equipment company operating at thin or negative margins, there is an installer who is getting a good deal,” Liebreich said in the statement.

“Rumours of the death of clean energy have been greatly exaggerated.”

Last year’s growth was the slowest since 2009, when the financial crisis curbed lending to companies of all kinds and investment in renewable energy grew one per cent. Spending bounced back in 2010, expanding 31 per cent to $247 billion, New Energy Finance said.

‘Challenging year’
This year “looks like being another challenging year, with the European financial crisis continuing to fester and the supply chain working its way out of some fearsome overcapacity,” Liebreich said.

Three US solar companies including Solyndra LLC went bankrupt last year, in part because of falling prices triggered by increasing competition from Chinese manufacturers. European nations led by Germany and Italy have reduced guaranteed rates for electricity produced from renewables to keep power prices from surging during the economic slump.

US clean energy investment beat China for the first time since 2008, lifted by government support programmes for renewable energy, some of which have expired. A remaining incentive, the Production Tax Credit, is due to end at the end of the year.

“There will be a rush to get projects completed in 2012, followed by a slump in investment in 2013” if it expires, Liebreich said. Earlier on Thursday, Vestas Wind Systems A/S, the world’s biggest turbine maker, said 1,600 jobs at its US factories may be eliminated if the tax credit is not extended.

Europe investment
Clean energy investment in Europe rose three per cent to $100.2 billion, driven by solar installations in Germany and Italy and offshore wind financings in the North Sea such as the $1.3 billion financing for the 288-megawatt Amrumbank West project.

Public-markets fundraising dropped from $14.2 billion in 2010 to $11.9 billion in 2011 as clean energy company shares slumped.

The WilderHill New Energy Global Innovation Index, or NEX, which tracks 97 clean energy shares worldwide, fell 40 per cent last year, hitting in October its lowest since 2003 as manufacturers faced pressure from falling prices, overcapacity and competition from Asia, New Energy Finance said.

Asset finance of utility-scale renewable energy projects rose to $145.6 billion. Venture capital and private equity investment rose four per cent to $8.9 billion including a $133 million equity sale for Fisker Automotive Inc, the startup maker of plug-in hybrid luxury sports cars, the analyst said.

India posted the biggest growth, rising 52 per cent to $10.3 billion. Investment in Brazil increased 15 per cent to $8.2 billion.