March 19, 2013
Deployment of Renewables Increases but Market Contracts
by Robert Kropp
The annual report on clean energy by Clean Edge emphasizes that despite a challenging year for
renewable energy, climate change and resource constraints mean that the fundamental drivers for the
Clean Edge has been reporting on trends in
renewable energy technologies since 2000, when the market size for solar photovoltaic was $2.5
billion and, for wind power, $4 billion. By 2012, solar PV had reached almost $80 billion and wind
was almost $74 billion. The market size for biofuels, which was not counted in 2000, stood at $95
billion by 2012.
Lest the growth over the years be misconstrued as all good news,
it must be noted that the market size of solar PV actually declined compared to 2011, when it stood
at almost $92 billion. The contraction marked the first time that market share for solar PV
decreased. The economic struggles persisting in Europe, as well as the overleveraged status of
solar companies in China, contributed to the decline. And in the US, "the industry was begrudgingly
transformed into a partisan wedge issue during the highly contentious US presidential campaign," the report from
Clean Edge states. "Conservative organizations and politicians continue to attack pro-clean
energy policies at both the state and federal level."
Yet despite the decline in market
size, solar PV deployment continues to rise, to 30.9 gigawatts in 2012. Global wind capacity
expanded by 44.7 GW, and global biofuels production expanded from 27.9 billion gallons to 31.4
The reason for continued growth in deployment in the face of economic and
political challenges, according to Clean Edge, is simple. "Intensifying resource constraints
(everything from freshwater to energy feedstocks) cannot be ignored, especially with a global
population now exceeding 7 billion," the report states. "In the aftermath of unprecedented climate
disruption in the U.S. and abroad, resiliency and adaptation are becoming critical business and
policy drivers as organizations scramble to meet a literally changing landscape."
Edge projects that by 2022 the market size for renewables should nearly double, to $426 billion.
Venture capital investments in clean technologies also decreased globally in 2012, by 33%
to $6.5 billion. In the US, VC investments declined by 26%, from $6.6 billion to $5.0 billion.
However, the decline in the US tracked an overall decline in VC investments. And while Bloomberg
New Energy Finance reported that global clean-energy investments declined by 11% in 2012, the
service attributed it to "sharply lower prices of solar and wind technology," which allowed for
"higher installation levels per dollar of funding."
The report points out that Warren
Buffett's MidAmerican Energy Holdings and Google made significant investments in renewable energy
technologies in 2012. It also observes, "President Obama has signaled a strong commitment to
expanding clean energy and energy efficiency in his second term, calling for a doubling of
renewable power by 2020." A bill introduced by Senator Bernie Sanders of Vermont seeks to end
subsidies for fossil fuel industries, and on college campuses across the country students are
calling for divestment from fossil fuels.
Perhaps by March of 2014, the analysis by Clean
Edge will reflect how these trends contributed to an emphatic transition to a low-carbon economy