Global clean energy investment has fallen to a three-year low, according to the latest analysis by Clean Energy pipeline.
Project finance, venture capital and private equity in Europe, China and North America are all at their lowest activity levels since 2009.
Clean energy project finance saw a 28% dip to $27.3 billion compared with the previous quarter – over 50% down on the same period last year.
The impending end of the production tax credit for renewables generators in the US was one of the prime reasons for the decline, with wind energy project finance in the US down 62% quarter-on-quarter.
Venture capital and private equity also bit a new low, falling for the fourth consecutive quarter to $1.7 billion, 6% down on the previous quarter and a worrying 60% down in the same period last year.
But cuts to feed-in tariffs in Europe appear to have had a less disruptive effect so far, with falling costs of solar panels in particular boosting investment in sub-1 MW projects 26% on the same period last year to reach $23.6 billion.
The only other positive note is mergers and acquisitions (M&A) activity, which was up 65% compared to the same quarter last year reaching $16.3 billion thanks to a series of large deals in recycling and waste and energy efficiency.
Meanwhile, advanced materials and green transportation appear to be bucking the overall downward trend, up 45% and 98% respectively quarter-on-quarter to $199 million and $307 million.
“Investment activity was disappointing but not unexpected last quarter,” says Douglas Lloyd, CEO of Clean Energy pipeline. “It’s a brutal environment to raise capital when you factor in major policy uncertainty and low natural gas prices in the US, feed-in tariff cuts in Europe and an overall crisis of confidence in the global financial markets.”
The problems in US and European markets have been compounded by a 30% drop in project finance in Asia in the last quarter, Lloyd adds.
For further information:
Clean energy investment bounces back 24% to hit $60 billion (11-Jul)
Bank of America earmarks $50 billion for green economy (13-Jun)
World Bank launches strategy for green development (13-Jun)
Wells Fargo launches $100 million green fund (6-Jun)
05 October 2012