NEW YORK -- Global investment in renewable energy fell in 2013 for the second straight year. Ulf Moslener, a professor at the Frankfurt School of Finance & Management, said instead of focusing on what was spent, look at what it bought.
“The value for the money has never really been better,” Moslener said in an interview.
Spending on renewables declined 14 percent to $214 billion last year. The amount of new capacity fell at a slower rate, 8 percent, to about 81 gigawatts, according to a report today from the Frankfurt School-United Nations Environment Program Collaborating Center. Gross investment in fossil-fuel power dropped 13 percent last year to $270 billion, while new installations fell even faster, by 14 percent, to 95 gigawatts.
“The business model is getting better and better,” said Moslener, who edited the report. “The value-for-money trend for renewables is improving — and in the traditional sources, it’s deteriorating.”
Clean energy, excluding large hydro, now accounts for 8.5 percent of the world’s generating capacity, up from 7.8 percent in 2012. About 44 percent of all new installed power in 2013 came from clean sources, the same share as in 2012.
Moslener said the decline in renewable investments was driven in part by by falling prices, especially for solar power.
“A nice comparison would be the telecom industry,” Moslener said. “Wasn’t there a time at the beginning when it was very expensive? The costs went down, and that didn’t necessarily mean the end of cellphones.”
Photovoltaic installations last year surged 26 percent to 39 gigawatts, the most ever, even as solar investment dropped 23 percent to $104 billion. While some investors were wary of policy uncertainties and pulled back, others took advantage of improvements in technology and financing, Moslener said. The cost of solar panels has plunged 60 percent in the past three years.
In China, more money was spent last year on renewable- energy investments, $56 billion, than in the whole of Europe, $48 billion, for the first time. The world’s second-largest economy has spent at least $50 billion in each of the last three years, according to the report. Solar installations in 2013 there more than tripled to 12 gigawatts from 3.6 gigawatts in 2012.
“The simple message that investments are falling is not sufficient — it’s not the whole message,” Moslener said. “It’s a cloud with silver linings.”
Copyright 2014 Bloomberg
Lead image: Solar panels via Shutterstock