A surge in investment in low carbon energy alternatives suggests the sector might be able to stand on its own without significant government subsidies.
Total investment in renewables rose to $47.7 billion in quarter one, an increase of 9 per cent in over the first quarter of 2013, according to a report from Bloomberg. That's still down from an annual peak of $318 billion in 2011.
Many considered last year to be a low point in recent investment in renewables, as industrialized countries led by the United States scaled back public subsidies for clean energy. In 2013, $254 billion was invested in the industry.
“It is too early to say definitively that 2013 was the low point for clean-energy investment worldwide and that 2014 will show a rebound," said Bloomberg Chairman Michael Liebreich. "But the first-quarter numbers are encouraging."
This year's early rally was led by demand for small scale solar, and new interest in renewables in developing countries. Of the $27.5 billion spent on new solar projects in quarter one, more than 75 percent was spent on solar projects of less than one megawatt. Investment in solar was up over 23 per cent in quarter one.
Other markets are still soft without government backing. Spending on wind fell 16 per cent, in part due to the expiry of a U.S. tax credit valued at over $2 billion. According to a recent analysis, the power generation capacity of new wind projects dropped 93 percent over this time last year, after the U.S. government failed to extend the popular tax credit.
Overall investment was weak in Europe, but doubled in the United States. In Africa and the Middle East, investment rose by more than 80 percent, while China and Brazil saw double-digit growth.
First Quarter Investment Surge Suggests Renewables Can Stand on Their Own