Report: Global Renewable Investments in 2012 Tumble 11% as Market Shifts from West to East

Public and private investment in solar, wind, and other renewables worldwide declined 11% in 2012 from an adjusted 2011 record of $302 billion, a new survey from Pew Charitable Trusts shows. Yet the global renewable sector still registered a record 88 GW of new nameplate capacity last year, and China reclaimed the lead in global renewables investments from the U.S., it says.

Data for the report, " Who’s Winning the Clean Energy Race? 2012 Edition " from the nonprofit group was compiled by market research firm Bloomberg New Energy Finance. The report examines how nations are faring in "increasingly stiff competition for private funding" and seeks to identify what drives investment, innovation, commercialization, and installation of renewable technologies.

A key finding of the report points to "ongoing resilience" of the emerging power sector in the global economy. "For the third straight year, investment reached more than $200 billion, and 2012 ended with five times that of 2004. Every year, new markets open up and more renewable power is deployed around the world," said Phyllis Cuttino, director of Pew’s clean energy program. "Even though government policies have been uneven and unpredictable in certain markets, the economic, environmental, and security benefits of clean technologies are driving the sector forward. Countries that prioritize policy are positioning themselves for increased private investment, as well as manufacturing and job-creation opportunities."

One emerging trend highlighted by the report is a shift of renewable investment from West to East. Growth of renewables was notable in 2012 in smaller countries outside the Group of 20 (G-20), the report says, noting that investment there increased by 52% to more than $20 billion. G-20 nations, however, saw a "collective decline" in private investment of 16%, attracting about $218 billion. That trend is expected to continue, and 10% to 18% annual growth for clean energy is projected in parts of Asia, Africa, the Middle East, and Latin America through 2020.

Asia in particular is emerging as a clean energy hub, according to the report. Last year, Asia saw investment in the region surge 16% to $101 billion, accounting for 42% of the global total. Investment, meanwhile, fell in leading markets such as Germany, Italy, the UK, and Spain, where governments have cut renewables subsidies on austerity measures.

Japan, notably, has reemerged as a top destination for clean energy investment as the country attempts to restore reliability following closure of most of its nuclear power plants in the aftermath of the Fukushima Daiichi disaster in 2011. Renewables investment over 2012 in that country increased 75% to $16.3 billion—almost all in the solar sector. South Africa’s solar sector also attracted a significant $4.3 billion and another $1.1 billion for its wind sector.

Renewables investment fell "most precipitously" in the Americas last year, the report says. Clean energy financing fell 31% in 2012 to $50.3 billion, a decline that followed growth of more than 30% in 2011.

As has been widely reported by several entities, the solar sector in 2012 became the leading recipient of investment dollars—even though wind energy remained the most cost-competitive technology, according to the report—attracting $126 billion in 2012 (of 58% of the G-20 total). Wind energy saw a substantial $72.7 billion, but investment fell 14% among G-20 countries. The UK and the U.S. saw gains in wind energy investment.

Investment in geothermal, marine, small hydro, and biomass/waste-to-energy technologies, meanwhile, collectively fell 29% to $13.5 billion worldwide.

Sources: POWERnews, Pew Charitable Trust

—Sonal Patel, Senior Writer (@POWERmagazine, @sonalcpatel)