Clean Energy Investments Starting to Rise in 2Q 2009

June 11, 2009

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New investment in the global clean energy sector in the second quarter of 2009 has already surpassed investments made in the first quarter by a third, according to new research by New Energy Finance. Clean energy investments in the first quarter of 2009 were down 44 percent from the fourth quarter of 2008 and down 53 percent from the investment peak in the first quarter of 2008.

New Energy Finance expects clean energy investments for 2009 to end up in the range of $95 billion to $115 billion, a drop of 26 to 39 percent from last year.

However, a recent report, “Green Investment: Towards a Low-Carbon energy Infrastructure,” published earlier this year by New Energy Finance and World Economic Forum, shows that annual investments in clean energy need to reach $500 billion by 2020 to ensure that global carbon emissions peak before that date.

The report identifies eight emerging, large-scale clean energy sectors that are expected to significantly contribute to a clean energy infrastructure: onshore wind, offshore wind, solar photovoltaic, solar thermal electricity generation, municipal solar waste-to-energy, sugar-based ethanol, cellulosic and next-generation biofuels, and geothermal power.

New Energy Finance’s first full-year forecast for 2009 shows that the financial crisis and recession have negatively impacted the sector. The good news, says the company, is that investments in clean energy companies in the second quarter have rallied with more than $2 billion of completed secondary issues for companies such as Vestas, SunPower, Q-Cells, Evergreen Solar and Suntech Power.

New Energy Finance says green stimulus money from government programs will help, but the group estimates that more than two-thirds of this money will be spent in 2010 and 2011, with 15 percent or less or about $28 billion this year. Yet, the World Economic Forum warns that at least $515 billion annually needs to be invested in clean energy between now and 2030 to keep temperatures from rising by two degrees globally.

Jobs in the clean energy economy grew at a national rate of 9.1 percent, while traditional jobs grew by only 3.7 percent between 1998 and 2007, according to a new study by The Pew Charitable Trusts. The report also finds that this sector is poised to expand significantly, driven by increasing consumer demand, venture capital infusions, and federal and state policy reforms.

Venture capital investment in clean technology crossed the $1 billion threshold in 2005 and continued to grow substantially, reaching a total of about $12.6 billion by the end of 2008, according to the Pew report.

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