Jun 13 2013
Renewable Energy: World Invests $244 billion in 2012, Geographic Shift to Developing Countries. Installed capacity continues to grow as solar prices drop 30-40%, new wind installations surge
For only the second time since 2006, global investments in renewable energy in 2012 failed to top the year before, falling 12% mainly due to dramatically lower solar prices and weakened US and EU markets.
There was a continuing upward trend in developing countries in 2012, with investments in the South topping $112 billion vs $132 billion in developed countries - a dramatic change from 2007, when developed economies invested 2.5 times more in renewables (excluding large hydro) than developing countries, a gap that has closed to just 18%.
The main issue holding back investment last year was instability in the policy regime for renewable energy in important developed-economy markets. Future investment is likely to coalesce in countries that can offer policies that command investor confidence, plus the need for extra generating capacity and strong renewable power resources.
After being neck-and-neck with the US in 2011, China was the dominant country in 2012 for investment in renewable energy, its commitments rising 22% to $67 billion, thanks to a jump in solar investment. But there were also sharp increases in investment for several other emerging economies, including South Africa, Morocco, Mexico, Chile and Kenya.
The other major theme of 2012 was a further, significant reduction in the costs of solar photovoltaic technology. The levelised cost of generating a MWh of electricity from PV was around one third lower last year than the 2011 average. This took small-scale residential PV power, in particular, much closer to competitiveness.