Investment in clean energy drops again

Investment in renewable energy worldwide is at its lowest level since the beginning of the economic downturn, with uncertainty around subsidies and financial chaos to blame, according to figures from Clean Energy Pipeline.

Major falls were seen in project finance, venture capital and private equity over the second quarter of the year. Activity in mergers and acquisitions fell by more than half, compared to 2011, project finance fell by 22 per cent and only three $500million plus deals were made.

Douglas Lloyd, whose firm conducted the research said, "The global clean energy sector is right in the middle of a major storm combining policy uncertainty in the US, low natural gas prices across North America, feed-in tariff cuts in Europe, a slowdown in Chinese wind installation levels and an on-going sovereign debt crisis in the Eurozone. All these factors explain the disappointing investment levels recorded this quarter."

Despite the falls this year, there are positive signs that the market is recovering. Investment in bioenergy companies is growing massively, as is interest in energy efficiency. As many cleantech industries are in their infancy, it will be essential that controversy over subsidies and uncertainty in the Euro does not prevent these companies getting off the ground.