July 10, 2015 | By Barbara Vergetis Lundin

Global clean energy investment in 2015 is facing headwinds from the financial markets, with the sharp rise in U.S. currency over the last 12 months reducing the dollar value of deals struck in other countries; and volatility in share prices, particularly in China, holding back equity-raising by specialist clean energy companies from both public market investors and venture capital and private equity funds, according to Bloomberg New Energy Finance (BNEF). In fact, clean energy investment worldwide was $53 billion in the second quarter of 2015, BNEF reports, down 28 percent from the same time in 2014. But there are bright spots.

Credit: Herianus

Notably, small-scale solar enjoyed investments of $20.4 billion in the second quarter -- an increase of 29 percent from the same time last year. BNEF predicts that small solar projects of less than 1 megawatt (MW) are on track for a record year, as countries like the United States, Japan, China, and other parts of the developing world respond to the improved cost-effectiveness of rooftop photovoltaics.

"The first two quarters of 2015, taken together, have seen investment down 18 percent compared to the first half of last year. It is possible that the Q1 and Q2 2015 figures will be revised up a bit in due course as some more deals are disclosed, but we have been predicting since January that this year would see lower investment than 2014 because of the strong dollar," said Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance. "In the medium term, we expect investment to resume its strong growth."

In fact, BNEF forecasts that two-thirds of the $12.2 trillion investment in generating capacity globally between now and 2040 will be in renewables, as costs per megawatt-hour for solar and wind fall.

As usual, the largest category of investment in clean energy in the second quarter was asset finance of utility-scale projects such as solar parks, wind farms, biomass and waste-to-energy generators, biofuel production units, geothermal plants, small hydro-electric schemes of less than 50 MW, and marine energy projects -- down 41 percent compared to Q2 2014.

Venture capital and private equity (VC/PE) investment in specialized clean energy companies totaled $564 million, down 31 percent from quarter one and 60 percent below the same time last year -- the weakest quarter since almost a decade ago, according to BNEF.

"The low VC/PE total reflects the fact that technologies such as wind and PV are now far more mature, and less open to challenge from young companies," explained Luke Mills, clean energy economics analyst at Bloomberg New Energy Finance. "However, there is a great deal of early-stage investor interest still in other areas such as power storage and home energy management that could translate into more deals if the wider markets settled down."

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http://www.fierceenergy.com/story/clean-energy-forecast-cloudy-bright-spots/2015-07-10