It’ll come as no surprise that global investment in clean energy fell last year. Quarterly numbers had foreshadowed that investors and governments were retreating from big green bets. But here’s the twist: Though investment dropped 11%, to $269 billion in 2012, renewable energy installations grew by a record 88,000 megawatts (MW), according to a report released today by the Pew Charitable Trusts.
Latest from Quartz:
That means the price of producing green energy is falling, giving developers more bang for their buck. Solar investment, for instance, dropped 13% in 2012 but installations jumped 6%, shows data compiled by Bloomberg New Energy Finance for Pew.
That helps explain why renewable energy accounted for almost half of the new electricity generating capacity added in the US in 2012. And in Europe it was a whopping 70%, even as beleaguered governments slashed support for wind and solar. Solar investments in Germany, for instance, plunged 27% in 2012, and yet it built a record 7,200 MW of new photovoltaic generating capacity—nearly twice what China and the US installed last year.
The report also confirms another trend: The epicenter of renewable energy investment and deployment is shifting east to Asia and Oceania. Investment in those regions grew 16% in 2012 to $101 billion, nearly half of the global spend on renewable energy.
China has now outstripped the US, putting $65.1 billion into green energy projects—up from $5 billion in 2005—as it pursues ambitious renewable targets. By itself, China accounted for a third of investment by G-20 nations. US investment, meanwhile, fell 37% last year to $35.6 billion. “Given its world-leading long-term goals and record for meeting or exceeding mileposts en route to these goals, China is likely to be a world leader throughout this decade,” wrote the Pew report’s authors.
But as we’ve written before, keep an eye on Japan and the Middle East. These are two emerging hotspots, particularly for solar energy. Trying to diversify its sources of power in the wake of the 2011 earthquake and tsunami that caused a nuclear reactor meltdown, Japan boosted solar investment by 75% in 2012, to $16.3 billion. And Saudi Arabia alone wants to attract $100 billion in investment, with the goal of obtaining a third of its electricity from solar.