Last year saw the second-highest ever figure invested globally in clean energy, with $333 billion poured into the sector worldwide, finds a new report from Bloomberg New Energy Finance (BNEF).
This figure is a 3% increase on 2016 investment levels, and is noteworthy because solar system costs per MW (at utility scale) are approximately 25% lower than they were in 2015, which remains the record-holder for total investment with $360 billion.
In 2016, BNEF says that $325 billion was invested globally in clean energy. For solar specifically, last year saw an 18% increase in investment activity. Globally, $161 billion was spent in the solar sector in 2017, with China accounting for just over half – $86.5 billion – of that figure.
Compared to 2016, China increased its solar investment by 58% last year, installing 53 GW of new capacity against 30 GW added in 2016. According to BNEF’s head of Asia-Pacific Justin Wu, China’s +20 GW growth can be explained in two ways: “First, despite a growing subsidy burden and worsening power curtailment, China’s regulators, under pressure from the industry, were slow to curb [the] build of utility-scale projects outside of allocated quotas. Developers of these systems projects are assuming they will be allocated subsidy in future years,” Wu explained.
Secondly, added Wu, the cost of solar in China continues to fall rapidly, triggering a growth in rooftop development and other distributed sources. “These systems are not limited by the government quota,” Wu said. “Large energy consumers in China are now installing solar panels to meet their own demand, with a minimal premium subsidy.”
Other countries to record sizable investment increases in solar in 2017 include Australia and Mexico, while former market-leaders such as Japan, Germany and the U.K. registered further investment declines. Mexico recorded an incredible 516% increase as it spent $6.2 billion on clean energy in 2017, but European investment in clean energy fell 26% year-over-year to $57.4 billion.
In the U.S., political uncertainty caused by the Section 201 petition no doubt had an impact on investment appetite: clean energy spending posted an anemic 1% growth to reach $56.9 billion.
By sector, solar power attracted 48% of all funding, making it the fastest-growing electricity generation technology in 2017. Wind power investment fell 12% to $107.2 billion, while ‘energy-smart’ technologies such a smart meters and battery storage saw investment increase by 7% to propel the sector to $48.8 billion investment last year.
BNEF estimates that globally 98 MW of solar was installed during 2017.