These investment flows mean that renewable energy has become big business.Worldwide, at least 60 publicly traded renewable energy companies, or renewable energy divisions of major companies, had a market capitalization greater than $40 million in 2005. The estimated total market capitalization of these companies and divisions was more than $25 billion. The next largest 100 renewable energy companies or divisions would add several billion dollars more of market capitalization to this figure. Solar PV is becoming one of the world’s fastest growing, most profitable industries. Capacity expansion plans for 2005–2008 total several hundred megawatts, and an estimated $5–7 billion of capital investment will be made in 2005.[N17]

Perhaps the best illustration of how renewable energy has become big business is the entrance of the largest industry players into the wind power market, historically dominated by dedicated wind-turbine manufacturing companies. GE and Siemens are prominent examples of large electricalequipment companies that have entered the wind market in recent years, both through acquisition (GE bought Enron Wind in 2003 and Siemens bought Bonus in 2004). In China, five of the largest electrical, aerospace, and power generation equipment companies began to develop wind turbine technology in 2004. Four signed technology-transfer contracts with foreign companies and were planning to produce their first prototype turbines in 2005. Such big players are bringing new competencies to the market, including finance, marketing, and production scale, and are adding additional credibility to the technology.

The wind power industry produced more than 6,000 wind turbines in 2004, at an average size of 1.25 MW each. The top six manufacturers are Vestas (Denmark, merged with NEG Micon in 2004), Gamesa (Spain), Enercon (Germany), GE Energy (USA), Siemens (Denmark, merged with Bonus in 2004), and Suzlon (India). In China, there are two primary turbine manufacturers, Goldwind and Xi’an Nordex, with market shares of 20 percent and 5 percent respectively (75 percent of the market being imports). Global industry progress has been closely related to turbine size, with the average installed turbine increasing from 500 kW in 1995 to 1,300 kW in 2004. The U.S. and European wind industries now produce turbines in the 1,000–3,000 kW range, but production of 600–1,000 kW sizes is still common in India and China. European manufacturers have introduced prototype wind turbines in the 5,000 kW range. Making larger turbines is still the number-one technological issue in the turbine industry. The industry has continued to make innovations in materials, electronics, blade and generator design, and site optimization, and these innovations offer further potential for cost reduction.[N18]

The solar PV industry celebrated its first gigawatt of global cumulative production in 1999. Five years later, by the end of 2004, cumulative production had quadrupled to more than 4 gigawatts. Production expansion continued aggressively around the world in 2004, and annual production exceeded 1,100 MW. Announced plans by major manufacturers for 2005 included at least a 400 MW increase in production capacity and several hundred megawatts further capacity in the 2006–2008 period. The top three global manufacturers in 2004 were Sharp, Kyocera, and BP Solar (though rapid capacity expansions by many players lead to changes in the top positions year to year).[N19]

China and other developing countries have emerged as solar PV manufacturers. Chinese module production capacity doubled during 2004, from 50 MW to 100 MW, and cell production capacity increased to 70 MW. Production capacity could double again in 2005 due to announced industry plans. India has 8 cell manufacturers and 14 module manufacturers. India’s primary solar PV producer, Tata BP Solar, expanded production capacity from 8 MW in 2001 to 38 MW in 2004. In the Philippines, Sun Power planned in 2004 to double its cell production capacity to 50 MW. Solartron in Thailand announced plans for 20 MW cell production capacity by 2007. Across the whole industry, economies from larger production scales, as well as design and process improvements, promise further cost reductions.

Industries for biomass power and heat and small hydro are much more mature, localized, and diverse than those for wind and solar PV. Biomass heat and power investments tend to be made by the same companies generating waste biomass resources, such as timber and paper companies and sugar mills. European industry has maintained a leading position in the field of small hydropower manufacturing, with particular concern in recent years for upgrading and refurbishing existing plants. Small hydro technology improvements are focused on exploiting low heads (less than 15 meters) and small capacities (less than 250 kW). China’s small hydro industry numbers at least 500 enterprises producing hydro generators. In contrast, five large firms dominate the international geothermal power industry (Ansaldo, Fuji,Mitsubishi, Ormat, and Toshiba).[N20, N21]

The global ethanol industry is centered in Brazil and the United States. There were more than 300 sugar mills/distilleries producing ethanol in Brazil in 2004, and 39 new distillers were licensed in early 2005. In the United States, construction of 12 new ethanol plants was completed in 2004, bringing the total to more than 80. Also in 2004, construction of 16 new plants was started. Several large ethanol plants will begin production in 2005 in Germany and the United States. Brazil’s ethanol industry has also become a major ethanol exporter, accounting for about half of international shipments of ethanol during 2004. There was also considerable biofuels trade (of both ethanol and biodiesel) within the EU, and several other countries planned to expand their ethanol industries.[N22]

The sophistication of many segments of the renewableenergy industry increases year by year. For example, small wind turbine manufacturers are offering easier set-up and hybridization options with solar and other technologies. The off-grid solar PV industry is beginning to develop standardized "plug and play" packages for lanterns and full-scale household systems. Some companies are innovating with packaging hybrid systems; for example, one U.S. company is blending PV and small wind turbines on shipping containers with advanced batteries and controls to offer complete pre-packaged systems.More sophisticated controls, performance monitoring, and communications are being integrated into systems, allowing better energy accounting and more sophisticated billing and payment schemes.

The renewable energy industry continues to grow rapidly. Direct jobs worldwide from renewable energy manufacturing, operations, and maintenance exceeded 1.7 million in 2004, including some 0.9 million for biofuels production. Indirect jobs are likely several times larger. These estimates are preliminary, as published job estimates exist for only a few specific industries and countries. Examples of countryspecific estimates include: 400,000 jobs in the Brazil ethanol industry; 250,000 jobs in the China solar hot water industry; 130,000 jobs in Germany from all renewables; 75,000 jobs in the European wind industry; 15,000 jobs in the European solar PV industry; 12,000 jobs in the U.S. solar PV industry; 11,000 jobs in the Nepal biogas industry; 3,400 jobs in Japan from renewables; and 2,200 jobs in the EU for small hydro.*1[N24]