Renewable energy: Seeing the full half of the COP

As delegates meet for the COP22 climate conference, renewable energy emerges as a big ticket item. Renewables now account for 35% of electricity generation in Europe but only 13% in the U.S.

Investments in renewables have reached a new record of USD286bn in 2015 despite low oil prices. Wind and solar energy lead, while other clean energy sources, especially biofuels, have fallen behind. Profit margins are far from impressive. Solar struggles with an average -10% operating margin on a yearly average, while wind stands at -1%.

Solar continues to attract investments (USD380bn expected for 2016-2017) and surpass its deleveraged competitor, the wind industry, with USD270bn.

Over the next 3-5 years, solar companies should yield higher profitability rates, whereas the wind industry, will achieve a moderate 5% margin (2016 estimate).