2012 was not the best year for renewables. While 2011 saw record-shattering investment pouring into the renewables sector, it was already evident by Q3 of 2012 that clean energy investment had dropped dramatically.
Those numbers would appear to hold true despite an end-of-year rally in Q4. Bloomberg New Energy Finance reports that clean energy investment fell 11 percent over the course of the year compared to 2011, with the sector being hampered by policy uncertainty in Europe and the U.S., as well as competition from cheap natural gas and the tricky predicament of rapidly falling technology prices. It wasn't all bad news, however, with emerging markets making up for much of the shortfall in the West. This from Bloomberg:
...[S]trong growth in China, South Africa and Japan, which benefitted from the launch of the country's post-Fukushima renewable energy subsidy scheme, was unable to fully offset a drop in U.S. investment of almost a third caused by policy uncertainty and increased competition from relatively low cost gas, as well as falls in investment for Spain and Italy of 68 percent and 51 percent respectively.
Given the renewal of many clean energy credits in the fiscal cliff deal and the reelection of Barack Obama, it will be interesting to see whether conditions improve as we slide into 2013. We've already seen a contentious U.K. energy bill hailed as a victory for renewables, with major large-scale solar projects and gigantic wind-energy projects moving forward as a result. Here's hoping a clarification of the policy environment elsewhere will bring about a similar recovery.
Given the extreme weather we've witnessed on both sides of the New Year, the investment world would do well to heed its own warnings on climate change and consider a broader concept of ROI when it comes to ensuring a stable future for our economy and our planet.