Clean energy investment in the first quarter of the year was at its weakest level since the global financial crisis, according to new figures from Bloomberg New Energy Finance (BNEF) that will raise fresh questions about the impact of policy uncertainty on green business confidence.

The analyst firm reported that new financial investment in clean energy during the first three months of the year reached $27bn, down 28 per cent on the previous quarter and 22 per cent year on year. Michael Liebreich, BNEF chief executive, said the performance represented the lowest quarterly level of clean energy investment in several years.

"A $27bn quarterly figure is not a disaster, but it is the weakest since the dismal $20bn seen in the first quarter of 2009, when the financial crisis was at its worst," he said in a statement. "The weak Q1 2012 number reflects the destabilising uncertainty over future clean energy support in both the European Union (driven by the financial crisis) and the US (driven by the expiry of stimulus programmes and the electoral cycle)."

He warned that after seeing clean energy investment reach record levels during 2011, the sector could face a relatively tough year, despite continued improvements in the cost and effectiveness of renewable energy systems. "There is no sign of a rapid turnaround in either of these regions in the next 12 months," he added. "Clean energy technologies, particularly solar photovoltaics and onshore wind, continue to fall in price and approach competitiveness with fossil-fuel power, but politicians in many countries appear to be ducking the decisions that would ensure the sector maintains its growth trajectory. We are seeing growth in some of the non-core markets around the world, but they will have a tough job replacing weakening demand in the developed world."

The latest figures – which cover venture capital, private equity, public markets and asset finance investment, but exclude small-scale projects and corporate and government research and development – show that asset finance was down 30 per cent on the previous quarter to $24.2bn.

The report confirms that a number of large-scale flagship projects were approved during the quarter, including the $961m Marena Wind Portfolio in Mexico, the $400m KVK Chinnu solar thermal plant in India, the $376m 201MW Post Rock Wind farm in Kansas, and the $317m Monsson Pantelina wind farm in Romania. But it also notes that changes to renewable energy subsidy regimes in Spain, Italy, Germany, Poland and the UK all had an impact on investor confidence, while the continuing Eurozone crisis created a tough financing environment for many new projects.

Meanwhile, developers in the US similarly face an uncertain outlook due to November's presidential election and the possibility that crucial grant schemes could be allowed to lapse at the end of the year.

The clean tech venture capital market provided the one bright spot for the sector, with the report confirming that venture capital and private equity investment during the quarter rose six per cent year on year to $1.9bn. However, Liebreich warned that the wider clean energy sector could see investment levels stall this year, despite strong long-term prospects for the industry. "The outlook for investment in the remainder of the year remains difficult," he said.

"The rapidly improving cost-competitiveness of renewable energy technologies is stimulating activity, particularly in developing countries. However, it is becoming harder to see the sector worldwide beating last year's record, unless the storm-clouds lift in Europe and US Congress stops bickering and sends some clear signals about the importance of new energy technologies. Meanwhile, continuing improvements in the sector's economics mean companies that survive these next few years, whether on the industry's supply or demand side, will be well positioned for the next growth phase."

The BNEF report comes just hours after the Pew Charitable Trust's think tank released its annual study on clean energy investment, confirming that 2011 saw record levels of spend across the sector, with total investment climbing to $263bn.