Bloomberg New Energy Finance reported Thursday (PDF) that global clean energy investment fell to a mere $27 billion in the first three months of 2012, down 28 percent from the previous quarter and down 22 percent from the first quarter of 2011. It’s the worst showing since the first quarter of 2009, when the research firm counted $20 billion in venture capital, private equity, public markets and asset finance.
Broken out by sector, the first quarter of 2012 saw $24.2 billion in utility-scale renewable energy project asset finance, down 30 percent from the fourth quarter of 2011 and down 13 percent from the same quarter last year.
Bloomberg New Energy Finance CEO Michael Liebreich pointed to some key factors leading up to the decline. A combination of faltering incentives and ongoing financial uncertainty in Europe, and the expiration of stimulus supports and an uncertain political climate in the United States, has sapped investor confidence, he said.
This year has seen Germany and other key European countries lower their feed-in tariffs for solar power, as well as a string of bankruptcies of German solar companies unable to compete against cheap Chinese solar panel manufacturers. In the United States, a stimulus program that allowed solar power project developers to claim cash grants in lieu of investment tax credits expired, and an attempt to revive it failed last month.
There’s little to show that things will be getting much better over the next 12 months, Liebreich added. Wind power’s production tax credits are set to expire at the end of this year, for example. Renewal is never certain, but the general pall that’s been cast over federal support for green technology -- summed up in the conservative anger and accusations around the bankruptcy of U.S. loan guarantee-backed solar startup Solyndra -- makes it particularly hard to predict this year.
IPO activity took a particularly poor turn, with only $601 million raised on the public markets in the quarter. The two biggest IPOs of the quarter were the $74.8 million debut of Ceres, maker of genetically-modified energy crops, and the $68.8 million public launch of biodiesel maker Renewable Energy Group.
In the meantime, we’ve seen a host of companies delay or cancel their IPO plans amidst ongoing market turmoil and falling prices for publicly listed green technology companies. While solar microinverter maker Enphase raised $54 million in its IPO last week, it also reduced its initial share price by nearly half beforehand. And this morning, massive solar thermal power startup BrightSource suspended its IPO plans after a year of waiting for market conditions to improve.
Venture capital and private equity investment in “specialist clean energy companies” stood at $1.9 billion in the first quarter, down only 2 percent from the previous quarter and up 12 percent from the first quarter of 2011, Bloomberg New Energy Finance reported. Whether this indicates strength in the sector, or companies going back to private investors to manage their way through a poor climate for public market financing, is less clear, however.
For example, one of the first quarter’s biggest raises was the $263 million for beleaguered plug-in hybrid automaker Fisker Automotive, which has been struggling with production delays, recalls and the apparent freezing of its $529 million Department of Energy loan guarantee. In fact, the company has since gone back to investors for another $130 million, which may be aimed at meeting the financial benchmarks needed to restart access to that loan.
Another big first-quarter investment was solar installer and financier SolarCity’s $81 million from Silver Lake Kraftwerk, marking the first big investment for the fund started by billionaire George Soros and bigwigs from the VC and DOE greentech world. SolarCity is rumored to be seeking an IPO, but may feel safer sticking to private investors for the time being.