April 12, 2017 Read More →

Costs Fall and Demand Grows as Billions Pour Into Renewables

SNL:

Worldwide spending on clean energy fell by 17% in the first quarter, as investments declined year over year in the U.S. and China and a market glut weighed on solar equipment prices.

Investors poured $53.6 billion into renewable energy and “energy smart technologies” during the first three months of 2017, including $39 billion in asset financing for new energy projects, according to market research firm Bloomberg New Energy Finance, or BNEF. U.S. investment was down 24% at $9.4 billion. Despite the “quiet” start, however, BNEF said it is too early to assume annual investment will be lower than the $287 billion spent globally in 2016.

Rather than a decline in investors’ appetite for renewable energy opportunities, the first-quarter results reflect a decline in average capital costs for wind and solar power technologies. “This trend means that year-by-year it’s possible to finance equivalent amounts of capacity in these technologies for fewer dollars,” BNEF CEO Jon Moore said in a news release.

Last year saw record renewable energy development even though investment fell to its lowest level since 2013, according to a report from BNEF and the Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance. There does not seem to be a shortage of project financing. Corporate funding to the U.S. solar sector rose 14% in the first quarter, to $3.2 billion, due primarily to an increase in debt financing, according to Raj Prabhu, CEO of Mercom Capital Group LLC, a market research and consulting firm.

“We’re still seeing a market long on dollars and short on projects,” said Jesse Grossman, CEO of solar project developer Soltage LLC in an email. “Tax equity is taking some precautions but is still active and more folks are coming in to invest in that space.”

Clean-energy investment dips 17% as capital costs fall

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