Since 2006, solar went on to become the biggest clean energy sector in the world in terms of global new investment in 2011. Following the Chinese government’s announcement to restructure its solar subsidy scheme in early June, BNEF expects this to reflect on the global investor sentiments for the sector during the second half of 2018. (Source: BNEF)
- According to BNEF, global clean energy investment between January 2018 to June 2018 was $132.8 billion
- Of this, solar accounted for $71.6 billion, dropping 19% over previous year, while wind fared better, attracting 33% more YoY
- Chinese government’s recent policy changes for PV development and lower capital costs for PV projects will reflect clear impact during second half of 2018
- Module prices are expected to drop 34% by the end of 2018 thanks to overcapacity and resultant steep price drop
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Lower capital costs for PV projects and the Chinese government’s decision to pull back support for new projects led to a significant drop of 19% in solar investments during H1/2018 compared to the same period in 2017. This impact will be felt fully only during the second half of the year, according to Bloomberg New Energy Finance (BNEF). The world may see solar installations fall for the first time on record in 2018, owing to these factors, said the consultancy.
During the first six months of 2018, total global investment in clean energy amounted to $138.2 billion, dropping 1% from a year back. However, the second quarter was better than the first. Investment in solar was $71.6 billion in H1, but wind fared better, increasing investments by 33% to $57.2 billion. China, the world’s biggest solar market, reduced its spending on solar by 29% in the reporting period to $35.1 billion.
BNEF believes these very trends in the solar industry are going to set the pace for the second half, which means production overcapacity will bring down module prices steeply. “Before the Chinese announcement our team was already expecting a 27% fall in PV module prices this year. Now we have revised that to a 34% drop, to an end-2018 global average of 24.4 US cents per W,” said BNEF Senior Solar Analyst Pietro Radoia.
More information on the report Clean Energy Investment Trends, 2Q/2018 is available on the BNEF website.