The landscape of the global renewable energy market continues to shift with changes in economic and social conditions and policies. While some renewable energy sectors – notably, solar photovoltaic (PV) deployment – experienced “dazzling growth, success and rising stock prices,” others saw a drop in deployments, as well as challenges on the policy and finance fronts, according to a global clean energy market report from Clean Edge released March 26.
Last year marked a turning point for solar PV, according to Clean Edge’s, Clean Energy Trends 2014 report, as newly installed solar PV generating capacity exceeded that of wind power for the first time since the market research company began tracking global markets in 2000. Newly installed solar PV generating capacity totaled 36.5 gigawatts (GW) while that for wind totaled 35.5 GW, according to Clean Edge’s count.
A crossover for solar PV
Fueling solar PV capacity growth, new installations hit record levels in China, Japan and the U.S. in 2013. That combined with a decline in new wind power capacity led to “this unprecedented crossover,” Clean Edge explained in a press release.
The global solar PV market grew 15 percent in value in 2013, with modest growth in biofuels adding to an overall rise in the global renewable energy market. Combined, growth in the two sectors wasn’t enough to offset a drop in the value of the wind power, however.
Totaling $247.6 billion, the combined value of the global renewable energy market in 2013 fell slightly from $248.7 billion in 2012, according to Clean Edge’s latest report.
Energy crossroad dead ahead
Beset by strategic geopolitical problems, rising social unrest and fragile economic recovery, the social, economic and political, as well as ecological, stakes revolving around energy are extremely high. Energy policy, investment and economic decisions made today will chart a course and lock in greenhouse gas emissions for decades to come — setting us on a course for more in the way of extreme weather events and associated damages and costs, according to the World Meteorological Organization’s (WMO) 2013 Annual Statement on the Status of the Climate.
Clean Edge’s co-founder and managing director, Ron Pernick, reinforces the point:
“The adoption of clean energy is set against a bigger-picture context that finds many of the world’s largest energy-using nations struggling with critical choices for their energy future. Climate disruptions, smog alerts, planned and unplanned nuclear power shutdowns, and resource scarcity are all driving significant change, accelerating the double-digit adoption growth of solar PV, hybrid and electric vehicles, green buildings, and other clean-tech solutions.”
Among the Clean Energy Trends 2014 report’s key takeaways:
- Solar photovoltaics (including modules, system components and installation) grew to $91.3 billion from $79.7 billion in 2012, with a record 36.5 GW installed globally. In contrast to 2011 and 2012, when PV panel costs plummeted more than 20 percent in both years, prices held nearly steady last year — dropping slightly to $2.50 per watt installed.
- Wind power (new installation capital costs) fell to $58.5 billion from $73.8 billion in 2012. The industry added 35.5 GW of new capacity in 2013, well below the previous year’s record 44.7 GW and its weakest performance since 2008.
- Biofuels (global production and wholesale pricing of ethanol and biodiesel) rose slightly, from $95.2 billion in 2012 to $97.8 billion last year. Global biofuels production remained constant at 31.4 billion gallons, with average prices increasing slightly.
- Together, Clean Edge projects that these three sectors will expand from $247.6 billion in 2013 to $397.8 billion within a decade.
- Venture capital investments in U.S.-based clean-tech companies totaled $4.4 billion in 2013, falling 25 percent from $5.8 billion in 2012, according to data provided by Cleantech Group.
- Picking up some of the VC financing slack is the continued rise of large corporate and project finance deals. Google’s $3.2 billion acquisition of smart thermostat maker Nest in early 2014 is the most prominent example. But other recent large deals include Goldman Sachs’ $500 million fund to finance SolarCity PV installations and Wells Fargo’s pledge to invest $100 million in tax equity financing in SunEdison projects.
- For the first time, Clean Edge expanded the scope of its global market size research to include green buildings and electric and hybrid vehicles. Since 2000, these sectors have experienced compound annual growth rates of 68.9 percent and 38 percent respectively.
Clean Edge also highlights five key trends that will shape clean energy markets around the world in coming years:
- Enlightened utilities begin to embrace distributed energy assets
- Cities lead climate charge by focusing on regional carbon reduction
- Net zero energy buildings gain ground
- Internet-enabled clean-tech startups define a new sector
- Vertical farming sprouts in cities around the world
All images courtesy of Clean Edge, “Clean Energy Trends 2014?