Though it declined 11 percent from the previous year, global clean energy investment reached $254 billion in 2013, according to a new report released Thursday by the Pew Charitable Trusts. And for the second straight year, China has outpaced the United States in annual clean energy investment, attracting $54.2 billion compared to the United States’ $36.7 billion. As other emerging economies seek to realize the economic and environmental benefits of the growing clean energy industry, the analysis makes clear the U.S. will have to do more to remain a leader in clean energy.
The literal bright spot in the developing U.S. clean energy sector is the booming solar industry, which installed a record 4.7 gigawatts of solar energy in 2013 — a 30 percent increase from 2012. Ninety percent of states added solar jobs in 2013 and rooftop solar has become so popular in the U.S. that a new system is now installed every four minutes.
Total U.S. clean energy investment declined by nine percent from 2012 to $36.7 billion, however, and construction of U.S. wind installations, undercut by Congress’ failure to extend the production tax credit (PTC), declined over 90 percent from 2012 to 2013.
In order to reverse the current trend and attract new investments to the clean energy sector, a report released Thursday by the Center for American Progress details four strategies the Obama administration can employ.
For four out of the past five years, the U.S. ranked second behind China in total investment in clean energy. In order to counter this balance, the report suggests the Obama administration can maximize foreign direct investment in clean energy through “a clean energy investment track within the SelectUSA initiative” under the Department of Commerce in order to attract increased investment from both domestic and foreign firms. This track could help foreign businesses navigate a maze of local, state, and federal government incentives and regulations all unique to different sectors within the industries and invest in domestic clean energy markets.
With the Environmental Protection Agency (EPA) expected to issue new standards for limiting the carbon pollution for coal-fired power plants this June, allowing states to comply with these standards through clean energy targets and other market-based systems would create a more flexible market environment and have the added benefit of supporting state-level clean energy investment.
American investors are already exploring new ways to finance clean energy — through solar securitization, crowd-funding, yield cos, and real estate investment trusts (REITs). In order to take this investment to the next level, the administration can expand the availability of existing financial instruments to clean energy through the creation of a high level task force designed to promote awareness of financing mechanisms and improve support offered by federal regulators.
And as the clean energy sector continues to grow, the industry will need a new, skilled workforce to meet its needs. In order to bridge this potential skill gap, the CAP report calls on the Obama administration to expand worker-training programs in clean energy and create an annual survey that would track the labor needs of the clean energy sector.
Although Pew found that “uncertainty about the direction of key policies on clean energy and carbon pollution have dampened investor enthusiasm” in the U.S. clean energy sector, the report maintained that domestic clean energy markets still demonstrate significant potential for long-term success if appropriate policies are implemented.
Ben Bovarnick is a Special Assistant with the Energy team and Craig Kaplan is an Energy Intern at the Center for American Progress.