Report: Worldwide Clean Energy Investments on the Upswing

June 10, 2009

After a difficult first quarter, new worldwide investments in clean energy are now gaining momentum, according to analysts at New Energy Finance. Clean energy investments in the first quarter of 2009 were down 44% from the fourth quarter of 2008 and down 53% from the investment peak in the first quarter of 2008, according to the market research firm. But even though there are several weeks left in the second quarter, clean energy investments are already surpassing the first-quarter investments by more than a third. New Energy Finance notes that public market investments have rallied sharply, while bankers active in the clean energy sector are optimistic about a gradual improvement in the availability of project financing as the year progresses. The gradual injection of worldwide "green stimulus" funds, including funds from the American Reinvestment and Recovery Act, are also expected to assist the recovery.

Although the situation is improving, clean energy investments are still expected to fall short of the investments in 2008, which reached a record $155 billion. New Energy Finance expects clean energy investments for 2009 to end up in the range of $95-$115 billion, a drop of 26%-39% relative to last year. The drop is particularly troubling in light of a report published earlier this year, which showed that annual investments in clean energy needs to reach $500 billion by 2020 to ensure that global carbon emissions peak before that date. That report was prepared by New Energy Finance and published by the World Economic Forum. The World Economic Forum put it differently, claiming that at least $515 billion must be invested annually between now and 2030 to keep global temperature increases in check. Noting the drop in global interest rates, that report also concluded that "at some point a flood of cheap money will begin to flow, and when it does, clean energy infrastructure ... will be among the first (sectors) to benefit." See the New Energy Finance press release (PDF 20 KB) and the World Economic Forum's press release and full report (PDF 2.9 MB). Download Adobe Reader.