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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 industry remain.

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 billion gallons.

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."

Clean 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 during 2013.


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