Is the renewable energy boom slowing down?
By Todd Woody - Mar 13, 2013 - qz.com
The numbers are in on 2012 and it was not the best of years for renewable
energy, according to a report released today by market research firm Clean
After years of breakneck growth, the value of global wind industry installations
rose by just $2.3 billion from the previous year to $73.8 billion in 2012.
Worldwide wind capacity jumped to a record 44,700 megawatts, but that was only
about 8% up on the previous year.
The value of photovoltaic installations actually fell for the first time,
from $91.6 billion in 2011 to $79.7 billion in 2012, as solar panel prices
to plummet and Chinese manufacturers grappled with overcapacity. Total solar
capacity hit a record 30,900 megawatts in 2012 but revenues fell for the
first time in a dozen years.
Biofuels were the one bright spot, with the market growing to $95.2 billion
in 2012 from $83 billion the previous year.
Last year “proved to be an unsettling and difficult year for clean energy,” the
report’s authors wrote. “High-profile bankruptcies and layoffs
plagued many clean-tech companies, overall venture investments retreated
in the face of increasingly elusive returns, and the industry was begrudgingly
transformed into a partisan wedge issue during the highly contentious US
So why does the green energy business seem to be in something of a funk?
The shale gas boom is one reason, allowing investors and utilities to look
to a cheaper, cleaner-burning fossil fuel that can provide power around
the clock. The upheaval in the Chinese solar industry, home to 80% of the
photovoltaic manufacturing, and the failure of US startups developing next-generation
solar technology to gain ground has also unnerved investors. And advanced
biofuels have yet to make a commercial impact.
Still, Clean Edge estimates that the global wind, solar and biofuels market
will grow from $248.7 billion in 2012 to $426.1 billion in 2022. And to
put 2012 in perspective, the value of the worldwide wind market a decade
just $4 billion, the solar market was worth $2.5 billion, and the biofuels
market was too small for Clean Edge to measure.
Venture capitalists’ enthusiasm for green technologies has waned
as the market has grown and renewable-energy projects have reached the
that needs more heavyweight funding. Total investment dropped from $5 billion
in 2012 from $6 billion in the previous year.
Luckily, investors like Warren Buffett have stepped into the void. Buffett’s
MidAmerican Energy Holdings, for instance, recently acquired two California
solar power plants for $2 billion while Google has invested $200 million into
a Texas wind farm. Google alone now has invested in renewable energy projects
that generate 2,000 megawatts of electricity, enough to power 500,000 average
American households at peak output—or a whole lot of server farms.