China buoyed global solar market during two years of hard times

A new report has found that China’s major solar power push has helped to drive a 17 per cent surge in annual global renewable energy investment in 2014 – putting an end to a two-year market decline.

UNEP’s 9th annual Global Trends in Renewable Energy Investments report (PDF), prepared by the Frankfurt School–UNEP Centre, and Bloomberg New Energy Finance, has found that the global renewable energy spend totalled $270 billion in 2014, up from $232 billion in 2013 – a rebound made all the more remarkable by the challenge from sharply lower oil prices.

The 17 per cent jump marks the the first annual increase in dollars invested in and committed to renewables (excluding large hydro-electric projects) in three years – and sits just 3 per cent below the all-time record spend of $279 billion in 2011.

As in previous years, says the report, the 2014 market was dominated by record investments in solar and wind, which accounted for 92 per cent of the overall spend.

For the year, investment in solar jumped 25 per cent to $149.6 billion – the second highest figure for solar ever – while wind investment increased 11 per cent to a record $99.5 billion.

In 2014, some 49GW of wind capacity and 46GW of solar PV capacity were added worldwide, both records.

In the solar sector, the “dominant feature” according to the report was the “unprecedented expansion in China and Asia, who between them invested $74.9 billion in solar in 2014 – around half the world’s total.

“In China, utility-scale projects of more than 1MW made up about three-quarters of the solar investment of $40 billion, which was a 45 per cent increase on the previous year,” said the report.

“In Japan, on the other hand, investment was dominated by small scale projects of less than a megawatt, which accounted for 81 per cent of a total solar investment of $34.8 billion, a 13 per cent increase on 2013.”

The report, released on Wednesday, also named 2014 as the best year ever for newly installed renewable energy capacity, with a total of 103GW generating capacity added around the world – nearly half of the net power capacity added worldwide, and an amount equal to the output of all 158 nuclear power plant reactors in the US.

This compared to 86GW of renewables capacity added in 2013, 89GW in 2012 and 81GW in 2011.

The report notes that the continuing sharp decline in technology costs – particularly in solar, but also in wind – meant that every dollar invested in renewable energy bought significantly more generating capacity in 2014.

But according to UN Under-Secretary-General and Executive Director of UNEP Achim Steiner the growing penetration of renewable generation in the world’s developing economies has been one of the most important and encouraging aspects of the 2014 report.

According to the report, China saw by far the biggest renewable energy investments last year — a record $83.3 billion, up 39 per cent from 2013.

The US was second, at $38.3 billion – 7 per cent rise on the year (although below its all-time high reached in 2011), and Japan third, at $35.7 billion – a 10 per cent jump on 2013 and the nation’s biggest total ever.

Australia, meanwhile, featured mainly due to its “plunge” in utility-scale financing, which fell to $330 million in 2014 from $2.1 billion in 2013 – “hit by indecision over the future of the country’s renewable energy target.”

This policy uncertainty had even caused Australia’s small-scale solar financing to decline in 2014, the report said, down 11 per cent “despite its robust solar resources and well-developed installation industry.”

It had also seen Australia fall off the list of the Top 10 countries for renewable energy investment (see table below), said the report – alongside Italy, dragged down by retroactive subsidy changes.

In their place, the Netherlands had risen to number nine on that list, after charting the year’s fastest growth – 266 per cent – to $6.4 billion.

© 2015 Solar Choice Pty Ltd

Giles Parkinson

Giles Parkinson regularly contributes unique content to Solar Choice News. Giles is the founder and editor of clean energy industry news service RenewEconomy. He is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the founding editor of Climate Spectator.
Giles Parkinson