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July 11, 2011
Investment in Renewable Energy Up in 2010
    by Robert Kropp

The annual survey by the UN Environment Program of investment in renewable energy technologies finds a 32% increase in 2010, to $210 billion.


The good news for investment in renewable energy technologies, according to a new report by the UN Environment Program (UNEP), is that a record $210 billion was invested in 2010. The amount represented a 32% increase over the $160 billion invested in 2009, and five and a half times the amount invested in 2004, when UNEP first published its annual report.

The 2011 report was produced by UNEP with the assistance of Bloomberg New Energy Finance and the Frankfurt School of Finance & Management. UNEP also announced the formation of the UNEP Collaborating Center for Climate & Sustainable Energy Finance at the Frankfurt School.

In a time of persistent uncertainty over the state of the global economy, even public market investment increased, by 23% over 2009 to $15.4 billion. On the other hand, clean energy share prices encountered difficulties in 2010, as the WilderHill New Energy Global Innovation Index (NEX) "fell 14.6% during the year, under-performing wider stock market indices by more than 20%," according to the report. The FTSE Renewable and Alternative Energy Index also lost value in 2010, by 8.4%.

For the first time, financial new investment in renewable technologies was greater in developing countries. The trend was led by China, where $49 billion was newly invested. However, new investment also increased in most other developing markets as well. In 2004, new investment was four times as great in developed countries.

As for specific renewable technologies, new investment in wind continued to dominate in 2010, with $94.7 billion. While solar trailed in new investment with $26.1 billion, small scale distributed solar capacity investment increased from $31 billion to $60 billion in Europe, largely due to feed-in tariff subsidies. However, a 60% decrease since 2008 in the price of photovoltaic (PV) modules per MW was also a factor.

Overall, the report found, non-hydro renewable power capacity accounted for 8% of total world electricity capacity in 2010, and 34% of capacity added.

In the US, financial new investment increased from $16 billion to $25 billion, the largest portion of which was asset financing of wind, which reached almost $15 billion in 2010. In the US, according to the report, "The improvement in asset finance in 2010 opens up the prospect of higher capacity addition totals for 2011."

"Beyond that," the report continued, "Much will depend on whether the US Treasury grant scheme expires at the end of this year, and what if anything replaces it."

The Treasury Department's renewable energy grant program, established by the American Recovery and Reinvestment Act of 2009, allows taxpayers eligible for the renewable electricity production tax credit (PTC) to receive a cash grant instead of taking the PTC for new installations. The program is scheduled to expire on December 31.

 

 
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