Q1 2012 Cleantech Investment Nosedives

Global green energy investment stumbled badly in the first quarter of 2012, falling to levels not seen since the financial crisis of 2009. Looks like expiring U.S. incentives, European economic crisis, well-publicized solar bankruptcies and the threat of more high-profile green tech companies going under has taken its toll.

Bloomberg New Energy Finance reported Thursday (PDF) that global clean energy investment fell to a mere $27 billion in the first three months of 2012, down 28 percent from the previous quarter and down 22 percent from the first quarter of 2011. It’s the worst showing since the first quarter of 2009, when the research firm counted $20 billion in venture capital, private equity, public markets and asset finance.

Broken out by sector, the first quarter of 2012 saw $24.2 billion in utility-scale renewable energy project asset finance, down 30 percent from the fourth quarter of 2011 and down 13 percent from the same quarter last year.

Bloomberg New Energy Finance CEO Michael Liebreich pointed to some key factors leading up to the decline. A combination of faltering incentives and ongoing financial uncertainty in Europe, and the expiration of stimulus supports and an uncertain political climate in the United States, has sapped investor confidence, he said.

This year has seen Germany and other key European countries lower their feed-in tariffs for solar power, as well as a string of bankruptcies of German solar companies unable to compete against cheap Chinese solar panel manufacturers. In the United States, a stimulus program that allowed solar power project developers to claim cash grants in lieu of investment tax credits expired, and an attempt to revive it failed last month.

There’s little to show that things will be getting much better over the next 12 months, Liebreich added. Wind power’s production tax credits are set to expire at the end of this year, for example. Renewal is never certain, but the general pall that’s been cast over federal support for green technology — summed up in the conservative anger and accusations around the bankruptcy of U.S. loan guarantee-backed solar startup Solyndra — makes it particularly hard to predict this year.

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