Clean Energy Trends 2013

This year's report is the 12th annual edition in Clean Edge's Clean Energy Trends report series. From tracking, forecasting, and market sizing the global solar, wind, and biofuels markets, to detailed analysis of solar PV pricing, the public markets, and venture capital investments, this report series has become the signature report in the clean-energy economy. This year's report also outlines five key trends that will impact clean-energy markets in the coming years:

1. Smart Devices and Big Data Empower Customers, Open New Chapter in Energy Efficiency
2. Distributed Solar Financing Comes of Age
3. Under the EV Radar, Microhybrid Technology Saves Big on Fuel Consumption
4. In the U.S. and Overseas, Geothermal Picks up Steam
5. Perfectly Natural: Biomimicry Makes its Mark on Clean Tech

2012 proved to be an unsettling and difficult year for clean energy. High-profile bankruptcies and layoffs plagued many clean-tech companies, overall venture investments retreated in the face of increasingly elusive returns, and the industry was begrudgingly transformed into a partisan wedge issue during the highly contentious U.S. presidential campaign.
 
The beginning of 2013 has continued many of these same themes. In the U.S., conservative organizations and politicians continue to attack pro-clean energy policies at both the state and federal level. Numerous groups, most prominently the American Legislative Exchange Council (ALEC), are feeding off election-season rhetoric by ratcheting up efforts to roll back supportive policies such as state-backed renewable portfolio standards (RPS). In Europe, ongoing economic struggles continue to slow demand for a host of clean technologies. Even in China, where economic growth and clean-tech commitments seem to carry on unimpeded, the country’s overleveraged solar manufacturers are being forced to crawl back to the government for even larger (and we’d say unsustainable) safety nets.
 
The fundamental global market drivers for clean technology, however, remain largely intact. Intensifying resource constraints (everything from freshwater to energy feedstocks) cannot be ignored, especially with a global population now exceeding 7 billion. In the aftermath of unprecedented climate disruption in the U.S. and abroad, resiliency and adaptation are becoming critical business and policy drivers as organizations scramble to meet a literally changing landscape. In the U.S., President Obama has signaled a strong commitment to expanding clean energy and energy efficiency in his second term, calling for a doubling of renewable power by 2020. And increasingly lower prices for clean-tech goods and services are helping wind and solar power reach cost parity in both utility-scale and distributed markets, making the value proposition increasingly attractive. Even amidst the carnage of 2012, clean energy has continued its ascent as a major economic force, with an increasing focus on deploying technologies that are ready and available now

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According to our research:

• Biofuels (global production and wholesale pricing of ethanol and biodiesel) reached $95.2 billion in 2012, up from $83.0 billion the previous year, and are projected to grow to $177.7 billion by 2022. From 2011 to 2012, global biofuels production expanded from 27.9 billion gallons to 31.4 billion gallons of ethanol and biodiesel. Market size growth over the next decade is expected to be driven by added production, but also by modest price increases.
   
• Wind power (new installation capital costs) is projected to grow from $73.8 billion in 2012, up from $71.5 billion the previous year, to $124.7 billion in 2022. Global wind capacity expanded by 44.7 gigawatts in 2012, a record year led by more than 13 GW added in both China and the U.S., and an additional 12.4 GW of new capacity in Europe.
   
• Solar photovoltaics (including modules, system components, and installation) decreased from a record $91.6 billion in 2011 to $79.7 billion in 2012 as continued growth in annual capacity additions was not enough to offset falling PV prices. While total market revenues fell 19 percent – the first PV market contraction in Clean Energy Trends’ 12-year history – global installations expanded to a record of 30.9 GW in 2012, up from 29.6 GW the prior year. Germany remained the top market, adding 7.6 GW in 2012, followed by strong growth in China, Italy, and the U.S., which each added more than 3 GW. By 2022, solar PV revenues are expected to grow to $123.6 billion.

Together, we project these three sectors will continue to grow over the next decade, nearly doubling from $248.7 billion in 2012 to $426.1 billion in 2022.

U.S. Clean-Tech Venture Investments

In 2012, U.S.-based venture capital investments in clean technologies totaled $5.0 billion, contracting for the first time in three years with a 26 percent drop from $6.6 billion in 2011, according to data provided by Cleantech Group.

Clean tech’s decline, however, matched a similar downward trend for total VC investment in the U.S., with clean-tech investments still representing nearly one-fifth of all VC activity in the U.S. during 2012.