2013 Who’s Winning the Clean Energy Race?
April 3, 2014 (Pew Charitable Trusts)
For the past five years, Pew has tracked investment and finance trends in the world’s leading economies. Over
that period, the clean energy industry has been buffeted by a global recession, broad changes in energy markets,
and uncertainty surrounding international policies on clean energy and climate change. Despite these challenges,
the clean energy sector is now an annual $250 billion component of the world economy.1
Although global clean energy investment in renewable sources, biofuels, smart energy, and energy storage
fell 11 percent in 2013, to $254 billion, a number of developments indicate a promising future for clean energy.
First, the prices of leading technologies such as wind and solar have dropped steadily for decades; they are
increasingly competitive with century-old and more financially volatile conventional power sources. Second,
clean energy manufacturers are moving forward and have effectively weathered withering competitive pressures,
consolidations, and policy changes. Investor confidence about the long-term future of renewable energy was
reinforced in clean energy stock indexes in 2013, which rose sharply over the year. Third, markets in fast-growing,
developing countries are prospering; these economies see distributed generation as an opportunity to avoid
investments in costly transmission systems, comparable to the deployment of cellphones instead of costly
landline infrastructure. Even in the contracting markets of Europe and the Americas, which have affected the
overall industry, policymakers are recalibrating rather than abandoning clean energy policies.
Worldwide investment dips for 2nd straight year
Over the past two years, clean energy investment has declined 20 percent from a 2011 record of $318 billion.
Although investment in non-G-20 markets grew by 15 percent, with promising sectors emerging in such places
as Chile and Uruguay, investment in the larger and more established markets of G-20 countries2
16 percent. Only three G-20 countries—Japan, Canada, and the United Kingdom—had increased levels in clean
energy investment in 2013.
Asian investment grows steadily, Europe slides sharply
Clean energy investment in the European region, which is comprised of Europe, the Middle East, and Africa, slid
sharply for the second year in a row. It fell 42 percent, to $55 billion, less than half the region’s 2011 record of
$115 billion. Investment levels declined sharply in once-vibrant markets, with levels in Germany down 55 percent
and Italy 75 percent. In contrast, the Asia and Oceania region continued to grow steadily in 2013, with levels
increasing 10 percent, to $102 billion. China continued to be the leading regional and global market, attracting
$54.2 billion in 2013. Japan experienced the fastest investment growth in the world, increasing 80 percent, to
almost $29 billion.
Investment levels decreased in the Americas for the second year in a row to $52 billion, 8 percent lower than in
2012. Most notably, the largest markets in North and South America—the United States and Brazil—were down
by 9 and 55 percent, respectively. For the first time, clean energy investment in Brazil was less than the combined total for the rest of Latin America. Canada was the second-fastest growing
market in the G-20, increasing 45 percent, to $6.5 billion.
Wind investment holds steady as solar slips
Wind sector investments held relatively steady in 2013, falling 1 percent,
to $73.5 billion, and accounted for 39 percent of the G-20 total. Financing
dropped significantly in Turkey and Brazil, but those losses were offset by
gains in Canada and the United Kingdom. China continued to attract the
largest share of wind energy investment, accounting for 38 percent of the
For the fourth year in a row, solar energy technologies garnered the
largest share of G-20 clean energy investment—52 percent of the total.
Nonetheless, investment in solar technologies fell by 23 percent in 2013,
to $97.6 billion. Steep drops in Germany and Italy were among the reasons
that collective investment in the solar sector fell below the $100 billion
mark for the first time in seven years.
Energy efficient/low-carbon technologies, which include smart meters
and energy storage devices, constituted the only clean energy sector
with rising investment levels, growing 15 percent to $3.9 billion. G-20
investment in biofuels sank by 41 percent, to just under $3 billion. Other
renewable energy technologies, including geothermal, biomass, and
waste-to-energy, dropped by 31 percent, to $10.7 billion.
Asset financing declines, but clean energy stocks soar
Investment in small-distributed capacity, which is residential-scale solar projects of less than 1 megawatt,
declined 29 percent in 2013, as did financing for large-scale assets. Together, these two classes account for more
than 80 percent of clean energy investment. Asset financing decreased 14 percent in 2013, to $123.7 billion.
China maintained its wide lead in asset financing for large projects, attracting $53.3 billion—more than 40
percent of the total.
In line with falling solar investments overall, residential and small commercial solar capacity investments fell to
$52.5 billion, the lowest level recorded in the past four years. Japan garnered 44 percent, or $23 billion of small-distributed capacity investments.
Venture capital/private equity investment levels in the G-20 declined for the fourth consecutive year, falling 32
percent, to $4 billion. The United States continued to play a leading role in the venture capital/private equity
category, accounting for 55 percent of 2013 investments.
Stock market investors’ confidence in the clean energy sector grew in 2013. Stock prices on the WilderHill New
Energy Global Innovation Index, or NEX, which tracks leading renewable energy stocks, rose by 54 percent over
the year—outpacing gains in major stock indexes such as the Standard & Poor’s 500. Consistent with rising stock
prices, public market financing for company scale-ups across the G-20 increased by 176 percent, to $9.8 billion.
Solar takes the lead in annual capacity additions
For the first time in more than a decade, solar outpaced all other clean energy technology in terms of new
generating capacity installed. Solar capacity additions increased by 29 percent compared with 2012 even though
investment in the sector declined by 23 percent. This was due in part to ongoing price reductions, including
significant cuts in manufacturing costs, but it was also a result of investment shifting from small-scale projects to
less expensive large-scale ones. All told, a record 40 gigawatts of solar generating capacity was installed in 2013.
By comparison, less than 40 GW of solar was installed from 2001 to 2010.
Installations in the wind sector were 40 percent less than a year earlier, declining by 21.6 GW. The United States
accounted for more than 56 percent of that drop, as wind installations collapsed in light of delayed renewal
of the production tax credit. Nonetheless, with 27 GW of capacity added worldwide in 2013, cumulative wind
installations surpassed 307 GW in 2013—more than 40 percent of the world’s clean energy capacity.
On a regional basis, installations in 2013 dropped 48 percent in the Americas and 22 percent in the Europe,
Middle East, and Africa region. Installations in the latter region were down for the first time in more than 10
years. By contrast, clean energy capacity in the Asia and Oceania region increased by 64 percent, with more than
50.1 GW of capacity installed. More than a third of Asia’s gains in capacity were in the Chinese and Japanese
solar sectors, which added a total of 18.8 GW. Japan added 6.7 GW, and China’s addition of 12.1 GW of solar far
outpaced forecasts—setting a one-year record for solar deployment by any country.
On a global basis, 87 GW of clean power was added in 2013, and
cumulative installed capacity now surpasses 735 GW.
China holds a wide lead in the clean energy race
Although overall clean energy investment declined 6 percent in 2013,
China solidified its leadership position in the global clean energy race
by attracting $54.2 billion. Its clean energy sector is reorienting from
an exclusive focus on exports toward greater domestic consumption,
as evidenced by China’s dramatic growth in solar power capacity in
recent years. Solar deployment increased almost fourfold in 2013, to an
unprecedented 12.1 GW, besting its record of 3.2 GW in 2012. In addition,
for the fifth year in a row, China deployed more than 10 GW of wind power.
In total, China installed more than 35 GW of clean generating capacity in
2013, a record. In terms of investment, China led in the wind category with
$28 billion and was second in the solar sector with $22.6 billion. Almost
all of China’s investment was in the asset financing category, with $53.3
billion recorded, more than 40 percent of all G-20 asset financing.
The U.S. clean energy sector is in a holding pattern as the second-largest
world market. The fulfillment of state-level renewable portfolio standards,
the lack of progress on national energy policy, and uncertainty about the
direction of policies on global warming pollution has dampened investor
interest in the sector. Overall, clean energy investment in the United States
declined 9 percent in 2013, to $36.7 billion. The United States remained
the second-leading destination for wind energy investments, attracting
$14 billion. It was third in solar energy investments, with $17.7 billion. As
has been the case for several years, the United States continued to garner
world-leading investment levels in the biofuels and energy efficient/
low-carbon technology subsectors. The United States also remains the
dominant recipient for public market and venture capital/private equity
investments, attracting $6.8 billion and $2.2 billion, respectively, in 2013.
U.S. wind installations in 2013 were down more than 90 percent, from a
record installation of more than 13 GW of wind in 2012 to less than 1 GW
in 2013. When the production tax credit was renewed in early 2013, slight
changes in the law appear to have slowed a sharp drop in investment--deferring deployment of new wind capacity into 2014, when a strong
rebound in capacity additions is forecast. Solar sector generating capacity
continued to grow significantly, as it has in recent years. A record 4.4 GW
of solar was added in the United States in 2013, 30 percent more than
came online in 2012. Lower technology prices overall, and completion of a
number of larger, less-expensive, utility-scale plants, fostered deployment
growth despite lower investment totals.
Japan jumped from fifth to third place among G-20 nations for overall
clean energy investment, reflecting a priority since the Fukushima nuclear disaster for new energy alternatives. In 2013, Japan became the fastest-growing clean energy market in the
world, growing by 80 percent, to $28.6 billion. Most striking was a near doubling of investment in Japan’s solar
sector, which received $28 billion in 2013, almost 30 percent of the G-20 total.
The United Kingdom defied the clean energy contraction that gripped the rest of Europe in 2013. Although clean
energy investment in Germany, Spain, Italy, and France dropped by 40 percent or more, the United Kingdom
experienced 13 percent growth in 2013. The U.K. was one of three G-20 countries to have investment gains last
year, and it ranked fourth among G-20 nations. Most of this growth came in the wind sector, where investments
increased by nearly 50 percent to $5.9 billion, on the strength of offshore projects and greater activity in public
market financing. The world’s largest offshore wind project, the 630-MW London Array, was completed in 2013,
and major financing was secured for the 210-MW Westermost Rough Offshore Wind Farm.
Investment levels in Germany were highly sensitive to clean energy feed-in tariff3
reductions in 2013. Financing
fell 55 percent from 2012 levels, to $10 billion, and the country dropped from third to sixth place among G-20
nations. Wind investments were down by 16 percent, to $5.1 billion, and solar financing declined by more than
$10 billion, to $4.8 billion. The recalibration of German clean energy policies also affected deployment levels.
Wind capacity additions totaled 3.4 GW in 2013. New solar generating capacity additions were down 50 percent,
to less than 4 GW, after record additions of almost 8 GW in 2012. Germany has the most installed solar of any
country in the world, with 35.5 GW.
Strong clean energy investments in 2013 catapulted Canada up five spots to seventh place in the G-20.
Investment grew by 45 percent, to $6.5 billion. The wind sector was especially strong, with financing increasing
by more than 40 percent, to $3.6 billion. In Ontario province, a number of backlogged projects were permitted
and several others were completed, such as the 270-MW South Kent Wind Farm and the 299-MW Blackspring
Ridge project. The solar sector also recorded impressive growth, attracting $2.5 billion.
South Africa’s clean energy sector garnered $4.9 billion in 2013, and it moved up from the 10th–largest to ninth-largest market in the G-20. Although investment levels were down 14 percent last year, South Africa’s market
has grown the second fastest in the G-20 over the past five years. Sixty percent of the country’s clean energy
investment in 2013, $3 billion, went to the solar sector in conjunction with Phase II of its carefully planned reverse
auctions. An additional $1.9 billion was invested in the wind sector.
Worldwide clean energy investment falls a 2nd year
Globally, public and private investment in solar, wind, and other technologies fell 11 percent in 2013, to $254
billion. Last year’s decline follows a 9 percent drop in 2012, and investment declined by one-fifth from the 2011
record of $318 billion.
Although investment in non-G-20 markets grew by 15 percent, with promising sectors emerging in such places
as Chile and Uruguay, it dropped in the larger, established G-20 markets by 16 percent. In 2013, clean energy
investment rose in only three G-20 countries: Japan, Canada, and the United Kingdom.
The results from 2013 indicate several ongoing developments affecting the clean energy marketplace. Investment
has fallen in recent years in response to mutually reinforcing economic and political pressures in developed
markets. Governments in Europe, the United States, and elsewhere have initiated fiscal austerity measures
and curtailed certain clean energy incentives. The political environment surrounding climate change has also
evolved in these countries, as domestic negotiations drag on and it remains uncertain whether the international
community can agree on a comprehensive framework for reducing carbon emissions. Recent technological
advancements in oil and gas recovery also have directed some investment back toward more traditional energy
In response to these developments, the clean energy sector has experienced some consolidation—shuttering
less-competitive companies and forcing the industry overall to become more efficient and capable of competing
in a less-subsidized marketplace. It is a measure of the sector’s resilience that worldwide financing and
investment have totaled more than $250 billion four years running. Moreover, impressive levels of deployment
have been sustained as the prices for wind, solar, and energy-smart technologies have fallen. In view of industry
maturation, Bloomberg New Energy Finance projects a 2014 rebound in worldwide investment and installation of
Investment in European market plummets
Clean energy investment in the region that encompasses Europe, the Middle East, and Africa declined sharply
for the second year in a row, falling 42 percent in 2013 to levels not seen since the mid-2000s. This region had
been the world’s most attractive clean energy market over the past decade, garnering a record $115 billion in 2011.
But investment has since plummeted, tumbling to $55 billion in 2013, less than half that of 2011 levels. Most of
Europe’s major clean energy markets decreased considerably in 2013, with year-over-year investments down
55 percent in Germany, 75 percent in Italy, and 84 percent in Spain. Investment increased only in the United
Kingdom, as a few large offshore wind projects gained significant financing and several were completed. Overall,
declines in the European region accounted for much of the reduction in global clean energy investment.
In contrast, steady, uninterrupted growth in clean energy investment in the Asia and Oceania region continued
apace in 2013, with overall levels increasing 10 percent, to $102 billion. This was the only region to experience rising investment last year. China continued to dominate regional and global markets, attracting $54.2 billion
in 2013, a decrease of 6 percent from 2012. But China’s decline was more than offset by gains in the Japanese
market, which grew by 80 percent, to almost $29 billion.
Investment levels fell in the Americas for the second year in a row, to $52 billion, 8 percent lower than in 2012.
Most notably, the region’s largest markets in North and South America—the United States and Brazil—were
down 9 and 55 percent, respectively. For the first time, clean energy investment in Brazil was less than the
combined total for the rest of Latin America. The Brazilian market slowed, as auctions for wind power flagged and
only 600 MW of new capacity was added. In North America, significant new wind energy investments in Canada
led to a 45 percent increase in 2013.
Solar investment falls sharply but maintains lead
For the fourth consecutive year, solar energy technologies attracted the
largest share of G-20 clean energy investment, accounting for 52 percent
of the total. Nonetheless, investment in solar technologies fell by 23
percent in 2013, to $97.6 billion, registering below $100 billion for the first
time in four years. Solar investments drecreased by more than $10 billion
in both Germany and Italy, accounting for approximately two-thirds of the
Wind sector investments held relatively steady in 2013, slipping 1 percent,
to $73.5 billion, and accounting for 39 percent of the G-20 total. Wind
energy investment did not change appreciably in most major markets,
except for a drop of more than 30 percent in Brazil. China continues to
attract the largest share of wind energy investment by a wide margin,
accounting for 38 percent of the global total.
Energy efficient/low-carbon technologies, which include smart meters
and energy storage devices, constituted the only clean energy sector with rising investment levels, growing 15 percent, to $3.9 billion. More than
two-thirds of the energy efficient/low-carbon technology investments
were in the United States. Advanced energy efficiency products such
as the Nest thermostat and promising energy storage and fuel cell
technologies, such as those developed by Bloom Energy, have helped
boost this sector. Bloom Energy raised $130 million to expand operations
through a private equity investment.
G-20 investment in biofuels declined by 41 percent in 2013, to just under
$3 billion. Other renewable energy technologies (geothermal, biomass,
small hyrdro, and waste-to-energy) fell by 31 percent, to $10.7 billion. (See
Figure 3 for a breakdown of investment by technology.)
Asset finance, small-distributed capacity investments
Investment in clean energy assets for larger plants and small-distributed
capacity, which account for more than 80 percent of total clean energy
investment, both fell. Asset financing dropped 14 percent in 2013, to $123.7 billion. China attracted a world-leading $53.3 billion worth of asset financing, more than 40 percent of the
G-20 total, and the United States $19.8 billion.
Consistent with declines in the solar sector, investment in residential and small commercial solar capacity
dropped 29 percent, to $52.5 billion, the lowest level recorded in the past four years. Japan garnered 44 percent
of small-distributed capacity investments for a total of $23 billion, as its residential solar market expanded
Venture capital/private equity investment levels in the G-20 declined for the fourth consecutive year, falling
32 percent, to $4.0 billion. This kind of early-stage investment in innovative new clean energy companies has
decreased since funding for capital-intensive solar companies has waned and clean-tech companies have not
produced the rapid windfall payouts that many venture capitalists seek. The United States continued to play a
leading role in venture capital/private equity, accounting for 55 percent of 2013 investments, with key financings
for Bloom Energy (fuel cells), Joule Unlimited (biofuels), and Fluidic (energy storage).
Research and development investments made by governments and corporations worldwide rose by 1.2 percent,
to $29.2 billion. In an encouraging development, investors signaled growing confidence as reflected in the stock
prices of the NEX, which rose by 54 percent, outpacing gains in major stock indexes such as the Standard &
Poor’s 500. Consistent with rising stock prices, public market financing for company scale-up across the G-20
increased by 176 percent, to $9.8 billion. Innovative financing models helped spur public market financing. NRG
Energy, a U.S. utility, raised $430 million from investors interested in its portfolio of wind, solar, and other natural
gas generating capacity. Other prominent public market transactions included initial public offerings by Pattern
Energy Group, a wind project developer, and Hannon Armstrong Sustainable Infrastructure Capital in the United
States, Foresight Solar Fund in the United Kingdom, and TransAlta Renewables in Canada.
Among the prominent bond offerings were those proffered by SolarCity and Warren Buffett’s MidAmerican
Energy, which issued an $850 million bond to help finance a major solar photovoltaic project in California. (For a
full description of the financing categories explored in this report, see Figure 14 on Page 22.)
Solar capacity soars, installed wind surpasses 300 GW
In 2012, falling prices for wind and solar technologies allowed installed capacity to increase even though
worldwide clean energy investment dropped. This was not the case in 2013. Prices continued to slide in 2013,
especially for permitting and other “balance of system” costs, but investment was insufficient to prevent slippage
in annual installed capacity. Overall investment was down 11 percent globally, but annual capacity additions in
2013 fell by only 1 percent, to 87 GW.
For the first time in more than a decade, more solar generating capacity was installed than any other clean energy
technology. Solar capacity additions grew by 29 percent annually even though investment in the sector declined
by 23 percent, compared with 2012. This was due in part to ongoing price reductions, but also to an investment shift from small-scale projects to
less-expensive large-scale ones. At
year’s end, a record 40 GW of solar
generating capacity was installed in
2013; less than 40 GW of solar was
installed from 2001 to 2010.
Installations in the wind sector
declined by 21.6 GW (44 percent)
in 2013, compared with the
previous year. In the United States,
wind installations were down
more than 12 GW, as deployment
sank 90 percent in response to
uncertainty in 2012 over renewing
the country’s production tax credit.
Nonetheless, with 27 GW of
capacity added in 2013, cumulative
wind installations surpassed 307
GW, accounting for more than 40
percent of the world’s clean energy
On a regional basis, installations
in 2013 dropped 48 percent in the
Americas and 22 percent in the Europe, Middle East, and Africa
region. Installations in this region
were down for the first time in
more than 10 years. By contrast,
clean energy capacity in the Asia
and Oceania region increased by
64 percent, with more than 50.1
GW of capacity installed. Almost
half of Asia’s gains in capacity were
logged in the Chinese and Japanese solar sectors, which added a total of 18.8 GW. Japan installed 6.7 GW, and China’s addition of 12.1 GW of solar
far outpaced forecasts and was a one-year record for solar deployment by any country.