Despite challenging market conditions, bankruptcies and consolidation, key indicators show signs of improvement in the clean tech sector, according to EY’s newly released annual cleantech industry performance report.
“The cleantech sector globally has shifted to growth. Resource scarcity, energy security concerns, population growth and increasing consumption by expanding middle classes in emerging markets will continue to drive this cleantech market growth.” — Gil Forer, EY’s Global Cleantech Leader
Noting a bounce back in market capitalisation, boosted by energy efficiency companies and renewables, the financial performance of public pure-play (PPP) cleantech companies has improved while their number has grown globally, the document concludes.
Globally, the cleantech sector saw the creation of 68 new PPP companies in 2012 and lost 63 companies over the same period. The U.S. and China remain the leading countries in terms of PPP companies, with 70 and 64 respectively, while the Asia-Pacific region emerges as the growth driver, with China leading headcount growth. Indeed, the Asia-Pacific region was the main winner, increasing 16 percent to 177 companies, while the company population in Europe, the Middle East and Africa (EMEA) contracted by 8 percent to 135 companies.
The renewable energy sector evidenced important signs of recovery as generation companies showed across the board gains, benefitting from lower equipment costs. The number of companies increased by 14 percent to 32, market capitalisation increased 8 percent to US $25.5 billion and revenues increased 23 percent to $11.1 billion, EY states.
While the number of wind equipment companies fell by 2 percent to 53, market capitalisation increased by 2 percent to $30.8 billion and revenues increased 14 percent to $35.3 billion. However, the picture for solar is more mixed, with the number of solar equipment companies falling by 2 percent but market capitalisation up 14 percent to $28.8 billion. However, according to the analysis, solar revenues declined by 16 percent to $42.5 billion.
Source: EY analysis
Biofuels also experienced significant growth in 2012 as the number of companies in the segment increased 8 percent to 41, market capitalisation shot up 25 percent to $13.1 billion and revenues grew 14 percent to $26.0 billion.
Commenting on the findings, Gil Forer, EY’s Global Cleantech Leader, says: “We’ve seen a notable upturn in the performance of the 424 public pure-play cleantech companies globally. Despite a challenging period of consolidation in certain cleantech segments, fiscal issues in some countries and the continuing impact of the financial crisis; we’ve seen an annual gain of 18 percent in market capitalisation, and [a] 12 percent increase in headcount.”
According to the research, the global headcount of public cleantech companies stands at 512,500 with China, having over half the global headcount, the source of this growth, led by additions in the solar and wind segments globally.
Forer concludes: “The cleantech sector globally has shifted to growth. Resource scarcity, energy security concerns, population growth and increasing consumption, by expanding middle classes in emerging markets, will continue to drive this cleantech market growth. China is consolidating its position as the most important cleantech market and is poised to overtake the U.S. as the number one centre for public cleantech companies.”