G lobal new investment in renewable power and fuels (not including hydropower projects larger than 50 MW) was USD 241.6 billion in 2016, as estimated by Bloomberg New Energy Finance (BNEF)i. Although this represents a decrease of 23% compared to the previous year, the decline accompanied a record installation of renewable power capacity worldwide in 2016ii. Investment in renewable power and fuels has exceeded USD 200 billion per year for the past seven years. ( See Reference Table R14.)

For the fifth consecutive year, investment in new renewable power capacity (including all hydropower) was roughly double that in fossil fuel generating capacity.

Investment in renewables continued to focus on solar power, followed closely by wind power, although investment in both sectors was down relative to 2015. Asset finance of utility-scaleiv projects, such as wind farms and solar parks, dominated investment during the year, at USD 187.1 billion. Small-scale solar PV installations (less than 1 MW) accounted for USD 39.8 billion worldwide, representing a decline of 28%.

Renewable energy investment in developed countries, as a group, fell 14% in 2016, to USD 125 billion. While investment in Japan and the United States declined, Europe witnessed a slight increase. Among developing and emerging countries, renewable energy investment fell 30%, to USD 116.6 billion. China played a dominant role in this turnaround, breaking an 11-year rising trend. Chile, Mexico, Morocco, Pakistan, the Philippines, South Africa, Turkey and Uruguay became billion-dollar markets in 2015, but in 2016 each of these countries saw a sharp drop in investment due in part to delayed auctions or to delays in securing equity for projects that won capacity in tenders. Argentina, Bolivia, Egypt, Indonesia, Jordan, Kenya, Mongolia, Peru, Thailand and Vietnam all saw investment rise in 2016.


There were two main reasons for the decline in global investment in renewable energy during 2016. One was the slowdown in investments in Japan, China and some other emerging countries. The other was the significant cost reductions in solar PV and onshore and offshore wind power, which also improved the cost-competitiveness of those technologies. The result was that in 2016 investors were able to acquire more renewable energy capacity for less money.

iThis chapter is derived from UN Environment's Global Trends in Renewable Energy Investment 2017 (Frankfurt: 2017), the sister publication to the GSR, prepared by the Frankfurt School–UNEP Collaborating Centre for Climate & Sustainable Energy Finance (FS-UNEP) in co-operation with BNEF. Data are based on the output of the Desktop database of BNEF, unless otherwise noted, and reflect the timing of investment decisions. The following renewable energy projects are included: all biomass and waste-to-energy, geothermal and wind power projects of more than 1 MW; all hydropower projects of between 1 and 50 MW; all solar power projects, with those less than 1 MW estimated separately and referred to as small-scale projects or small-scale distributed capacity; all ocean energy projects; and all biofuel projects with an annual production capacity of 1 million litres or more. For more information, please refer to the FS-UNEP and BNEF Global Trends report. Where totals do not add up, the difference is due to rounding.i

iiNote that declining costs of some renewable energy technologies (particularly solar PV and wind power) have a decremental impact on total investment (all else being equal). Thus, changes in investment (monetary) do not necessarily reflect changes in capacity additions. ii

iiiInvestment in large-scale hydropower (>50 MW) is not included in the overall total for investment in renewable energy. Similarly, investment in large-scale hydropower is not included in the chapter figures, unless otherwise mentioned. iii

iv“Utility-scale” in this chapter refers to wind farms, solar parks and other renewable power installations of 1 MW or more in size, and to biofuel production facilities with capacity exceeding 1 million litres. iv

Investment by Economy

Developing and emerging economies overtook developed countries in renewable energy investment for the first time in 2015, but developed countries retook the lead in 2016. Trends in renewable energy investment varied by regioni, with investment up in Europe and Australia; down in China, the United States, the Middle East, Africa, Asia-Oceania (except Australia) and Latin America; and stable in India. ( See Figure 42.) Considering all financing of renewable energy (but excluding hydropower larger than 50 MW), China accounted for 32%, followed by Europe (25%), the United States (19%) and Asia-Oceania (excluding China and India; 11%); the Americas (excluding Brazil and the United States), Brazil and the Middle East and Africa accounted for 3% each.

Figure 41. Global New Investment in Renewable Power and Fuels, Developed, Emerging and Developing Countries, 2006-2016


Note: Figure does not include investment in hydropower projects larger than 50 MW. Investment totals have been rounded to nearest billion.

Source: BNEF

The top 10 national investors consisted of three emerging countries (all of which are BRICSii countries) and seven developed countries. In addition to China and the United States, top countries included the United Kingdom, Japan and Germany. The next five countries were India, Brazil, Australia, Belgium and France.

Although China again accounted for the largest dollar commitments to new renewable energy investment, its total of USD 78.3 billion was down 32% from 2015, the lowest level since 2013. Most of this total (USD 72.9 billion) was in asset finance, which declined 34% relative to 2015. However, investment in small-scale solar PV project development increased 32%, to USD 3.5 billion, and government R&D also was up (by 7%), to USD 1.9 billion. Overall, China invested roughly the same amount in both solar and wind power. The country also invested significant sums in large-scale hydropoweriii, although down relative to 2015; China commissioned nearly 9 GW of capacity during the year, a large portion of which was projects larger than 50 MW.2 ( See Hydropower section in Market and Industry Trends chapter.)

Investment in Europe totalled USD 59.8 billion (up 3%) in 2016, due mainly to significant investments in offshore wind power. Asset finance accounted for 78% of the region’s investment, at USD 46.9 billion, of which USD 40.6 billion was invested in wind power (up 10% from 2015) and USD 1.6 billion was invested in solar power (down 75%). Small-scale distributed capacity in Europe attracted USD 6.7 billion in 2016 (down 18%), with Germany, the United Kingdom and the Netherlands being the three biggest contributors.


Within Europe, the United Kingdom was the largest national investor in renewable energy for the second consecutive year, at USD 24 billion. Most of this total was in asset finance (USD 22.5 billion), with four offshore wind projects accounting for USD 14.2 billion. Germany was the second largest European investor at USD 13.2 billion, down 14% from 2015. Of this total, German asset finance was USD 8.4 billion (down 34%), and it was dominated by offshore and onshore wind power.

The United States remained the largest individual investor among developed economies. The country invested USD 46.4 billion in 2016, a decrease of 10% compared to 2015. Despite this reduction, there was strong growth (up 33%) in small-scale distributed capacity investment, with USD 13.1 billion of investment in rooftop and other small-scale solar PV projects. Utility-scale asset finance was down 2%, at USD 29.8 billion, with wind and solar power each accounting for equal shares. Investment in public markets in the United States fell 87%, to USD 1.3 billion, the lowest level in five years.

Japan’s investment fell 56% to USD 14.4 billion. The reduction resulted largely from grid access difficulties and from a shift in policy from a generous FIT to tendering. Investment in small-scale capacity fell 69%, to its lowest level since 2011 (USD 8.5 billion).

Investment in India remained stable compared to 2015, with a total of USD 9.7 billion. Approximately USD 5.5 billion was invested in new solar power capacity, and USD 3.7 billion was invested in wind power during 2016.

Brazil was the third emerging economy among the top 10 investors in 2016, with total investment reaching USD 6.8 billion, a decrease compared to 2015. While asset finance of wind power projects fell 15% to USD 4.9 billion, solar asset finance rose 75% to USD 1 billion.

Elsewhere in the Americas (beyond Brazil and the United States) investment totalled USD 6.1 billion (down 54%), with large variations across countries. Some countries showed significant decreases: for example, investments in Chile (USD 800 million), Mexico (USD 600 million) and Uruguay (USD 400 million) all were down more than 70% relative to 2015. In Honduras, investment decreased 32% to USD 300 million. Other countries saw significant increases, however, including Argentina (up 356% to USD 400 million) and Peru (up 151% to USD 400 million). Bolivia, which recorded no renewable energy investment in 2015, reached USD 800 million in 2016.

Investment in the Middle East and Africa was down 32% to USD 7.7 billion – the lowest level of investment since 2011. The decline was due primarily to pauses in financing in South Africa (USD 900 million) and Morocco (USD 700 million); both countries saw investment fall 75% relative to 2015. At the same time, investment increased during the year in Jordan (up 148% to USD 1.2 billion), Kenya (up 31% to USD 600 million) and Egypt, which recorded no renewable energy investment in 2015 and reached USD 700 million in 2016.

In Asia-Oceania (excluding China and India) investment fell 42% to USD 26.8 billion – the lowest since 2011, due largely to the decline in Japan. Other countries in the region with decreases included the Philippines (down 47% to USD 1 billion), Pakistan (down 58% to USD 900 million) and Chinese Taipei (down 2% to USD 700 million). However, some countries saw significant increases in investment, including Singapore (up 14-fold to USD 700 million), Vietnam (up 143% to USD 700 million) and Indonesia (up 84% to USD 500 million). Mongolia, which recorded no renewable energy investment in 2015, reached USD 200 million. Thailand recorded an investment of USD 1.4 billion (up 4%), the highest level in the region (after China and India).

iRegions presented in this chapter reflect those as presented in UNEP-FS and BNEF, Global Trends in Renewable Energy Investment 2017 (Frankfurt: 2017), and differ from the regional definitions across the rest of the GSR, which can be found at www.ren21.net/GSR-Regions. i

iiThe five BRICS countries are Brazil, the Russian Federation, India, China and South Africa. ii

iiiThe Chinese government estimates that hydropower facilities of all sizes completed in 2016 represent an investment of USD 8.8 billion (CNY 61.2 billion); as such, 2016 marked the fourth consecutive year of decline, per National Energy Administration of China, national electric industry statistics as sourced from China’s National Energy Board, 16 January 2017, http://www.nea.gov.cn/2017-01/16/c_135986964.htm. iii

Investment by Technology

New investment in renewable energy in 2016 continued to be dominated by solar (mostly solar PV) and wind power, which each accounted for roughly 47% of total investment. Both technologies experienced declines in dollars invested in 2016, with solar power down 34% to USD 113.7 billion and wind power down 9% to USD 112.5 billion. Significant cost reductions played a large role in these falling investment numbers, particularly for solar PV, which saw a market increase of nearly 50% relative to 2015. ( See Solar PV section in Market and Industry Trends chapter.)

Figure 42. Global New Investment in Renewable Power and Fuels, by Country and Region, 2006-2016


Source: BNEF.

Note: Data include government and corporate R&D.

Investment in biomass/waste-to-energyi and small-scale hydropower remained stable at USD 6.8 billion and 3.5 billion respectively. Investment in biofuels (down 37%) and ocean energy (down 7%) declined to USD 2.2 billion and USD 200 million respectively. The only technology to witness increases in new investment in 2016 was geothermal power, which was up 17% to USD 2.8 billion. ( See Figure 43.)

In 2015, emerging and developing economies accounted for more than half of global investment in both wind and solar power, but in 2016 they lost the lead in wind power and only narrowly maintained it in solar power. Investment in wind power was up 13% to USD 60.6 billion in developed countries, but down 27% to USD 51.9 billion in developing countries. Solar power investment declined in developed and in developing and emerging countries, down 33% (to USD 56.2 billion) and 35% (to USD 57.5 billion), respectively.

Large-scale hydropower projects over 50 MW in size represented the third most important sector (after solar and wind power) for renewable energy investment in 2016. Translating hydropower capacity additions into asset finance dollars per year is not straightforward because the average project takes four years to build. Although BNEF does not track detailed statistics for large-scale hydropower projects, it estimates that asset financing for large-scale hydropower projects reaching financial go-ahead in 2016 totalled at least USD 23.2 billion, down 48% from 2015.

iIncludes all waste-to-power technologies, but not waste-to-gas. i

Investment by Type

Global research and developmenti (R&D) spending fell 7% in 2016, to USD 8 billion, due to a decline in the corporate sector. While government R&D increased 25% relative to 2015, to a record USD 5.5 billion, corporate R&D decreased almost 40% as wind and solar power manufacturers reduced their spending. Europe was again the biggest regional investor in R&D, despite an 8% decrease to USD 2.2 billion. China’s investment declined 2% to USD 2 billion but stayed well ahead of the United States, where spending rose 13% to USD 1.5 billion.

Total R&D spending was down for both solar (down 20% to USD 3.6 billion) and wind power (down 13% to USD 1.2 billion) in 2016. Despite low oil prices and a challenging regulatory environment, R&D spending on biofuels increased 11% to USD 1.7 billion.

Figure 43. Global New Investment in Renewable Energy by Technology, Developed and Developing Countries, 2016


Source: BNEF

Asset finance of utility-scale projects accounted for the vast majority of total investment in renewable energy. It totalled USD 187.1 billion during the year, a decrease of 21% relative to 2015, due to lower per MW installed costs of wind and solar power, as well as to a slowdown in China and Latin America.

Small-scale distributed capacity investment, largely solar PV systems of less than 1 MW, declined 28% to USD 39.8 billion. The United States led investments in this category with USD 13.1 billion, followed by Japan with USD 8.5 billion (down from USD 27.9 billion) and China with USD 3.5 billion.

Public market investment in renewable energy companies and funds fell 53%, to USD 6.3 billion. Funds raised by initial public offerings (IPOs) increased 12% to USD 2.6 billion. In the United States, investments via public markets in “yield companies” (yieldcos) were much less active in 2016 than in 2015, and no new funds were launched. Overall, solar power companies and related funds raised USD 1.7 billion (less than one-fifth of the previous year’s total), while wind power raised USD 4.2 billion (an increase of 66% compared to 2015).

Venture capital and private equity investment (VC/PE) in renewable energy decreased 4% to USD 3.3 billion in 2016. As in previous years, solar power companies attracted the most venture capital and private equity investment, with more than two-thirds of the total, although funding decreased 2% to USD 2.3 billion. Increases were seen in both wind (up 41% to USD 539 million) and small-scale hydropower, with investment in the latter almost quintupling, to USD 165 million, due mainly to a single deal. Biofuels decreased 60% to USD 254 million. The United States remained the centre of worldwide VC/PE investment in renewables, representing more than two-thirds of the total with USD 2.3 billion (down 2% from 2015).

Acquisition activity – which is not counted as part of the USD 241.6 billion in new investment – jumped 17% to a new record of USD 110 billion. Growth was driven mainly by corporate mergers and acquisitions (M&A; the buying and selling of companies), which increased 58% to USD 27.6 billion, and by public market investor exits, which almost quadrupled, to USD 6.7 billion. Asset acquisitions and refinancing remained the largest single category of acquisition activity, with deals worth USD 72.7 billion equating to 66% of the total. Within this category, activity increased in the United States (up 14% to USD 29.2 billion), Europe (up 8% to USD 28.6 billion) and China (up 7% to USD 4.4 billion). In all other regions, asset acquisitions and refinancing decreased. Private equity buy-outs were down 2% relative to 2015, to USD 3.4 billion.

iSee Sidebar 5 in GSR 2013, “Investment Types and Terminology”, for an explanation of investment terms used in this section. i

Renewable Energy Investment in Perspective

In 2016, renewable power technologies continued to attract far more investment dollars than did fossil fuel or nuclear power generating plants. An estimated USD 249.8 billion was committed to constructing new renewable power plants (including USD 226.6 billioni without large-scale hydropower, plus an estimated USD 23.2 billion for hydropower projects larger than 50 MW). This compares to approximately USD 113.8 billion committed to fossil fuel-fired generating capacity and USD 30 billion for nuclear power capacity. Overall, renewable energy accounted for about 63.5% of the total amount committed to new power generating capacity in 2016. ( See Figure 44.)

iThis number is for renewable power asset finance and small-scale projects. It differs from the overall total for renewable energy investment (USD 241.6 billion) provided elsewhere in this chapter because it excludes biofuels and some types of noncapacity investment, such as equity-raising on public markets and development R&D. i

Sources of Investment

Debt makes up the majority of the investment going into many utility-scale renewable energy projects, either at the project level in the form of non-recourse loans, bonds or leasing; or at the corporate level in the form of borrowings by the utility or project developer. In 2016, commercial banks provided most of the project-level debt for renewable energy projects.

Green bonds are a growing asset class for investors around the world. They include qualifying debt securities issued by development banks, central and local governments, commercial banks, public sector agencies and corporations, asset-backed securities and green mortgage-backed securities, and project bonds. In 2016, issuance of green bonds globally almost doubled to USD 95.1 billion. This included the first sovereign green bond, issued by Poland. China increased its issuance to USD 27.1 billion, overtaking the United States with USD 15.5 billion.

In addition to commercial banks and bond issues, the other major source of debt for renewable power assets is borrowing directly from the world’s large array of national and multilateral development banks. Aggregate figures for development bank lending to renewables in 2016 were not yet available at the time of publication. Among those that had published data in early 2017, Germany’s KfW provided the Euro-equivalent of USD 39 billion for “environmental and climate protection financing” (up 20% in Euro-value relative to 2015), including USD 8 billion for renewable energy and USD 23.5 billion for energy efficiency. The ADB approved USD 3.7 billion in climate finance investments, an increase of 42% relative to 2015, to support efforts in developing member countries.

Electric utilities continued to be an important source of on-balance-sheet finance and project-level equity in 2016. Nine of the largest European utilities invested a total of USD 11.5 billion in renewables in 2015 and were on track to invest USD 10.2 billion in 2016.

Institutional investors such as insurance companies and pension funds tend to be more risk-averse and therefore are interested in the predictable cash flows of a project already in operation. In Europe, direct investment by institutional investors in renewable energy totalled USD 2.8 billion in 2016, on par with the record set in 2014, more than double the 2015 level and nearly 10 times the total in 2010.

Early Investment Trends in 2017

Global investment in renewable energy was USD 50.84 billion in the first quarter (Q1) of 2017, down 20.9% from Q1 in 2016 (USD 64.25 billion). This decline reflects drops in investment in the two biggest markets, the United States and China. US investment in Q1 2017 was down 42% relative to Q1 in 2016, to USD 6.9 billion, and China’s investment declined 11% to USD 17.2 billion. Investment in Europe also dropped significantly (down 61.7%): in the United Kingdom, where there was no new finance in offshore wind power, investment fell 92% to USD 1.1 billion in Q1. Countering this drop, investments in Germany and France were up 94% and 138%, respectively.

Figure 44. Global Investment in Power Capacity, by Type (Renewable, Fossil Fuel and Nuclear Power), 2012-2016


Source: BNEF.

Developing countries showed varying investment patterns in Q1 2017. Investment fell slightly in India (down 2% to USD 2.8 billion) and Brazil (down 3% to USD 1.8 billion), while Mexico’s investment was up 47-fold, to USD 2.3 billion.

Investment in both solar and wind power, which accounted for the lion’s share, declined in Q1 2017 compared to Q1 2016, by 6.7% and 40.6% respectively. Investment in offshore wind power was down 60% relative to Q1 2016, to USD 4.6 billion. Biomass and waste-to-energy, small-scale hydro and geothermal power all saw increased investment in Q1 2017.

Asset finance of utility-scale renewable energy projects amounted to USD 39 billion in Q1 2017, down 27.5% relative to Q1 2016. Small-scale solar projects (less than 1 MW) represented the second largest category of spending, worth an estimated USD 10.7 billion in Q1, up 8% compared to Q1 in 2016.


  1. The BNEF estimate for investment in large-scale hydropower (>50 MW) is based on some 12.6 GW of new capacity that secured financing during 2016. Some projects have a disclosed capital cost, but many do not; BNEF estimates the total investment in the latter group based on average cost per MW in different markets, ranging from USD 1.2 million in China to USD 6 million in Canada. Estimates are approximate only, due greatly to the fact that timing of the investment decision on a project may be about four years on average away from the moment of commissioning. As a result, a large share of the investment total for the projects commissioned in 2016 was actually invested in prior years; in addition, there was investment during 2016 for projects that were still under construction in 2017 and were not included in the BNEF estimates. Note that data for hydropower projects larger than 50 MW may differ somewhat between this GSR and the Global Trends in Renewable Energy Investment 2017 due to different methodologies and data sources. (p See Hydropower section in Market and Industry Trends chapter.)1
  2. National Energy Administration of China, national electric industry statistics as sourced from China’s National Energy Board, 16 January 2017, http://www.nea.gov.cn/2017-01/16/c_135986964.htm.2