Despite a ‘down’ year for clean energy investment in 2016 new solar-powered generating capacity grew at a tremendous pace in emerging markets, Bloomberg New Energy Finance found in a comprehensive new study of clean energy activity in key developing nations. This growth is fuelled by low-priced equipment and innovative applications that are expanding energy access for millions.

A total of 34 GW of new generating capacity came on line in 2016 in 71 emerging market countries studied by BNEF as part of its annual Climatescope* survey – an increase of 22 GW on 2015 and 3 GW as recently as 2011. Total cumulative solar capacity grew 54% year-on- year and has more than tripled in three years. Capacity added in 2016 alone would meet the total annual electricity demands of 45 million homes in India.

China accounted for the major part of this with 27 GW added, by far the most of any country. But other nations saw strong growth too. India added 4.2 GW, while Brazil, Chile, Jordan, Mexico, and Pakistan and nine other nations all saw installed photovoltaic capacity double or more in 2016. Overall, solar accounted for 19% of all new generating capacity added in Climatescope countries last year, up from 10.6% in 2015 and 2% in 2011. The use of photovoltaics in micro-grids, pay-as-you-go battery/lantern systems, water pumps, and even mobile phone towers is proliferating. Often, these efforts have flourished organically, unencumbered by governments and often led by entrepreneurs and venture capitalists. Most often, start-ups have taken the lead, securing financing from private sources and forging partnerships with large corporations such as telecom providers. More than 1.5 million households in Africa now use solar home systems that were bought on a mobile-money enabled financing plan, up from just 600 000 at the end of 2015. In Africa’s solar financing market, this business model is no longer niche and has closed some of the largest deals this year. The combination of solar power, end-customer financing and smart technology is spreading beyond homes into farms and connectivity hubs. For instance, the number of solar irrigation pumps installed in India reached 128 000 in May, up from 12 000 in April 2014.

“The huge drop in photovoltaic module prices we’ve seen over the last several years continues to reverberate through developing countries,” said Ethan Zindler, head of the Americas section for BNEF. “It is creating opportunities ranging from multi-million dollar projects that serve the grid, to small-scale installations that enable farmers to boost their yields through better irrigation and to connect to the internet.”

Climatescope is a detailed, country-by- country quantitative assessment of clean energy market conditions and opportunities of nations in South America, Europe, Africa, the Middle East, and Asia. The 71 countries account for 32.5% of global GDP and 72.4% of global population. Based on 43 data indicators and 179 sub-indicators, BNEF determines scores for each nation on a 0-5 basis and then ranks them.

Despite the solar surge, this year’s survey included some troubling findings. For the first time since the survey was launched four years ago, the average country score fell year-on- year. Nations sampled collectively scored 1.35 in last year’s survey. That average fell to 1.19 this year, although the figure was skewed somewhat with the addition to the survey of 13 nations from Central Asia and Europe, many of which scored low. The lower scores were attributable to lower clean energy investment and weak progress on policy-making. Total new clean energy investment in non-OECD countries fell by $40.2 billion to $111.4 billion in 2016 from $151.6 billion in 2015. While China accounted for three quarters of the decline, new clean energy investment in all other non- OECD countries also fell 25% from 2015 levels.

In terms of policy, of the nations researched by BNEF, 76% have established domestic CO2 containment goals. However, only 67% of them have introduced feed-in tariffs or auctions to support clean energy projects, and just 18% have set domestic greenhouse gas emissions reduction policies.

These detailed, technical regulations have proven critical to attracting private capital in developing countries and facilitating scale- up. China remains the world’s single largest market for clean energy development, but saw new asset (project) investment fall by $36.6 billion year-on-year. Seven of the top 10 ranked nations scored lower this year than in the previous survey. Brazil, Jordan, Mexico, India, South Africa, Chile, Kenya, Uruguay and Vietnam make up the rest of the top 10.