Global investments in small-scale solar rise 16% in Q1, one of few sectors to buck downward trend, finds BNEF

Amid a slight global contraction in renewable energy investments in the first quarter (Q1) of 2018 were a few “pockets of strength”, reports BNEF in its first quarterly clean energy investment report of the year.

One of these pockets was the sub-1 MW small-scale solar sector, where global investments of $14.3 billion for Q1 represented a year-on-year (YOY) increase of 16%, bucking a wider downward trend for solar investment – globally, the sector attracted $37.4 billion in investment, which is 19% down YOY against Q1 2017.

Tumbling solar power costs remain one of the main reasons why less money is being spent on solar PV YOY, with BNEF analysis finding that the benchmark global dollar capital costs per MW for large-scale solar is 7% lower than it was a year ago.

So despite reduced investment volumes, BNEF head of solar analyst, Jenny Chase is confident that global solar installations in 2018 will surpass last year’s record of 98 GW of new capacity. “Two of the main drivers are the ongoing boom in China for both utility-scale and smaller, local PV systems, and the financing of very large solar parks in other developing countries as cost-competitiveness continues to improve,” Chase said.

China accounted for 40% of all global renewable investment in Q1, the data showed, while the largest solar projects were to be found in Morocco (where the 800 MW Noor Midelt CSP+PV+storage project has attracted more than $2 billion in funding) and Tangedco’s 709 MW solar PV portfolio in India (drawing more than $660 million investment) lead the way for developing countries.

Further regional analysis finds that Mexico’s growing appetite for new wind and solar power pushed its total Q1 investment up 3% to $1.3 billion, while in the U.S. clean energy investment rose 16% to $10.7 billion.

It was a different story in previously pioneering solar and wind markets in Europe and Japan, however: Europe saw a 17% decline in investment to $6 billion, while Japan’s $1.4 billion investment in Q1 was a massive 54% decrease YOY.

“The global first quarter figures are the lowest for any quarter since 3Q 2016, but it’s too early to predict a fall in annual investment this year,” said BNEF clean energy investment analyst, Abraham Louw. “For instance, we expect to see the financing of a number of big-ticket offshore wind projects in U.K., Belgian, Dutch and Danish waters during the months ahead.”