CLAIM: Investment in renewable energy is in a downward spiral and major banks and institutional investors are cutting back their clean tech portfolios. Private investors do not believe in renewable energy.
The past two years have been the highest in history for clean tech investment in the private sector. Individual investors are pouring money into booming industries like solar and wind, while major Wall Street banks maintain dedicated, multi-billion dollar clean tech portfolios.
- Private investment in renewable energy in 2012 topped $269 billion dollars – the second highest year ever for clean tech investment. (Source: Bloomberg New Energy Finance, http://bit.ly/10u5Ht8)
- The private investment numbers for 2012 are second only to 2011, when investment hit a high of $302 billion. While the 2012 numbers did decline by 11%, the 2012 total still beat expectations: “Indeed, the most striking aspect of these figures is that the decline was not bigger, given the fierce headwinds the clean-energy sector faced in 2012 as a result of policy uncertainty, the ongoing European fiscal crisis and continuing sharp falls in technology costs,” commented Michael Liebreich, CEO of Bloomberg Clean Energy Finance. (Source: The Hill, http://bit.ly/W0PXqW)
- The 2012 decline was expected early on. Michael Liebreich, CEO of Bloomberg Clean Energy Finance noted, “we warned at the start of last year that investment in 2012 was likely to fall below 2011 levels, but rumors of the death of clean energy investment have been greatly exaggerated.” (Source: The Hill, http://bit.ly/W0PXqW)
- Investors see a lot of upside in the clean tech industry. Dr. Wal Van Lierop, CEO of Chrysalix Energy Venture Capital which was the most active clean tech venture capital firm in 2010 and 2011, proclaimed in September 2012, “This [cleantech] is not a money losing proposition – GE, Siemens and others are making a lot of money with clean tech. Clean tech will be the way of doing business in the future.” (AOL Energy, http://aol.it/PnXnT5)
- Google led the charge in 2012 with a $200 million investment in a Texas wind farm that put the company over $1 billion in total clean tech investments – as well as over 2GW in total renewable energy installations. According to Google, these investments will “build a better future while also generating attractive financial returns.” (Source: Google Green, http://bit.ly/KlyvfG)
- Goldman Sachs began 2013 by accelerating its funding of renewable energy projects, as “it expects [renewables] will gain favor in a global shift it says is inevitable.” Goldman overtook Morgan Stanley as the biggest lead manager for share offerings with three deals valued at $405.6 million, according to an annual ranking by Bloomberg New Energy Finance. (Source: Bloomberg Businessweek, http://buswk.co/VMK0QY)
- Warren Buffett’s energy investment company, MidAmerican Energy Holdings, is continuing to invest in renewables. In January 2013, MidAmerican announced a deal worth up to $2.5 billion for two solar power projects under construction in Southern California from SunPower Corp. (Source: The Wall Street Journal, http://on.wsj.com/12ZXSJZ)
- MidAmerican Energy Holdings Company also holds has a $6 billion wind energy portfolio, as of January 2013. (Source: Bloomberg, http://bloom.bg/yIaBfs)
- In its 2012 debut on Nasdaq, the solar installation company SolarCity closed 47% above its $8-a-share initial public offering price. SolarCity raised $92 million from its IPO and, as of January 2013, holds a market cap of just over $1 billion. (Source: USA Today, http://usat.ly/Uca18D)
- In early 2013, a company called Solar Mosaic demonstrated the public’s interest in clean tech investment by offering “crowd-sourced” solar projects. After raising $3.4 million in VC funding, Solar Mosaic’s program allows individual investors to earn a 4.5 percent return on rooftop power plants, better than 10-year Treasury bills that yield about 1.9 percent, as of early 2013. (Source: Bloomberg News, http://bloom.bg/VOJv5e)
- As of late January 2013, over 700 individual investors have poured approximately $1.1 million into the Mosaic platform to finance twelve rooftop solar power plants in California, Arizona and New Jersey. The first four projects sold out in less than 24 hours with over 400 investors putting in between $25 and $30,000 each. (Source: Mosaic Inc., http://bit.ly/U3Fk6N)
- Major Wall Street banks have invested significantly in renewable energy portfolios. From 2007 on, Goldman Sachs, Citigroup, Wells Fargo and Bank of America have allocated a combined $190 billion for clean tech investments through 2022. Citigroup in particular has already allocated $36.4 billion, five years into their 10-year, $50 billion commitment. (Source: New York Times, http://nyti.ms/OdLXjp)
- Morgan Stanley’s clean tech program is one of Wall Street’s most comprehensive. In 2011, they helped clean technology companies raise nearly $35 billion in capital, and their investment banking team intermediated more than $4 billion in securities in the renewables sector. They have also provided a $320 million loan for a wind farm in Montana, a $227 million IPO for biofuels company Solazyme and a $852 million IPO for a Chinese wind company. (Source: Morgan Stanley, http://bit.ly/PXHWoB)
- The private sector is expected to pour $800 billion to $1.2 trillion in global investments into the solar industry over the next decade. (Source: McKinsey & Company, http://bit.ly/InVamF)