2011 was outwardly a tumultuous year for clean energy, but economic uncertainty and the air of scandal were in actuality just red herrings. Global investment surged to record levels, and the United States led the pack.
The industry’s challenges were many: falling stock prices, bankruptcy, slim profit margins, trade disputes, disappearing energy subsidies, and excess capacity created a witch’s brew of uncertainty. Solyndra became a dirty word in the United States.
Despite these calamitous events, investment grew 5 percent over 2010 to a total ofUS$260 billion, according to a Bloomberg New Energy Finance market research report that was published today. Investment in 2011 was five times that of 2004.
This data should come as no surprise. Quarterly venture capital funding surpassed $1 billion in 2011, and some industry watchers noted that private investment in green tech was at the highest level in over 8 years.
The United States outpaced China with 55.9 billion invested compared to China’s $47.4 billion in total investment. The U.S. was up 33 percent for the year, but U.S. investment is less impressive relative to the overall size of the economy. I seriously question how long the U.S. will remain king of the mountain.
Ernst & Young views China as being the top most attractive place for renewable energy investments in its five-year outlook, scoring just ahead of the United States. The People’s Republic also intends to enact a carbon-trading scheme while lawmakers in Washington delay, delude, distract, and dither.
"The news that the US jumped back into the lead in clean energy investment last year will reassure those who worried that it was falling behind other countries. However before anyone in Washington celebrates too much, the US figure was achieved thanks in large part to support initiatives such as the federal loan guarantee programme and a Treasury grant programme which have now expired," said Michael Liebreich, chief executive of Bloomberg New Energy Finance.
"The country’s principal remaining support measure for renewable energy, the Production Tax Credit, is currently also scheduled to fall away at the end of 2012 unless it is extended. There may be a rush to get projects completed in 2012, followed by a slump in investment in 2013 if it expires," Liebreich continued. All but one of the Republican Presidential candidates oppose renewing the credit.
Bloomberg highlighted investments in the biofuels, geothermal power, marine power, solar, wind, and energy-smart solution markets. Smart solutions involve energy efficiency, energy storage, and smart grid solutions. Here are the breakdowns:
Solar: 36 percent growth and $136.6 billion in global investment
Wind: $74.9 billion
Energy-smart: $19. 2 billion
Biofuels: $9 billion
Geothermal: $2.8 billion
Marine Power: $0.3 billion
The solar power industry earned Bloomburg’s kudos for drawing significant investment in light of recent fire sale prices on photovoltaic modules. General Electric has forecasted that solar sales will exceed $1 billion by 2020. The question is where will the jobs be located?