Oil prices remain low, the U.S. federal government is still determined to prop up fossil fuels, and populist outrage in France has extinguished its flailing president’s determination to take on climate change.
With that context, let’s first lay out the bad news: global clean energy investment declined by 8 percent in 2018 compared to the previous year.
The good news? According to Bloomberg New Energy Finance (BNEF), last year was the fifth year in a row that clean technology investment surpassed $300 billion worldwide. Wind power investments increased by 3 percent to $128.6 billion, and offshore wind enjoyed its second-best year ever. Financing in smart-meter technology, as well as electric cars, also witnessed boosts in spending.
What, then, explains the drop-off? BNEF’s researchers pointed to a dip in solar power investments, which plunged during 2018 by almost a quarter compared to 2017 levels. Policy changes in China explain much of this decline, as that country’s government sought to tamp down its solar boom by reducing access to its feed-in tariffs. But that drop can also be explained in part by the fact that the capital costs of deploying solar are cheaper than they were just a few years ago.
Advocates for renewables should take heart in the fact that clean energy investment within the U.S. ticked upward by 12 percent, largely due to power purchase agreements inked by large companies including Facebook and Google.
What will be compelling to watch in the coming year is how many smaller nations will ramp up investments in renewables. Currently, the list of countries that have invested at least $2 billion stands at about two dozen. And there are some compelling cases that merit attention. Taiwan’s 2018 investment of $2.4 billion is a 134 percent spike from the previous year; South Africa’s $4.2 billion spend is a 40-fold increase from 2017. Weary of doing business with nations such as Saudi Arabia and wanting to plan for long-term resilience, renewables offer countries with few energy resources the opportunity to control their energy destiny.
As our clean technology reporter Tina Casey has long chronicled, the fact that renewables are reaching cost parity with fossil fuels makes large-scale investment decisions difficult to overlook; and historically volatile energy prices also position solar and wind projects as a attractive options to hedge against rising prices.
Solar and wind power are always the usual suspects for clean energy investments, but there are other sectors to keep an eye on. Energy storage will continue to grow as the cost of battery technology becomes cheaper while increasing in efficiency. More automakers, including Toyota and Hyundai, for example, are interested in hydrogen as developments in that technology show promise.
Don’t be surprised if 2019 turns out to be another year where clean energy deployments increase, with their total value holding steady or seeing another decline. The point is that the renewables genie is out of the bottle, and no rollback of policies will stuff it back in any time soon.
Image credit: Asian Development Bank/Flickr