Bridges Trade BioRes • Volume 12 • Number 1 • 23rd January 2012

US Retakes Top Position as Renewable Energy Investor

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The US has surpassed China to become the leading global investor in clean energy, according to new data released by research house Bloomberg New Energy Finance. The finding marks the first time the US has held the top position since 2008.

Investment in clean energy rose thirty-three percent in the US to a record US$55.9 billion while China grew investment by only one percent to US$47.4 billion. According to reports, the shift is due, in large part, to a subsidy programme initiated by the Obama Administration’s stimulus package which included grants to renewable energy start-ups and loan guarantees to private investors.

Experts caution, however, that the US may be hard-pressed to retain the top spot in coming years as large parts of the subsidy programme for renewable energy have already expired. For its part, Washington has suggested that government support may continue in some form.

The bolstering of renewable energy initiatives is emerging as a cornerstone of the Obama Administration’s political platform in the run-up to presidential elections, scheduled for November. The Democrats have recently released television advertisements highlighting the current administration’s clean energy record and the president last week blocked plans to build a major pipeline from Canada’s controversial oil sands to US refineries in Texas and elsewhere (see related story, this issue).

Many financial analysts agree that accelerating renewable energy initiatives in the US is critical. But in order to compete with traditional fossil fuels on the open market, the use of renewable energy sources - like solar and wind - will have to be expanded broadly to bring costs down.

“We are on our way to the point where solar power costs the same as fossil fuel power,” said Kevin Parker, an analyst at Deutsche Bank. Recent studies show that the price of a photovoltaic module has fallen close to seventy-five percent over the past three years. Some analysts estimate that the production of solar power could be competitive by 2020.

Growing investment in clean energy was not a trend confined to the US, as worldwide investment rose five percent to a record US$260 billion. Growth in solar investment led the way, increasing by thirty-six percent to US$137 billion, representing over half of all renewable energy investment. Investment in wind technology, on the other hand, experienced a sharp decline, falling by seventeen percent.

Notably, renewable energy investment has continued to rise in spite of marginal progress on establishing a binding global cap on carbon-emissions and generally poor economic conditions.

ICTSD Reporting; “US regains lead in clean energy investment,” FINANCIAL TIMES, 12 January 2012; “Clean Energy Investment Hits Record In 2011 As U.S. Reclaims Lead From China,” FORBES, 1 December 2012; “US Replaces China as Top Clean Energy Investor,” ENVIRONMENTAL LEADER, 17 January 2012.