The clean energy sector—especially the solar industry—has looked a little depressing in the past few years, especially in the bankruptcy-ridden U.S. and China. And yet, the annual Pew clean energy report implores us to stay optimistic. Because while clean energy investments dropped 11% in 2012 compared to the previous year’s levels, the solar industry added 88 GW of generating capacity—a new record.
Pew’s Who’s Winning the Clean Energy Race? report tells us that, as in previous years, China is still winning, with $65.1 billion in investments in 2012 (up 20% from 2011) and 25% of all solar investments worldwide. The country also attracted 37% of wind investments and 47% of renewable investments lumped into the "other" category, which includes biomass, geothermal, and hydro power. All that in spite of the fact that nearly 200 Chinese solar companies merged or went out of business in 2012.
The other top countries in renewable investments shouldn’t come as too much of a surprise:
The U.S. trails at a respectable number two, with $35.6 billion in investments last year. But as Pew points out, this doesn’t tell the whole story:
Investment fell most precipitously in the Americas, with clean energy financing down 31 percent in 2012, to $50.3 billion. The sharp decline followed growth of more than 30 percent in 2011, reinforcing a pattern of investment volatility in the Americas and driving financing in the region to the lowest level since 2009.
The U.S. doesn’t lack in energy innovation, but it is lagging behind in manufacturing and deployment—two things that China has no problem doing.
Investments also fell in Germany, the third top country. Overall, investments dropped 27%—a big number, but not as big as in other EU countries like France and Spain.
As you can see in the image above, Japan is climbing up the rankings—another sign of Asia’s growth in the sector. Part of this is attributable to 2011's Fukushima disaster, which prompted Japan to enact a solar feed-in tariff in order to wean the country off nuclear power. The result: clean energy investments climbed 75% to an impressive $16.3 billion.
If you’re looking for the next big player outside of Asia, keep an eye on South Africa. The country’s clean energy investment grew a mind-boggling 20,500% percent from 2011 (no, that’s not a typo). Last year, the country saw $5.5 billion invested, up from under $30 million the year before.
Realistically, the global clean energy sector doesn’t look poised to break out in the way that advocates would like it to—that is, dreams of a world powered entirely (or even mostly) by clean energy probably won’t come true in the coming decades without some big changes. But the situation isn’t as dire as some news reports would have you think.