User:Elginong/sandbox

''' Why invest in renewable energy and why in Japan? '''

Host Country Analysis

Industry Analysis

There has been considerable growth in the renewable energy industry as global warming strikes as a constant major present and future concern. According to UN Environment Programme (UNEP) 10th “Global Trends in Renewable Energy Investment 2016”, coal and gas-fired electricity generation of US130 billion drew less than half of the investment in solar wind and other renewables at US$286 billion. Renewable energy set new records in 2015 for dollar investment, the amount of new capacity added and the relative importance of developing countries in that growth. The first time developing countries invested more in renewable energy compared to developed countries at US$156 billion and US130 billion in 2015 respectively. Japan in particular has invested US$36.2 billion into renewable energy. The total amount invested by developed countries increased by 19% from 2015 to 2016 and almost 17 times more since 2004. All this happened in a year in which prices of fossil fuel commodities – oil, coal and gas – plummeted, causing distress to many companies involved in the hydrocarbon sector. Also, solar energy is becoming more apparent with its cost declining over the years. Most notable is even with its very low costs, from 2015 to 2016, it has decreased even further by 5% for residential rooftop systems and 12% for larger industrial sized panels. So far, the drivers of investment in renewable energy, including climate change policies and improving cost-competitiveness, have been more than sufficient to enable renewable energy to keep growing their share of world electricity generation at the expense of carbon-emitting sources. As of 2013, we can see renewable energy has taken up a quarter of the world’s energy consumption and is continuously increasing. Though it will take time for the world to transition to clean, renewable energy, some countries are able to transition faster, depending on their available resources and political climate. Countries such as Costa Rica operated with 99% renewable energy in 2015 and Denmark being able to produce 140% of its energy needs from wind. As market incentives causing solar energy to become cheaper, it is foreseeable that by 2030 renewable energy capacity would double. In an economic standpoint, it is expensive not to switch to renewable energy in the future with its cost decreasing to lower than relying on fossil fuels.

Why should investors consider investing here?