By - Jim Vess

Global investment in solar falls while wind financing soars in first half of 2018

Energize Weekly, July 25, 2018

Global solar investment faltered in the first half of 2018, as the Chinse government cut back on subsidies, but financing for wind projects soared, according to Bloomberg New Energy Finance (BNEF).

Overall, clean energy investment for the first six months of 2018 was $138.2 billion, a drop of 1 percent from the same period in 2017.

Solar investment was down 19 percent to $71.6 billion compared to the first half of 2017. In part, that was due to the continued decline in the cost of photovoltaic (PV) projects enabling per-megawatt installed cost to drop.

A shift in Chinese policy, however, also cooled off the market. “On June 1, the Chinese government released a policy document restricting new solar installations that require a national subsidy, with immediate effect,” Justin Wu, head of Asia-Pacific at BNEF, said in a statement. “We expect this to lead to a sharp drop in installations in China this year, compared to 2017’s spectacular record of 53 GW (gigawatts).”

In the first half of 2018, China investments in solar were down 29 percent to $35.1 billion compared with the first half of 2017.

Both declining PV prices and the Chinese policy change are expected to “gather pace” in the second half of 2018, BNEF said.

Meanwhile, global investment in wind when compared to the first six months of 2017 rose 33 percent to $57.2 billion in the first half 2018.

The surge in wind investments in the U.S. was even more pronounced with financing up 121 percent to $17.5 billion. Comparing the first halves of 2017 and 2018, Chinese wind investment increased 4 percent to $17.6 billion.

The big increase in wind investment came from a string of large projects around the world, including in the U.S., Taiwan, India and the Netherlands.

Among the biggest deals were $1.5 billion for the 731.5-megawatt (MW) Borssele 3 and 4 offshore wind farm in Dutch waters, $1 billion for the 478-MW Hale County onshore wind project in Texas and $627 million for the 120-MW Formosa 1 Miaoli project in the sea off Taiwan.

Other clean technology investments also saw an increase year-on-year of 64 percent to $5.2 billion. There was an $852.5 million initial public offering by Chinese lithium-ion battery maker Contemporary Amperex Technology and a $795 billion Series B venture capital round by Youxia Motors, a Chinese electric vehicle manufacturer.

Among the five largest countries and regions for clean energy investment, performance varied in the first half of 2018 when compared to the same period in 2017.

Chinese investment was down 15 percent to $58.1 billion. The U.S. posted a 31 percent increase to $28.8 billion, and Europe saw an 8 percent increase to $16 billion.

India had a 22 percent increase in clean energy investment to $7.4 billion, while Australian investment slipped 1 percent to $4.1 billion.

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