Global investments in renewable energy fell by 12pc last year to US$244bn, mainly as a result of lower solar prices and weakened US and EU markets, two new reports released by the UN suggest. Renewable energy investments appear to be shifting to developing countries, however.
Despite the slowdown, 2012 was the second highest year ever for renewable energy investments, which total US$1.3trn since 2006.
Last year also saw a continuing upward trend in developing countries, with such nations spending US$112bn in 2012 in comparison with US$132bn in industrialised nations.
This is a dramatic departure, according to the UN. In 2007, for instance, developed economies invested 2.5 times more in renewables (excluding large hydro) than developing countries. This gap has now closed to 18pc.
Of the 138 countries globally with renewables targets or policies in place, the UN said that two thirds of these nations are in the developing world.
China takes lead
China led the charge by investing US$67bn in renewable energy projects last year.
The UN also cited sharp increases in South Africa, Morocco, Mexico, Chile and Kenya, with the Middle East and Africa showing the highest regional growth of 228pc to reach US$12bn.
In the US, investment was down 34pc to US$36bn in 2012. The UN said this was mainly due to uncertainties over US policy. Meanwhile, investments in Italy and Spain were also impacted by changes in policy.
Germany added 7.6GW of solar capacity in 2012, but its overall investment in renewables dropped by 35pc to US$20bn.
Japan’s investment in renewable energy surged by 73pc to reach US$16bn last year.
Of the renewable energy mix, the total power capacity globally exceeded 1,470GW in 2012 – an 8.5pc leap from 2011 levels.
Wind power accounted for about 39pc of renewable power capacity added in 2012, followed by hydropower and solar PV, which each accounted for approximately 26pc.
Solar PV installations reached a record 30.5GW, while installed wind capacity also hit a new record of 48.4GW, up from 42.1GW in 2011.
In terms of jobs, the UN said that an estimated 5.7m people worldwide worked directly or indirectly in the renewable energy sector in 2012.
"The uptake of renewable energies continues worldwide as countries, companies and communities seize the linkages between low-carbon green economies and a future of energy access and security, sustainable livelihoods and a stabilised climate," said Achim Steiner, the executive director of the United Nations Environment Programme (UNEP), in a statement.
He cited sharp falls in manufacturing costs and in the selling prices of wind turbines and photovoltaic panels as contributing to a "shake-out in the industry" in 2012.
"This is not only normal in a rapidly growing, high-tech industry but is likely to lead to even more competition, with even bigger gains for consumers, the climate and wider sustainability opportunities," said Steiner.
Renewable energy image via Shutterstock