Bloomberg New Energy Finance

Solar takes leader position as renewables had a record year in 2014

The Crescent Dunes concentrated solar project in Nevada, US. Photo credit: Matt Hintsa via Flickr.
By Anders Lorenzen

After two years of declining investment, 2014 became the year when renewables kicked back and set new records. Data published by Bloomberg New Energy Finance (BNEF) shows that renewable energy investment last year was at $310bn, up 16% from $268.1bn in 2013, though still 2% below the all time record of $317bn of 2011.

While European investments in 2014 only increased by 1% relative to 2013 levels, there was encouraging growth in the developing world; Brazil investments were up by an impressive 88%; China grew 32% and registered a total of $89.5bn investment (nearly a third of the world total); and India and South Africa recorded modest growth at 14% and 5% respectively. In the US Obama’s ‘action on climate change’ helped push forward 8% of growth, while Canada grew by an impressive 26%.

Financing of offshore wind farms accounted for most investment, representing a total of $170bn; seven European offshore wind projects reached key investment decision stages in 2014. Several large scale solar and onshore wind projects were also financed, including large projects in Kenya, South Africa, Japan and Canada.

Decentralised solar PV saw remarkable growth with $73,5bn, reaffirming the future growth potential of the solar industry. Nearly half of all renewable energy investment in 2014 came from solar rooftop and large scale installations, the largest level recorded.

One of the emerging renewable energy technologies with huge potential is geothermal energy, which can be used both for heating and electricity generation. The technology is still struggling to reach the large renewable world share of wind and solar, but saw impressive growth in 2014 with a total investment of $2.7bn up 23% from 2013, highlighting a bright future for the sector.
Michael Liebreich, chairman of the advisory board for Bloomberg New Energy Finance, commented on the findings:
“Throughout last year, we were predicting that global investment would bounce back at least 10%, but these figures have exceeded our expectations. Solar was the biggest single contributor, thanks to the huge improvements in its cost-competitiveness over the last five years. Healthy investment in clean energy may surprise some commentators, who have been predicting trouble for renewables as a result of the oil price collapse since last summer. Our answer is that 2014 was too early to see any noticeable effect on investment, and anyway the impact of cheaper crude will be felt much more in road transport than in electricity generation.”
These growth figures come despite investor uncertainty in some parts of the sector; in the US for example, investment in wind power dropped to nearly half of that in 2013 fuelled by the US Congress failing to renew the critical Production Tax Credit subsidy. The reason that the US still grew in 2013 is the enormous growth of solar; every four minutes a new solar system is installed in the US.
Australian clean energy investment fell by a massive 35% to $3.7bn, the lowest level since 2009. Commentators argue that Tony Abbott repealing the carbon tax has increased investor uncertainty.
While the UK grew by 3%, primarily due to large financing for offshore wind projects, the government’s war on onshore wind is threatening the future of the industry there.

Despite a low oil price and investor uncertainty, investment in renewables is expected to continue to growth in 2015 due to the increased interest in clean energy in Africa, China, India, Latin America with more countries joining the clean energy market. In addition, a continuing decline in the cost of solar, and increased interest in entering the offshore wind market, will create investor confidence. Offshore wind has so far been dominated by the European players UK, Denmark, The Netherlands, Belgium and France, but the US, Canada, South Korea and China are expected to join in coming years. When this happens the clean energy market could explode and wind power could again sit at the top the leaderboard, above solar.

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