The global renewable power industry is expected to add capacity of 154.6 gigawatts (GW) in 2018 with $228.3 billion investment, a Frost & Sullivan report said.
Solar photovoltaics (PV) with almost 90 GW of new additions will be the driver of the global renewable energy sector. Wind energy will add capacity of 53 GW this year.
The report said investment in renewable energy segments such as biomass, geothermal and small hydropower plants will be slower. This is primarily due to the fact that they depend on resource availability, have greater risks, and require higher upfront costs.
Ocean power will continue growing, but it will be awhile before it reaches the status of other renewables.
The global investment in renewable energy is expected to dip 0.7 percent to touch $228.3 billion in 2018 due to the solar capacity reductions in China.
“The Chinese government’s announcement of modifications to its solar policy changed the projections the renewable industry had for 2018 and the following years,” said Maria Benintende, Energy & Environment Senior Industry Analyst at Frost & Sullivan.
The report said the number of countries cutting subsidies increases. The renewable market is compelled to consider purely commercial alternatives to feed-in tariffs, such as competitive auctions and private-sector power purchase agreements.
North America is expected to maintain investment levels at $33.17 billion for 2018 thanks to its strong base for renewable power generation.
Latin America’s power markets in Mexico, Argentina, Brazil, and Colombia, among others, are important to build momentum in the renewable energy market. Latin America will achieve 20.1 percent growth in installed capacity with $17.7 billion in investment.
Asia will be responsible for 58 percent of the global new installed capacity in 2018. Solar, wind, and biomass will account for 96 percent of the total investment in the region, which will total to $114.96 billion in 2018.
Europe is already on track to meet the Renewable Energy Directive of having 20 percent renewables in the energy mix by 2020. Europe region recently raised the bar by committing to 32 percent by 2030.
Africa and the Middle East’s investment in renewables will surpass investments in other power generation technologies, with solar PV utility-scale being a key market. However, infrastructure funding in Africa and the domination of fossil fuels in the Middle East remain challenges.