Global clean energy investment shows strong increases and US sits at the top of the pile

The US has returned to the top of the clean energy investment rankings in a global survey from the Pew Charitable Trusts. It grew over 40 per cent in the last year, from $34 billion to $48 billion, beating China into second place, as it only grew by 0.5 per cent to $45.5 billion. It also follows a generous increase in global investment in clean energy, which increased by 6.5 per cent to $263 billion for 2011. In terms of investment, the last decade has shown huge increases, with only $33.7 billion being invested globally in 2004. Other countries showing big improvements include the UK (more than a 30 per cent increase to $9.4 billion), Japan (over 20 per cent increase to $8.6 billion) and India (more than 50 per cent increase to $10.2 billion).

Countries showing decreases include Germany, which maintained it’s 3rd place behind China and the US, but investment fell to $30.6 billion. The general trend however, is that countries with substantial clean energy industries are growing, whilst smaller investors are in decline. A ‘rest of EU’ grouping of nations saw investment fall over 35 percent, to $11.1 billion.

So there is a mixed signal globally; in some areas of the world, clean energy investment is being cut as part of ‘belt-tightening’ exercises, whilst other countries, including the US, see clean energy as an opportunity to reinvigorate their economies.

The figure for one of the global leaders, China, has shown slowing in its growth, some feel that this is a result of a maturation of the industry. Phyllis Cuttino, director of Pew's Clean Energy Program can explain some of the trends. "The thing that is noticeable about China is that they are world leaders in terms of attracting asset finance, which is a measure of job creation and deploying renewables. This means they are really reaping the rewards of attracting a certain class of investment. They have a policy that not only attracts investment and deploys renewables, but actually manufacturers and exports as well.

In response to the rapid increase in the US she says, "Investors rushed in to take advantage of expiring policies, such as tax incentives, loan guarantees, which expired at the end of 2011. So when we look at the very rapid rate of growth in investment here in the US, it is hard to see how that could be maintained without the policy mechanism that spurred that growth."

The promising growth in the global market has led to an increase from last year of 83.5 gigawatts (GW) of generation capacity, with the majority of this being wind (43GW) and solar (30GW). The worlds installed capacity now sits at 565GW. Whilst this currently exceeds installed nuclear capacity, it pales in comparison to fossil fuel sources, which make up the majority of the global capacity, which stands at around 4,500GW. It will be crucial that installed capacity continues to rise at these rates over the coming decade, and to do this, manufacturing costs must decrease, creating an industry which can stand on its own, rather than relying on the subsidies currently in operation.