Bloomberg New Energy Finance reported its second quarter 2012 global clean energy investment figures this week, and while they looked good compared to a horrendous first quarter, they painted a pretty rough picture by most other points of comparison.
Global capital investment in green energy projects stood at $59.6 billion in the second quarter. That’s up 24 percent from the first quarter’s $27 billion, which was the worst showing since the recession days of early 2009, but it’s also down 18 percent from the near-record $72.5 billion recorded in the second quarter of 2011.
Across different classes of investment, utility-scale renewable power project asset finance marked the strongest gain at $35.9 billion. Once again, that was a 50-percent improvement from the first quarter’s $24.2 billion, but a 24-percent decline from the same quarter of 2011.
And these were the investment categories that included power generation assets, which have been able to take advantage of falling prices for the solar panels and wind turbines they’re putting up. That sector held up much better than categories such as public market finance and venture capital investment, where green technology and equipment companies have been fighting ongoing economic turmoil in Europe and political opposition in the United States, as well as a challenging stock market for green companies.
Earlier this week, the Cleantech Group reported second-quarter green venture investment of $1.6 billion, a drop from both first-quarter and year-ago figures, and a second-quarter green IPO tally of $1.8 billion, up from $1 billion in the first quarter but down from $2.2 billion in the same quarter last year.
Bloomberg New Energy Finance’s figures, while not exactly aligned, showed similar trends, with VC and private equity investment falling to $1.5 billion in the second quarter, down 28 percent from the first quarter and 39 percent from the same quarter in 2011. The first quarter’s $1.2 billion in public market investment in clean energy, while nearly double the first quarter’s figure, was also a 75-percent drop from the second quarter of 2011, the firm reported.
Indeed, only one new class of investment saw gains compared to the same quarter last year. That’s small-scale clean power generation, mostly solar power projects of 1 megawatt or less, which the firm estimated to be worth $21.5 billion in the second quarter, 13 percent more than in 2Q 2011. (It’s the first time Bloomberg New Energy Finance has reported small-scale project figures on a quarterly basis.)
That, of course, can largely be attributed to the plummeting prices of solar panels, which have fallen 75 percent over the past three years, BNEF CEO Michael Liebreich said in Wednesday’s release. Globally, solar accounted for $33.6 billion of investment in the second quarter, while wind accounted for $21.6 billion.
While Germany and Italy remain the largest solar markets, installations in the U.S. are catching up despite their higher cost: California passed 1 gigawatt of customer-owned rooftop solar power capacity in June, and Japan and China are growing strongly as well, the report found.
China’s booming green energy growth was particularly impressive in the second quarter, at $18.3 billion, a 92-percent increase from the same quarter last year. In comparison, European investment grew 11 percent to reach $20 billion and U.S. investment grew 18 percent to reach $10.2 billion.
Beyond being the world’s biggest wind turbine market, China has quadrupled its domestic solar installation targets, Liebreich noted. That could mean that the Chinese solar manufacturers that have driven down prices to record low levels and driven U.S. and European solar manufacturers into bankruptcy may start to see demand from within China start to absorb some of their excess supply, he said. The Shanlu & Shengyu Bayannur Wuyuan solar project was China’s single largest, at $316 million.
China also earned the distinction of hosting all nine of the green technology IPOs tracked by the Cleantech Group in the second quarter. The biggest was a $340 million May IPO for Chinese solar water heater company Jiangsu Sunrain Solar Energy, and others included renewables company Huadian Fuxin Energy for $322 million, silicon ingot maker Longi Silicon Materials for $250 million, and PV equipment maker Jingsheng for $173 million.
In other clean energy industry sectors, Bloomberg New Energy Finance found that smart grid and advanced transportation brought in $1.1 billion in the second quarter, which was up 74 percent from the first quarter but below second quarter 2011 figures. Smart grid in particular has seen venture capital investment dwindle over the previous several quarters, but merger and acquisition activity is on the increase.
Less impressive second-quarter stats were recorded for biomass and waste-to-power, which saw investment of $1.4 billion, down 22 percent from the first quarter, and biofuels, with $750 million, down 12 percent from the previous quarter, BNEF reported.