Global investment in the renewable energy sector surged by 17% to a record $257 billion in 2011, a new report reveals, while total investment in solar power jumped by a whopping 52%.
Global Trends in Renewable Energy Investment 2012 is the fifth edition of the United Nations Environment Programme report. It’s based on data from Bloomberg New Energy Finance.
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The report reveals global investment in the renewable energy sector hit another record in 2011, up 17% to $257 billion.
According to United Nations Under-Secretary General Achim Steiner, the executive director of UNEP, this was a six-fold increase on the 2004 figure and 93% higher than the total in 2007.
“There may be multiple reasons driving this renewable investment, from strengthening regulatory frameworks to decreasing costs,” Steiner said in the report.
“Whatever the drivers, the strong and sustained growth… is a major factor that is assisting many countries towards a transition to a low-carbon, resource-efficient green economy.”
In 2011, renewable power (excluding large hydro) accounted for 44% of new generation capacity added worldwide, up from 34% in 2010.
“So we’re certainly seeing a green growth trajectory in the power sector, even if we have quite some way to go to achieve an energy mix that is truly sustainable,” Steiner said.
Steiner said there are many areas where sustainable development is ready for “a major acceleration and scaling up”.
“Clean energy systems, by dint of their technology, the costs, the employment potential and the opportunities, are among the ripest,” he said.
One of the dominant features of the renewable energy sector in 2011 was falling technology costs, the report said.
It’s also worth noting total investment in solar power jumped 52% to $147 billion in 2011, reaching a figure almost twice as high as that in wind energy, at $84 billion, down 12%.
“Last year was not the first time that solar has led wind in terms of dollars committed, but it was the first time that the gap in favour of solar was anything apart from narrow,” the report said.
According to the report, the performance of solar owed most to “booming” rooftop PV installations in Germany and Italy, as property owners took advantage of falling panel prices.
Small-scale projects attracted $76 billion of investment worldwide in 2011, up a quarter from the $60 billion spent in 2010, despite falling prices for PV panels.
In addition to Italy and Germany, Australia, Japan, the United States, the United Kingdom and France also saw significant investment in small-scale PV.
Tim Buckley, managing director of Australian green investment firm Arkx, expects investment in solar power to continue, partly because the cost of solar is dropping dramatically.
“One of the key changes in solar globally is it’s gone from being very focused on Germany and Italy to being a more global phenomenon,” Buckley says.
“If you go back two or three years ago, solar was very much a potential technology. Now it’s a reality, and grid parity is rapidly approaching.”
“Solar resources in Australia are huge and world-leading… The case for solar makes a lot of sense in Australia.”