Investment worldwide in the first quarter of 2013 was $40.6bn, down 22% on a year earlier, due to a downturn in large wind and solar project financings

London and New York, 15 April 2013 – Global investment in clean energy in the first three months of

2013 was lower than in any quarter for the past four years, according to the latest figures from research
company Bloomberg New Energy Finance.

The first quarter investment figure for renewable energy, energy efficiency, and energy‐smart
technologies was $40.6bn, down 22% on the equivalent period of 2012 and 38% on the final quarter of
last year. The decline reflected the effects of policy uncertainty in key clean energy markets such as the
US and Germany, a lull in financings in some relatively buoyant markets such as China and Brazil – and
also the effect on dollar investment levels of the recent, sharp declines in technology costs, particularly
those of solar photovoltaic panels.

Michael Liebreich, chief executive of Bloomberg New Energy Finance, said: "The last 18 months have
seen a number of significant support programmes launched in the aftermath of the financial crisis come
to an end. The plummeting cost of clean energy technology has kept activity high in terms of MW of
capacity, but not so much in dollar terms.

"For investment in clean energy to play its role in stemming the growth in world emissions, we would
need to see investment levels at least double by 2020, rather than fall. Having said that, as always, there
are some regions and technologies doing well. And previous history has shown that the first quarter of
the year is generally the weakest, as banks and investors recover their breath from a rush of year‐end

Among the key details of the first quarter 2013 data were a 54% year‐on‐year fall in US clean energy
investment to $4.5bn, a 15% setback in the Chinese total to $8.8bn and a 25% drop for Europe to
$13.4bn. The rest of Asia, outside India and China, bucked the trend with a 47% jump to a record
$10.1bn, led by a surge of investment in Japan to $8.2bn.

Among different types of investment, the largest decline was in the asset finance of utility‐scale projects
such as wind farms and solar parks – this fell 34% to $19.3bn.

Policy uncertainty played a part in limiting asset finance in the early months of this year – in particular,
wind farm investment halted in the US during the winter because a key incentive, the Production Tax
Credit, appeared to be heading for expiry at the end of 2012. Ultimately, the PTC was extended but the
uncertainty about its status had already front‐loaded financings and construction of US wind into
calendar years 2011 and 2012. Relatively little new wind project construction is expected in 2013.
Investment in some European countries, notably Bulgaria and Romania, has been dampened by
"retroactive" government plans to curb the revenues of already‐operating projects. Confidence was
even shaken in Germany by a recent discussion about a retroactive change to its tariff for existing
projects, although this does not now appear likely to happen.

The largest deal of the quarter was the $1.9bn financing of the 288MW Butendiek offshore wind farm in
German waters, but there was a big gap to the next largest – the $390m financing of a 234MW Gas
Natural Fenosa onshore wind farm in Mexico, and the $345m investment decision for a 70MW Kyocera
solar PV plant in Japan.

Not only did asset finance of large projects slip in Q1, but so ‐ to a lesser extent ‐ did investment in
small‐scale installations of less than 1MW. Investment in the latter, mainly PV units on residential and
commercial rooftops, dipped 8% in the first quarter to an estimated $18.5bn, driven largely by the
reduction in solar panel costs over the course of 2012. The average PV module in March 2013 was
selling on world markets for 81 US cents per Watt, down 16.5% on the 97‐cent figure of a year earlier –
and an extraordinary 81% below that for early 2008.

Liebreich commented: "The slump in the price of solar hardware has been remarkable. It is
fundamentally driven by improvements in technology and economies of scale throughout the supply
chain. But it also reflects the impact of substantial overcapacity – the industry has moved from supplyconstrained
to glut – which has had a savage effect on producer margins. We forecast that the number
of GW of solar installed in 2013 will grow by about 20% compared to last year – but even that is not
going to be enough to absorb all of the over‐capacity. It is going to be another tough year for
manufacturers, and a good year for installers, as long as they have access to finance."

The brightest signs in the Q1 2013 data relate to investment raised in the public markets, or stock
exchanges. This was been very depressed in recent years, in the face of an 80% decline in sector share
prices to a low in late July last year. Since then, however, there has been a rally of around 30% in the
WilderHill New Energy Global Innovation Index, or NEX, which tracks the performance of 96 clean
energy stocks worldwide.

The slightly improved picture on share valuations helped to stimulate a rebound of 89% in public
markets investment in clean energy companies, to $1.7bn in Q1. The largest deal was the $394m IPO in
London of Greencoat UK Wind, a fund investing in operating wind projects, including an unprecedented
investment of $76m by the government's Department for Business, Innovation and Skills.

Venture capital and private equity investment in clean energy was $1.3bn in the first quarter, down 29%
on the same quarter in 2012. Among the biggest VC/PE deals between January and March were $308m
of private equity expansion capital for National Electric Vehicle Sweden, and $125m of expansion capital
for US solar installer Sungevity.

The biggest increase in investment in any region was in Asia‐Oceania excluding China and India, its
record quarterly figure of $10.1bn thanks mainly to a jump in small‐scale project outlays from $5bn a
year earlier, to $7.9bn in Q1 2013. Japan saw small‐scale solar investment reach $6.7bn in Q1 2013, up
more than double from a year earlier.

Europe saw a decline in small‐scale project investment, fuelled partly by the sharp falls in solar
technology costs. Nevertheless, Germany and the UK experienced modest growth in overall investment
in Q1 2013, of 8% and 1% respectively compared to a year earlier. Germany reached $3.9bn in the first
quarter thanks in part to the Butendiek transaction, and the UK figure was $1.8bn. Investment in Spain
in Q1 2013 was less than $100m, down 96% on the first quarter of 2012. Italy and France also dropped
off, reaching $1.5bn (down 61%) and $0.9bn (down 33%) respectively.

Total new investment in clean energy worldwide in 2012 was $268.7bn1, down from a peak of $302.3bn
in 2011 but still more than five times the total in 2004.


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