The U.S. International Trade Commission (USITC) reports that global demand for renewable energy services – such as consulting, engineering, construction, equipment maintenance and repair – has grown rapidly in the past five years, making the U.S. and Europe leading importers and exporters of solar and wind services.
The analysis, prepared at the request of the Office of the U.S. Trade Representative (USTR), offers estimates of the U.S. and global markets for trade and investment in services essential to energy production in the solar, wind, small hydropower and geothermal sectors. The report also outlines trade barriers that may apply to these services.Â
The USTR would not comment on what aspects of the current trade situation prompted it to request a renewable energy services report. However, it can be gathered from the analysis that renewable energy services represent a significant and growing market opportunity for U.S. firms operating in this sector. The USTR says it is still reviewing the USITC report.
According to the report, global renewable energy capacity more than doubled to 653 GW between 2007 and 2012, while global investment stood at a record $244 billion in 2012, up 71% during that period. While the USITC says data on renewable energy services are not available, capacity and investment growth indicate similar growth in related services. Moreover, the U.S. is consistently among the largest markets for renewable energy services, alongside Europe and Asia, particularly China.
The USITC report estimates the value of global solar photovoltaic services associated with installations to be $34 billion in 2011. The largest markets for such services were Italy ($9.8 billion), Germany ($5.1 billion), the U.S. ($3.1 billion) and Japan ($3.0 billion).
The global market for services related to installation of wind equipment was estimated at nearly $23 billion in 2011, with the largest markets including China, the U.S., Germany and Canada, the report says. The global market for wind operations and maintenance services in 2011 was estimated at $6.2 billion to $7.2 billion, with Europe believed to account for roughly half of that market.
The value of the global market for services associated with all hydropower installations in 2010 was nearly $71 billion, of which small hydropower accounted for an estimated $2.3 billion. Geothermal installation services in the global market were estimated at $315 million in 2010, while the operations and maintenance of existing geothermal facilities required services expenditures estimated at $2.5 billion.
Although few trade barriers apply specifically to the provision of renewable energy services, local content requirements applied to renewable energy equipment in many countries act as significant barriers to trade in related services, the agency found. While local content requirements do not typically target service providers, they often serve as de facto barriers to services provision as many wind and solar equipment manufacturers provide services in tandem with the sale of their goods.
Other trade barriers affecting renewable energy services include general investment restrictions and measures that impede the free movement of service providers.
The USITC report, ‘Renewable Energy and Related Services: Recent Developments,’ is available here.