Global Renewable Energy Investments Set Record in 2011

The solar and wind-power equipment business is in a development phase that, like the car industry of the 1900s, is leading to a slump in numbers of manufacturers before it can mature, according to Bloomberg New Energy Finance.

“In 1903, the United States had over 500 car companies, most of which quickly fell by the wayside even as the automobile sector grew into an industrial juggernaut,” Chief Executive Officer Michael Liebreich said in a statement accompanying the release of two reports today based on data compiled by BNEF.

Overcapacity and falling prices led to least 10 solar power companies including U.S. Treasury-backed Solyndra LLC collapsing in the past year. That’s even as renewable investment last year rose 17 percent to $257 billion, with clean power accounting for 44 percent of new energy capacity, according to the reports.

Solar cell prices slid 60 percent in the 15 months through December, feeding a 50 percent drop in the cost of solar panels, according to BNEF. That contributed to the failure of companies including Solyndra, SpectraWatt Inc., Evergreen Solar Inc. and Energy Conversion Devices Inc. Wind turbine prices for machines sold last year for delivery in 2013 are down 25 percent on 2009.

“A century ago, writing off the auto industry based on the failures of weaker firms would have been foolish,” Liebreich said. “Today, the renewable energy sector is experiencing similar growing pains as the sector consolidates.”

The Bloomberg Large Solar equity index fell 30 percent in 2012, with Q-Cells SE down 75 percent. The Bloomberg Industries Wind Turbine Pure-Play index slid 25 percent, with Vestas Wind Systems A/S, the biggest producer, down almost 50 percent.

World leaders will gather at a United Nations conference in Rio de Janeiro this month to debate adopting a statement calling for a doubling of the share of renewables in generation by 2030 to cut greenhouse gas emissions and dependence on fossil fuels. The UN Environment Program published one of today’s reports.

The meeting, dubbed Rio+20, marks two decades since the Rio Earth Summit set up conventions to protect biodiversity and curb climate change. More than 130 leaders will draft a declaration with steps to protect resources, spur growth and cut poverty.

Retail solar rates are already competitive with traditional generation in Germany, Italy, Spain, Denmark and Hawaii in the day, according to today’s statement. Onshore wind will compete with gas prices by 2016, say the reports from the UNEP and the Renewable Energy Policy Network for the 21st Century, or REN21.

Booming Rooftops
Renewables supply 16.7 percent of world energy demand, according to the reports. Investment in solar power, with booming rooftop panel markets in Germany and Italy, led the way last year, attracting $147 billion. While China edged out the U.S. with $52 billion of spending, India was the fastest-growing large market as investment surged 62 percent to $12 billion.

At least 118 countries have renewable energy targets in place, according to REN21, up from 96 a year ago.

“Renewable energy is spreading to more countries and regions of the globe,” Chairman Mohamed El-Ashry said in the statement. “Globally there are more than 5 million jobs in renewable energy industries, and the potential for job creation continues to be a main driver for renewable energy policies.”

Source: Bloomberg

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