Global landscape for clean energy (anniegreenjeans.com).

Across the competitive landscape, new global clean energy industry investments for solar, wind, geothermal, hydro, and biomass power as well as energy-efficiency fell by 53% in the first quarter of 2009 to $13.3 billion compared to the same period in 2008, reflecting the deep impact of the world financial crisis, according to a June 2009 report by the United Nations Environment Program (UNEP), which predicts "green-shoots” of recovery during the second quarter of 2009. However, the sector is far from peak investment levels of late 2007 and early 2008. 

Nonetheless, global warming concerns, economic recovery stimulus packages and energy security are expected to initiate far greater investments in clean energy in the future. In specific, the growing understanding that global carbon emissions must begin declining around 2015 to prevent dangerous climate change, noted in numerous studies including the 4th assessment of the Intergovernmental Panel on Climate Change associated with the UNEP/World Meteorological Organization, is elevating clean energy investment to a high national priority in countries across the world. Annual global investments in renewable energy, energy efficiency, and carbon capture and storage are anticipated to reach a half-trillion dollars by 2020, representing an average investment of 0.44% of global gross domestic product (GDP). Currently, there is a massive oversupply for solar products on the market, which is dampening prices, partly due to the lack of sufficient, timely demand-side incentives globally such as carbon emissions constraints, tax incentives, and feed-in tariffs.

Europe continues to dominate new clean energy investment with $49.7 billion in 2008, an increase of 2% from 2007 with a 37% compound annual growth rate (CAGR) from 2006-2008, according to the UNEP report. This investment has been spurred by government policies supporting new sustainability or renewable energy projects, particularly in countries such as Spain, which experienced $17.4 billion of asset finance investment in 2008, when several temporary government solar incentives were set to expire.  

This report also revealed that by 2008, China was the world's second largest wind market in terms of newly installed capacity and the fourth largest in overall installed capacity. In 2008, approximately 6GW of new capacity was installed and deployed, bringing total capacity to approximately 12GW. In addition, China became the world's largest solar cell manufacturer in 2008, with 95% of its products being shipped overseas and predominantly to European countries such as Germany. A lesser emphasis was placed on biomass, as 800MW of power was added in 2008, bringing the total installed capacity for agriculture waste-fired power plants up to 2.88GW. President Barack Obama is engaging China in new collaborations regarding carbon emissions and clean energy- with hopes that both countries will focus on developing Green economies for domestic purposes.

Earlier this month, the South Korean government said it would invest 2% of its annual GDP in environment-related industries over the next five years. This plan is coupled with a strategy of raising $1.6 billion in financing for an assortment of Green industries in the private sector, including solar, solid state lighting, and new battery technologies. 

Samsung Electronics, the world's largest memory chip maker and an overall electronics giant headquartered in South Korea, is also championing cleantech investments and stated in recent weeks that it would invest $4.3 billion in Green research and development (R&D) and facilities in order to become a leading eco-friendly company by 2013. Overall, $2.5 billion will be spent to develop products which cause less strain on the environment, and the remainder will be dedicated to energy-efficient technologies and the environmental improvement of manufacturing facilities. As a result, Samsung is planning to reduce greenhouse gas emissions from manufacturing facilities by 50%, cutting total indirect greenhouse gas emissions from all products by 84 million tons through 2013. Moreover, the company will be creating more energy efficient products through means such as cutting standby power consumption and overall power usage requirements. This action will enhance their position in the marketplace as a leading exporter of goods to the U.S., which is considering a cap-and-trade bill, the American Clean Energy and Security Act (ACES) that would add import tariffs on products entering the U.S. from countries with pollution targets above those set in this legislation. 

In comparison, the UNEP report indicated that new investment in clean energy in North America was $30.1 billion in 2008, a decrease of 8% compared to 2007 with a 15% CAGR from 2006-2008. The U.S. showed declines in asset financing following the abundance of investment in corn-based ethanol vehicle fuel in 2007 due to Bush administration incentives. Also, the number of tax equity providers fell for wind and solar projects due to the global financial crisis.  

The U.S. government is proposing only about $1.2 billion annually in energy R&D and roughly $10 billion in the clean energy sector overall under the ACES bill, which is equivalent to less than 0.1% of GDP and a paltry figure with respect to leading Asian countries and Europe. A group of 34 Nobel laureates reportedly wrote a letter to President Obama citing the lack of sufficient cleantech investment and calling on him to uphold his original plan to invest $15 billion annually in clean energy R&D. 

At the state level, places such as Arizona with the natural advantage of one of the highest solar exposure indices across the U.S., have the potential to gain on the development of a clean economy and infrastructure. The expansion of clean energy policy at the national and state level bodes well for Green collar job creation and Phoenix, AZ-based companies such as First Solar, who may even be inclined to build solar panel production facilities in the state with the proper incentives in place.  Phoenix is the host for the Greenbuild International Conference and Expo November 11-13, 2009, which will be the subject of an upcoming article, as this event may help spur the state's development of a cleantech economy.

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