China has knocked the US from a shaky top place in global clean energy rankings as worldwide investment declined, according to a report published today.
Who's Winning the Clean Energy Race 2012, published by Pew Charitable Trusts found that among the Group of 20 nations, China reclaimed the top spot from the US, attracting $65.1 billion, a 20% increase over 2011 and 30% of the total for the G-20. China added 23GW of clean energy generating capacity, bringing its total to 152GW.
Although globally, the sector demonstrated resilience in 2012, registering a record 88GW of additional generating capacity, investment levels declined 11% to $269 billion from 2011 levels, said the report compiled by Bloomberg New Energy Finance.
Phyllis Cuttino, director of Pew’s clean energy programme, said: “We have seen a trend where in almost every year investment has expanded and this is one of the first years we've seen it contract. Part of the contraction is due to policy in the US and EU nations that have pulled back on their feed in tariffs, or made them less generous. There's certainly been a contraction in investment.
“A decline in investment is certainly a bad trend that we hope will turn around. The thing that is hopeful, is that we have seen prices dropping more installations for less money. So that's a good trend.
“China has done everything right by putting long-term consistent policies in place, goals for clean energy in every case they have increased them. If you're looking for a place to invest, China sure looks like a good bet.”
For the second year in a row, solar technologies attracted more financing than any other technology: $126 billion was invested in the subsector in 2012, or 58% of the G-20 total. China soaked up 25% of investments but Europe and the US continued to be top markets for solar investment.
Cuttino said: “We're now seeing a lot more financing going into solar. That's a shift from wind, the most mature sector of the clean energy economy, to solar.”
Although solar investment fell 13% in 2012, lower prices made it possible for overall deployment to increase 6%, to 31GW. As of the end of 2012, 104GW of solar generating capacity was installed globally, four times its level in 2009.
“Cost declines in solar mean that less investment has gone further,” she said. “What we're seeing for the first time is a decline in investment globally but an increase in installed capacity.
The United States fell to number as investment in the sector declined 37%, to $35.6 billion. In third place, Germany curtailed incentives and saw investment decline 27%, to $22.8 billion. However, 7.5 GW of solar generating capacity were added in Germany—the most of any G-20 country.
The report also remarked on a significant geographic shift in clean energy investments. For the first time, Asia became the leading regional destination for clean energy investment. Investment there grew 16% in 2012, to $101 billion, accounting for 42% of the global total. Investment in Europe, the Middle East and Africa fell 22%, to $87.6 billion.
In the Americas, financing dropped 31% in 2012 to $50.3billion. “The sharp decline followed growth of more than 30% in 2011, reinforcing a pattern of investment volatility in the Americas and driving financing in the region to the lowest level since 2009,” said the report.
Japan reemerged as a top destination for clean energy investment with its feed in tariff to promote clean energy after the Fukushima Dai-ichi nuclear disaster in 2011. Clean energy investment increased 75% to $16.3 billion, almost all in the solar sector, which added more than 2GW of generating capacity.
South Africa was the fastest-growing market in the G-20, with investment growing from less than $30 million in 2011 to $5.5 billion in 2012. The South African solar sector attracted $4.3 billion in 2012, or 80% of the total.