London, UK — Recent analysis of the 2011 global investment market has revealed that once again, renewables broke all previous records, albeit with growth at a rather more subdued pace than those with an interest in this industry are used to. With 2012 already scoring some big investment deals, $257 billion of total spending was reported by the Global Trends in Renewable Energy Investment Report (GTR) for 2012. Among the highlights was the performance of solar, which for the first time reported an appreciable gap in investment when compared with wind power.
Normally heading the tables, wind’s reign has apparently been dramatically overturned by a solar market which attracted nearly twice as much investment. As reported, total investment in solar power jumped by 52 per cent to some $147 billion, largely on the back of domestic installations in Germany and Italy, along with a host of other countries from China to the UK.
According to the report, at least part of the explanation for this growth rests with the rapid fall in PV module prices thanks to economies of scale in manufacturing, the rise of low-cost Chinese producers, and global overcapacity. The result – a near-50 per cent fall in module prices during the year – stimulated demand for PV panels, particularly on rooftops.
So, apparently a bad deal for manufacturers, but clear evidence of a solar market that has been hugely stimulated as a result of tumbling prices. Coming at a time of global economic malaise this is nothing short of miraculous, given that it has evidently been given a healthy shove by grassroots investment right across the globe, largely, it must be acknowledged, with the support of government incentive schemes. Elsewhere in our July-August edition we report on the efforts Germany’s municipal authorities are making to beef up renewable energy generation to supply the country’s cities, driven no doubt by political pressure directed at elected city officials from the voter level.
What does this type of development mean? It means that the sector is at last maturing: that investors, politicians and individuals have a better appreciation of the risks and advantages, and choose to take a well-informed decision to spend their cash on installing renewable energy equipment. It means greater investment, bigger and more competitive markets, and ultimately better products and better deals for consumers and industry alike.
Those in other technology sectors certainly needn’t feel glum. Bloomberg New Energy Finance estimates that the average onshore wind project will be competitive with gas-fired generation by 2016, and other technologies are rapidly catching up. For further evidence of this maturity, see the five-year forecast for the offshore wind sector, also in our July-August edition, for example – plus don’t forget to look out for our regular quarterly supplements Wind Technology and Large Scale Solar.
As the GTR report observes, with solar PV and onshore wind equipment prices falling rapidly, there is a ‘promised land’ in sight in which these technologies will not require any subsidy.