According to new research conducted by The Pew Charitable Trusts clean energy investment dropped by a shocking 70% in the UK last year placing us in unlucky position number 13. This means the UK has dropped eight places under the coalition Government, as Labour brought us up to fifth. The UK’s dramatic drop in private investment was in stark contrast to global trends.
Worldwide, the clean energy sector’s investments grew by 30% to a record US$243 billion in 2010. At the top of the leader board was China, which attracted a record US$54.4 billion in equity in 2010, which is an increase of 39%. Not surprisingly, Germany came in at number two, up from third place, doubling its financing to US$41.2 billion.
India moved into the top 10 for the first time, with US$4 billion in investment, which is an increase of 25%. The U.S saw a 51% increase in investments to US$34 billion, however it still slipped into third place.
“With a new Government in the United Kingdom, investors appear to have taken to the sidelines until there is more certainty in the marketplace,” said Phyllis Cuttino, Director of Pew’s Clean Energy Program. “Our research consistently demonstrates that strong policy attracts investments. Nations like China, Germany and India, which all saw an increase, were attractive to financers because they have national policies that create long-term certainty for investors.”
“Looking at global trends, the solar sector experienced the strongest growth among the various technologies, led by small-scale residential projects,” said Michael Liebreich, CEO of Bloomberg New Energy Finance. “Declining prices and generous government support in key countries helped the solar sector achieve 40% of total clean energy investment in 2010. In the UK, activity stalled somewhat in 2010 due in no small part to policy uncertainty during a substantial part of the year.”
If Cuttino’s reasoning is correct, the UK’s position on the clean investment table is not likely to improve, as the Government’s recent fast-track review and repeated alterations of the solar feed-in tariff only increase the amount of uncertainty in the country. Until the UK’s clean energy policies are stabilised, we can expect investors to stick to the sidelines.
The full report can be viewed here.
