03 Investment Flows

Global new investment in renewable power and fuels (not including hydropower projects >50 MW) was USD 214.4 billion in 2013, as estimated by Bloomberg New Energy Finance (BNEF).i This was down 14% relative to 2012, and 23% lower than the record level in 2011. (See Figure 23.) Including the unreported investments in hydropower projects larger than 50 MW, total new investment in renewable power and fuels was at least USD 249.4 billion in 2013.ii Note that these estimates do not include investment in renewable heating and cooling technologies.

The second consecutive year of decline in investment—after several years of growth—was due in part to uncertainty over incentive policies in Europe and the United States, and to retroactive reductions in support in some countries. Europe's investment was down 44% from 2012, and, for the first time ever, China alone invested more in renewable energy than all of Europe combined. The year 2013 also saw an interruption to the eight consecutive years of rising renewable energy investment in developing countries.

Yet the global decline also resulted from sharp reductions in technology costs. This was particularly true for solar PV, which saw record new installations in 2013, despite a 22% decline in dollars invested. Lower costs and efficiency improvements made it possible to build onshore wind and solar PV installations in several locations around the world in 2013 without subsidy support, particularly in Latin America. Considering only net investment in new power capacity, renewables outpaced fossil fuels for the fourth year running.

Further, despite the overall downward trend in world investment, there were significant exceptions at the country level. The most notable was Japan, where renewable energy investment (excluding R&D) increased by 80% relative to 2012. Other countries that increased their investment in 2013 included Canada, Chile, Israel, New Zealand, the United Kingdom, and Uruguay.