Sobering Report: Global Investment In Clean Energy Is Down

It’s expected to reach no more than $115 billion this year, according to New Energy Finance, which released third quarter figures earlier this month — that’s down from $155 billion last year and $148 billion in 2007 (although 2009 should still be better than 2006).

Furthermore, although the group’s analysts expect clean energy investments to triple by 2020 to more than $300 billion a year, that’s only 60 percent of what they figure is needed to prevent global temperatures from rising by more than 2 degrees Centigrade. Several scientists fear coastal flooding and other catastrophic climate change may happen if the world gets hotter than that.

Private equity and venture capital investments were $2.2 billion, up from second quarter but around half of what was invested last year. However, there were some bright spots — $198 million in equity raised by Solyndra, which makes photovoltaic solar panels, and $82.5 million raised by Tesla Motors for electric cars. Also, battery maker A123 went public.

Asset finance, required to start wind farms and solar parks, was down from second quarter (although way up from first quarter). But the U.S. lagged far behind the European Union here. Of the $19.2 billion in asset financing in third quarter, only $1.2 billion came from the U.S. That’s because U.S. investors are still waiting for federal stimulus grants, launched in July, to get going.

“The structure of the U.S. stimulus programme effectively brought project finance to a halt in the U.S. as developers waited to ensure they qualified for grants or debt guarantees,” wrote New Energy CEO Michael Liebreich. “Now that there is an infrastructure in place to disburse funds, we expect investment activity in the U.S. to accelerate as we head into 2010.”

Corporate mergers and acquisitions are also up and there may be some bargains, since valuations are down, but financing for those is still hard to get.

Overall, there’s too much reliance on “stimulus funds, development banks and state-backed capital providers of various sorts,” Liebreich wrote.

Not a pretty picture. For more details, go here.

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