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2013: Renewable Energy’s Best of Times, Worst of Times

2013 was a classic good news-bad news year for renewable energy with surging solar, green building, and EVs counterbalanced by slowing wind and investment.

If 2013 was a “down year” for renewable energy, as some have posited, how incredible could an up year be for our transition to a clean energy economy?

Exponential increases in solar power, green building, electric vehicles, as well as modest growth in biofuels overcame tumbling wind energy installations and investment levels to keep global markets steady in 2013, according to Clean Edge’s annual Clean Energy Trends 2014 report.

But beyond $248 billion in overall investment, the biggest story in renewable energy during 2013 was the ascendance of solar power – for the first time, the world installed more new solar capacity than wind, and overall solar capacity could pass wind as early as 2021.

Surging Solar, Green Building, EVs, and Biofuels

2013 was “a classic good news-bad news story” for renewable energy worldwide, according to Clean Energy. The solar industry’s growth can’t be understated – 18% market growth pushed the solar photovoltaic industry to $91.3 billion from $79.7 billion in 2012, with a record 36.5 gigawatts (GW) new installed capacity led primarily by China’s 12GW push.

Costs are key here. PV panel prices continued to drop last year, falling 3% to $2.50 per watt, less than one-third the cost of installation just 10 years ago, and solar has hit grid parity in several nations. Clean Edge predicts prices will continue falling 7% per year over the next decade, reaching $1.21 per watt, powering double-digit annual capacity growth, and more than $158 billion in investment by 2023.

While solar led the way, it wasn’t the world’s only good clean tech story in 2013. Green building continued a “phenomenal growth trajectory” evidenced by 8% growth in LEED structure certifications worldwide. Overall since 2000, LEED-certified green buildings have increased at a 68.9% compound annual growth rate (CAGR), and net zero buildings “have moved from pipe dream to reality at notable scale around the world.”

Clean transportation also accelerated last year, passing 2.3 million in global sales of hybrid and electric vehicles (EV), a 26.4% increase on 2012. Annual sales have more than doubled since 2010, and the hybrid/EV industry has a 38% CAGR since 2000. Clean Edge expects the road trip to continue, driven by a 54.5 miles-per-gallon by 2025 U.S. fuel economy target and public outcry to curb smog in China.

Biofuels grew modestly, with global production of ethanol and biodiesel sprouting up to $97.8 billion in investment compared to $95.2 billion in 2012. Global production held steady at 31 billion combined gallons, but global markets are expected to grow 4.5% per year over the next decade to $145.6 billion combined value in 2023.

Wind and Investment, Not So Much

Unfortunately, 2013 wasn’t all good news. Wind energy hit the doldrums in 2012, with investment falling precipitously to $58.5 billion from $73.8 billion in 2012, and just 35.5GW new capacity installations worldwide – a far cry from a record 44.7GW the previous year.

The wind market would have been even worse if not for China, which installed 16.1GW in 2013 (a whopping 45.4% of all global new capacity) and extended its status as the world’s leader with 91.4GW cumulative installed capacity – 30GW ahead of the US and nearly 60GW ahead of Germany. For context, the US market added just 1GW last year as Production Tax Credit uncertainty created industry headwinds. Clean Edge forecasts fuller sails in the future, with modest growth leading to $93.8 billion in market investment by 2023.

Clean energy investment’s ledger ran into the red again last year, with total 2013 clean energy investments dropping to $254 billion, down from $286.2 billion in 2012 and a peak of $317.9 billion in 2011. Even China experienced less investment, with a 3.8% funding decline, the first year-to-year drop in more than a decade. Europe and the US fared even worse, with 41% and 8.4% plunges, respectively.

But even though overall investments continued their downward trend, Clean Edge sees a few bright spots. Clean energy funding jumped 55% in Japan to $35.4 billion, while some of the world’s biggest corporations made major investments, and the performance of clean tech companies in publicly traded markets outpaced other industries.

 Are Better Days Ahead?

Add it all up, and clean energy may have seen its worst years. Clean Edge projects that the combined clean tech industries will continue to grow over the next 10 years, increasing to $397.9 billion in 2023, part of an expanding need to decarbonize across the world.

“The adoption of clean energy is set against a bigger-picture context that finds many of the world’s largest energy-using nations struggling with critical choices for their energy future,” said Ron Pernick, Clean Edge co-founder and managing director. “Climate disruptions, smog alerts, planned and unplanned nuclear power shutdowns, and resource scarcity are all driving significant change, accelerating double-digit adoption growth of solar PV, hybrid and electric vehicles, green buildings, and other clean-tech solutions.”

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Written By

Silvio is Principal at Marcacci Communications, a full-service clean energy and climate policy public relations company based in Oakland, CA.


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Originally published on Transport & Environment.

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