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
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
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
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.