Global new investment in renewable power and fuels was USD244 billion in 2012, down 12% from the previous year’s record. The total was still the second highest ever and 8% above the 2010 level. If the unreported investments in hydropower projects larger than 50 MW and in solar hot water collectors are included, total new investment in renewable energy exceeded USD 285 billion. The decline in investment — after several years of growth — resulted from uncertainty about support policies in major developed economies, especially in Europe (down 36%) and the United States (down 35%). Nonetheless, considering only net additions to electric generating capacity (excluding replacement plants) in 2012, global investment in renewable power was ahead of fossil fuels for the third consecutive year.
The year 2012 saw the most dramatic shift yet in the balance of investment activity between developed and developing economies. Outlays in developing countries reached USD 112 billion, representing 46% of the world total; this was up from 34% in 2011, and continued an unbroken eight-year growth trend. By contrast, investment in developed economies fell 29% to USD 132 billion, the lowest level since 2009. The shift was driven by reductions in subsidies for solar and wind project development in Europe and the United States; increased investor interest in emerging markets with rising power demand and attractive renewable energy resources; and falling technology costs of wind and solar PV. Europe and China accounted for 60% of global investment in 2012. Solar power was the leading sector by far in terms of money committed in 2012, receiving 57% of total new investment in renewable energy (96% of which went to solar PV). Even so, the USD 140.4 billion for solar was down 11% from 2011 levels, due to a slump in financing of CSP projects in Spain and the United States, as well as to sharply lower PV system prices. Solar was followed by wind power (USD 80.3 billion) and hydropower projects larger than 50 MW (estimated at USD 33 billion).