Investor confidence in renewables and energy storage has hit an all-time high in the US, with more than two-thirds of investors planning to increase their clean energy investments this year, says a report.
The analysis by the American Council on Renewable Energy (ACORE) presents the results of a new survey of prominent financial institutions and renewable energy development companies on their confidence in the sector in the aftermath of the Covid-19 pandemic.
The report, titled Expectations for Renewable Energy Finance in 2021-2024, also tracks progress on the $1tn 2030: American Renewable Investment Goal, an initiative ACORE launched in 2018 to help secure $1tn in private sector investment in renewable energy and enabling grid technologies by 2030.
One trillion dollars of investment over 2018-2030 would represent more than two times the historic investment in the US renewables sector before the campaign and help put the nation on a trajectory towards meeting President Joe Biden’s goal of a carbon-free grid by 2035.
“The soaring confidence in the renewable energy and energy storage sectors is encouraging,” said ACORE president and CEO Gregory Wetstone. “If we are going to meet our $1tn 2030 objective and achieve the president’s goal of decarbonising the power sector by 2035, the status quo is no longer going to cut it.
“Renewable sector investors and developers seem to understand that this is the moment to accelerate investment in renewable energy and grid-enabling technologies to avoid the worst impacts of climate change.”
US investors have an “extremely confident” outlook on the growth of renewables and energy storage
ACORE said one-sixth of its total $1tn campaign goal ($167bn) has so far been met, despite a 12% decline in renewable energy investment in 2020.
To achieve the 2030 objective, an average of $92.6bn a year will need to be invested through to 2029 – an annual increase of 59% over the 2020 investment level.
To gain a better understanding of the expected environment for renewable sector finance over the next three years, ACORE surveyed leading financial institutions and renewable energy development companies.
It found that more than two-thirds of surveyed investors (68%) are planning to increase their renewable energy investments by more than 10% this year compared to 2020.
The survey revealed that investors and developers have an “extremely confident” outlook on the growth of renewable energy and energy storage over the next three years, with nearly all surveyed companies planning to increase their investment or development activity.
Investors and developers said tax equity remains the financing source hardest hit by the pandemic, while energy storage and utility-scale solar rank as the most popular preferences for investment amongst investors over the next three years.
Meanwhile, nearly all of the investors (90%) and developers (93%) reported maintained or increased risk appetites in 2021 compared to 2020.
Investors also considered the US to be an “attractive venue” for investment compared to leading countries like China over the next three years.
The survey showed that the PJM, CAISO and NYISO electricity markets rank as the most attractive US markets for renewable energy investment and development over the next three years.
It also revealed that most investors expect the attractiveness of renewable energy as an asset class to increase compared to other asset classes between 2021 and 2024.
