Industry Market Trends

U.S. Reclaims Top Spot from China in Clean Energy Investment

Apr 19, 2012

In the global race to secure private clean energy financing and investment, the U.S. reclaimed the top spot in 2011 after trailing China since 2009.

Global investment in clean energy grew to a record $263 billion in 2011, a 6.5 percent rise over 2010, new research from the Pew Charitable Trusts indicates. Excluding research and development (R&D) spending, investment in the sector is now more than 600 percent higher than in 2004, according to Who's Winning the Clean Energy Race?, a new report from the independent, non-governmental organization.

"The clean energy sector received its trillionth dollar of private investment just before the end of 2011, demonstrating significant growth over the past eight years," Michael Liebreich, CEO of Bloomberg New Energy Finance, Pew's research partner, said in a statement.

Among the Group of Twenty (G-20) nations, the United States reclaimed the top spot from China, which led the global clean energy race since 2009. The U.S. experienced a 42 percent increase over 2010 to total $48 billion. This helped propel the addition of 6.7 gigawatts (GW) of wind power and, for the first time, more than 1 GW of solar energy, enough to power 800,000 homes.

The U.S. also remains the leader in venture capital financing, an important measure of energy innovation, attracting $6 billion, or 70 percent of the G-20 total. Despite an overall decline in R&D, the U.S. accounted for 30 percent of total corporate R&D and 31 percent of government R&D investments last year.

The 42 percent increase in the U.S. was partly due to investors taking advantage of the nation's economic stimulus programs that expired at the end of 2011. (The production tax credit concludes at the end of this year.)

"In 2011, the global clean energy sector grew again, the U.S. reclaimed its lead as the top destination for private investment, and consumers reaped the rewards of significantly reduced prices for clean energy technologies, such as solar panels, which are now nearly 50 percent cheaper than a year ago," Phyllis Cuttino, director of Pew's Clean Energy Program, said in an announcement of the U.S findings. "Yet the yo-yo effect of U.S. clean energy policy hurts the ability of the U.S. to consistently compete and turn U.S.-led innovation into manufacturing, deployment, and export opportunities. Creative, stable and transparent policies remain a critical signal to private investors."

Total U.S. installed renewable energy capacity at the end of 2011 was 93 GW, second to China.

Based on Pew's findings, China attracted $45.5 billion in clean energy investment last year, which spurred deployment of 20 GW of wind power, the most of any nation. Germany ranked third among the G-20 with $30.6 billion and 7.4 GW of solar power installed.

Italy ($28 billion), India ($10.2 billion) and the United Kingdom ($9.4 billion) were also among the nations that most successfully attracted private investments last year. Japan ($8.6 billion), Spain ($8.6 billion) and Brazil ($8 billion) rounded out the top 10 countries for clean energy investment.

"Companies and countries have experienced ups and downs in the worldwide clean energy race in recent years, and 2011 was no exception," the organization states. "Price competition is the defining characteristic of the clean energy race in 2011, spurring investment and deployment, increasing global clean energy capacity, and creating opportunities for innovators, entrepreneurs and workers."

Among renewable technologies, investment in the solar sector jumped 44 percent in 2011, attracting $128 billion and accounting for more than half of all clean energy investment in G-20 countries. Significant price declines, with the cost of solar modules -- now 75 percent lower than three years ago -- dropping by half in the past 12 months, fueled the activity. Nearly 30 GW of new solar power were deployed globally last year.

Solar gains offset a 15 percent decline in wind investments, to $72 billion, from 2010 through 2011. Despite the investment drop in the wind sector, more than 43 GW of new wind energy capacity was deployed last year.

The combination of falling prices and growing investments accelerated installation of clean-energy generating capacity by a record 83.5 GW in 2011, bringing the total to 565 GW globally. This represents nearly 50 percent more than installed nuclear power capacity worldwide at the end of the year.