A new report said global solar power investment broke records last year, even surpassing wind power, according to analysts at GlobalData.
Global renewable power investments reached $209bn in 2011, as the industry witnessed changing geographical opportunities. Renewables received substantial support in the U.S. while the crisis in the eurozone affected investment as governments pulled back on subsidies. Government policies worldwide are still seen as a major source of support for the sector.
In 2011, solar power investments reached a 49% share of global renewable power investments, compared to the 34% claimed by wind power. A drastic decrease in solar PV module prices, due to oversupply, resulted in an increase in capacity installations. Venture financing and private equity investments were also high for solar technology developments. With solar power prices approaching grid-parity, asset financing investments in this area have witnessed a higher growth rate than other renewable generation technologies.
Renewable power investments from Europe are anticipated to drop in 2012, as the region’s credit crisis continues to damage economic stability. However, North America will continue to demonstrate high investments in both solar and wind power, particularly towards the development of new wind power projects. The industry is expecting a sharp drop-off if the production tax credit.
Much of this growth in the U.S. was due to the Department of Treasury’s 1603 program, which expired on Dec. 31. The U.S. market topped 1,855 MW last year, representing an investment of $8.4bn.
Asian markets are a key growth area, as lower cost equipment manufacturers seek market share in the Asia-Pacific region. Middle Eastern and North African countries such as Abu Dhabi, Dubai, Saudi Arabia, Morocco, Algeria and Jordon, are seen as solar power investment destinations for major market players.
China will be the focus of future solar investment as the state government has planned financing of around $100m to develop projects throughout 40 African nations, where large prospective demand markets are enabling China to expand its production targets. As a result, China’s solar module manufacturers are planning to increase their production capacity drastically, adding 3.6 GW of module production capacity in the country by 2012.