Despite a difficult year, the fundamental drivers for clean energy remain intact internationally, resulting in record 2012 deployment and projected growth rates that could double total market value within a decade.
This positive outlook comes from the 12th annual Clean Edge Annual Trends Report, which tracks developments and expected expansion in clean energy markets, and is published by clean-tech research and advisory firm Clean Edge, Inc.
Clean Edge projects the global biofuel, wind, and solar markets will nearly double in total value from $248.7 billion in 2012 to $426.1 billion by 2022. These eye-popping projections are even more compelling when compared to the Clean Edge 2012 report, which only expected total market value of $385.8 billion by 2021.
Promise Beneath The Peril
Without a doubt, 2012 unsettled many across the clean energy industry. Global revenue only grew by 1%, from $246.1 billion in 2011 to $248.7 billion in 2012. Bankruptcies and layoffs claimed many once-promising companies, public funding dried up, and renewable portfolio standards have been targeted by fossil fuel funded policy organizations.
But those are just red herrings, say Clean Edge, and miss the true indicators of market vitality – climate concerns, resource constraints, distributed generation, and cost parity. “2012 was a year of extreme uncertainty for clean energy markets,” said Ron Pernick, Clean Edge managing director. “But a key lesson emerged from last year – the focus for investors and industry for the near- to mid-term will be on deployment.”
Now that solar, wind, and biofuels have moved past early-stage growing pains and the market has begun maturing through consolidation, private financing of renewables is driving significant examples of clean energy deployment. Clean Edge notes Warren Buffett’s recent $2 billion Antelope Valley solar investment and Google’s 2 gigawatt (GW) solar and wind portfolio as cases in point.
Biofuels, Wind, Solar Surge Ahead
Even though clean energy’s overall outlook is rosy, it’s worth taking a closer look at the specifics for solar, wind, and biofuels. The three technologies grew exponentially from a miniscule $6.5 billion overall market value in 2000 to 2012’s nearly $250 billion valuation.
Biofuels (production and wholesale ethanol and biodiesel) remain the most-valued industry of the three, reaching $95.2 billion in 2012, up $12 billion from 2011. Production hit 31.4 billion gallons in 2012, and added production will combine with modest price increases to push total market valuation to $177.7 billion by 2022.
Wind power was the deployment leader in 2012, with a record 44.7 GW of new capacity added across the globe, led by roughly 13 GW apiece in China, America, and Europe. New installation capital costs grew a modest $2.3 billion to $73.8 billion overall, but are forecast to spike to $124.7 billion in 2022.
Solar energy may be the most complex of the three. Overall market valuation actually decreased 19% from 2011’s record $91.6 billion to $79.7 billion in 2012. However, global installations expanded at breakneck pace, reaching nearly 31 GW. Prices are expected to stabilize and cost parity will continue to grow, leading to overall revenue growth of $123.6 billion within 10 years.
2013 Trends Predict Market Leaders
As deployment accelerates, Clean Edge sees five major trends defining 2013: smart devices and big data empowering energy efficiency, distributed solar financing spreading among consumers, microhybrid vehicles accelerating fuel savings, geothermal picking up steam, and biomimicry leaving its imprint on clean tech.
Several companies stand out among these trends:
- For smart devices, Opower and Nest (it’s really the coolest thermostat ever)
- On distributed solar, Mosaic and Sungevity
- With microhybrids, Johnson Controls and Axion Power
- In geothermal, Energy Development Corporation and Ormat Technologies
- Embodying biomimicry, WhalePower and Biomimicry 3.8
So while I’m not one to put slang in any analysts’ mouth, I think the best way to summarize Clean Edge’s outlook for clean energy is clearly by mashing up two popular sayings separated by nearly 70 years: haters gonna hate, so keep calm and carry on.
Silvio is Principal at Marcacci Communications, a full-service clean energy public relations company based in Washington, D.C.