Monica Trauzzi: Hello, and welcome to OnPoint. I’m Monica Trauzzi. With me today is Phyllis Cuttino, director of the Pew Clean Energy Program. Phyllis, thank you so much for coming back on the show.

Phyllis Cuttino: Well, thanks for having me.

Monica Trauzzi: Pew has just released its annual report on global clean energy investments, and let’s start here in the United States. So in 2013, investments were down by 9 percent. You attribute this to policy uncertainty. Are there other factors at play here? Is the market just not demanding activity in this space?

Phyllis Cuttino: Well, one of the factors is frankly a good one, which is price reductions in technology. So for instance, when it comes to solar, since 2011, there’s been a 60 percent drop in prices here in the United States, so that’s good for consumers because it means, of course, invest — less investment goes further. And in fact, here in the United States, the solar story was a good one last year. We installed more solar gigawatts than we have previously — 4.4 gigawatts — and even around the world. Solar capacity, 40 gigawatts installed, so 40 gigawatts is about a third of the amount of solar that is currently installed around the world, and if you look — if you compare it, we put in the ground or we — around the globe — 40 gigawatts of solar. That’s as much as was installed between 2001 and 2011. So you know, lots of good news happening despite some declines in investments.

Monica Trauzzi: Right. So solar is doing really well. Wind, however, has seen declines in installation. Why does there continue to be such a large disparity between these two forms of energy, and it seems to be getting more pronounced as time goes on.

Phyllis Cuttino: Well, we are finding that investment is flowing now from wind to solar, so solar seems to be the kind of favored technology, but you know, solar has a long way to go to catch up with wind. We have 300 gigawatts of wind installed around the world. Solar’s not quite there, but you know, we’re finding that wind is really impacted here in the United States dramatically, for instance, by policy. They’ve been subject to these episodic renewals of the production tax credit. Today, you know, we’re going to see that again with the Finance Committee meeting to consider extenders legislation, so you know, we saw a 90 percent drop in wind installations, down to less than 1 gigawatt last year, and that has to do with whether or not investors have the certainty they need to plan, invest and deploy. And so we’ve just got to get this long-term policy in place that’s really going to incentivize investment and deployment of clean energy.

Monica Trauzzi: The Department of Energy is set to distribute clean energy and renewable energy loan guarantees. How could that type of funding affect the future of solar and wind?

Phyllis Cuttino: Well, I think it’s — it is becoming a nice antidote, frankly, to a decrease we’re seeing in venture capital. You know, it’s very hard to raise the kind of early money you need in such a capital-intensive industry. So that’s why not only policy, but having these kind of early infusions of loan guarantees, guaranteed loans to the sector are really important because what we find is, when government steps in, whether or not it’s ARPA-E or the Department of Energy loan guarantee program, we see a lot more confidence built in the private sector. So I think, you know, government’s performing the role that they have for other industries when they’re doing this kind of thing, whether or not it’s health or defense or, you know, across a bunch of technologies.

Monica Trauzzi: How does the heavy focus on natural gas affect clean energy investments?

Phyllis Cuttino: Well, I think there’s been a lot of, obviously, attention spent on natural gas, but you know, I think we’ve seen that clean energy is really here to stay. It’s a quarter-of-a-trillion-dollar sector of the global economy. I think it’s — we’re going to see greater investment than next year than we have — or this year, in 2014, than we did in 2013. And the sector has really weathered kind of unbelievable challenges — the global recession, a pullback of incentives, policy uncertainty, and still we’re seeing all kinds of good trends — prices coming down, as I mentioned, more deployments, you’re seeing technologies get more and more efficient, manufacturers are coming back and profitable, and this year we saw — or in 2013, rather, we saw a surge in public sector market confidence, so 176 percent increase in investments through the stock market. So that’s great news for the sector.

Monica Trauzzi: So let’s talk about Europe. That market has seen declines. The U.K. is the only country showing gains. What’s happening there?

Phyllis Cuttino: Well, that is the story of 2013 is the dramatic declines in Europe. They — their investment in 2013 was half of what it was in 2011, down to 55 billion. I think we’ll see greater investment next year, but with austerity measures being put in place, we saw dramatic declines in Germany, a stalwart, in Italy, in Spain, and so that really explains much of the decline in overall investment around the world is really what happened in Europe.

Monica Trauzzi: And Germany’s story is so interesting because they were considered the leaders for so long with their energy wind project, and other countries were really looking to them as an example. So why the dramatic pivot there?

Phyllis Cuttino: Well, I think what happened, again, is there were reforms of incentives of the feed-in tariffs, and there were other more attractive markets. So, you know, we saw a jump of 90 percent of investment in Japan. Japan actually moved to third, so it’s China, the United States and Japan displacing Germany, and that was based on the fact that Japan, in many ways like Germany, is trying to move forward and diversify their energy mix in the wake of Fukushima, but they had very rich feed-in tariffs put in place, and that has really stimulated investment. But another interesting thing I think is happening is, while we are seeing a decrease in some of these more mature markets among the G-20, we’re seeing an increase of about the same amount in non-G-20 nations. So there’s a lot of opportunity happening in Africa, in Asia, in Latin America, in Uruguay, in Chile, so those markets are growing. And the important thing for the United States, I think, is that it’s an opportunity for United States — for U.S. products to be exported into those markets. So we should really look to that as an opportunity.

Monica Trauzzi: Final question here on China. Like you said, they’re still leading the way. What are they doing so different from other countries that keeps them at the top year after year?

Phyllis Cuttino: Right. Well, they have kept in place ambitious renewable energy policies for a long time, and they are a large market, and what we’ve seen is just remarkable deployments of wind and solar. Twelve gigawatts of solar deployed of solar in China just last year. So they’re really open for business. They have, you know, they’ve put in place these very ambitious policies, and investors have confidence in going there, and so we’d like to see more of that in the United States.

Monica Trauzzi: All right. We’re going to end it right there. Thank you for coming on the show.

Phyllis Cuttino: Thanks, Monica.