Global investment in solar power projects fell 19 percent in the first half of 2018 from $71.6 billion in the same period last year owing to cutbacks in China and lower equipment costs, the Bloomberg New Energy Finance (BNEF) has reported.

The report indicated that trends that were expected to further strengthen in the second half of this year.

According to the research agency, a mixed picture for global clean energy investment in 2018 is emerging, with dollar investment in solar under pressure while commitments to wind power and energy smart technologies such as electric vehicles and batteries are running above last year’s levels.

Statistical data compiled by BNEF on the clean energy trend showed that world investment in clean energy in the first six months of 2018 stood at $138.2 billion, down just 1 per cent from the same period in 2017. The second quarter, from April to June, actually saw a rise year-on-year – of 8 per cent to $76.7 billion.

“A sectoral split for the first half of 2018 shows solar investment down 19 per cent compared to the same period last year at $71.6 billion, with wind up 33 per cent at $57.2 billion.

“The slippage in solar reflects two main developments – significantly lower capital costs for photovoltaic projects, and therefore fewer dollars spent per megawatt installed; and a cooling-off in China’s solar boom. These trends are set to gather pace in the second half,” BNEF stated

On June 1, the Chinese government released a policy document restricting new solar installations that require a national subsidy, with immediate effect.

Reacting to the policy measure, head of Asia-Pacific at BNEF, Justin Wu, stated that the research agency expected the measure “to lead to sharp drop in installations in China this year, compared to 2017’s spectacular record of 53GW.”

In a similar remark, Pietro Radoia, senior solar analyst at BNEF, said: “It will also mean overcapacity in solar manufacturing globally, and yet steeper price falls. Before the Chinese announcement our team was already expecting a 27 per cent fall in PV module prices this year. Now we have revised that to a 34 per cent drop, to an end-2018 global average of 24.4 U.S. cents per watt.”

BNEF attributed the rise in wind power investment in the first half of 2018 to a stream of large project financings from the U.S. to Taiwan and from India to the Netherlands and Norway.

It stated: “The headline deals included $1.5 billion for the 731.5 MW Borssele 3 and 4 offshore wind farm in Dutch waters, $1 billion for the 478 MW Hale County onshore wind project in Texas, and $627 million for the 120 MW Formosa 1 Miaoli project.

“Apart from wind, equity-raising by specialist companies in energy smart technologies saw a 64 per cent increase year-on-year, to $5.2 billion.

“The smaller sectors of clean energy – biomass and waste, small hydro, geothermal and biofuels – each saw investment in the $0.7-1.2 billion range in the first half of 2018. All apart from biofuels were down compared to the same period of 2017”, BNEF reported.