Posted by: Mark Scott on October 02, 2009
I don’t want to rain on anyone’s parade, but new figures show the economy’s much-heralded recovery — and its impact on clean energy projects — is still a little ways off. According to New Energy Finance, total new global financial investment in green energy projects reached $25.9 billion in the third quarter of 2009. That’s a 95% increase over the first quarter of the year — when investors fled the sector. But the figure still represents a 22% decline compared to the $33.3 billion raised during the same period last year.
More importantly, third-quarter investment fell 10% compared to capital raised between April and June, 2009 (see graph below). Europe pulled in the lion’s share of cash ($8.8 billion of asset finance), vs. just $1.2 billion for the U.S.
“The structure of the U.S. stimulus program effectively brought project finance to a halt as developers waited to ensure they qualified for grants or debt guarantees,” Michael Liebreich, New Energy Finance’s chief executive, said in a statement. “Now that there is an infrastructure in place to disburse funds, we expect investment activity in the U.S. to accelerate sharply in Q4 and into 2010.”
For sure, cash is expected to start flowing. New Energy Finance reckons over $37 billion will be invested in the fourth quarter of the year alone. That would be the largest quarterly influx of cash into the sector since the end of 2007. It would also take total annual clean energy investment to at least $105 billion this year.
Yet surpassing the $100 billion figure isn’t a sign green energy has recovered to the pre-credit crunch norms. Last year, for instance, total industry investment topped $155 billion. It’ll still be some time before the sector reaches those levels again.
BusinessWeek correspondents John Carey and Mark Scott, cover the green scene, keeping on top of the business aspects of energy, the environment and climate change, as well as the technologies, policies, markets and people that are shaping how the earth's resources will be used in the century ahead.