Wind farms in China and small-scale solar panels on rooftops in Europe were largely responsible for last year’s 32 per cent rise in green energy investments worldwide according to the latest annual report on renewable energy investment trends issued by the UN Environment Programme (UNEP).

Last year, investors pumped a record $211 billion into renewables — about one-third more than the $160 billion invested in 2009, and a 540 per cent rise since 2004.

For the first time, developing economies overtook developed ones in terms of 'financial new investment' — spending on utility-scale renewable energy projects and provision of equity capital for renewable energy companies.

On this measure, $72 billion was invested in developing countries vs $70 billion in developed economies, which contrasts with 2004, when financial new investments in developing countries were about one quarter of those in developed countries.

The report, Global Trends in Renewable Energy Investment 2011, has been prepared for UNEP by London-based Bloomberg New Energy Finance.

It was launched by UN under-secretary-general and UNEP executive director Achim Steiner and Udo Steffens, president and CEO of the Frankfurt School of Finance & Management, as it was also announced that a new UNEP Collaborating Centre for Climate & Sustainable Energy Finance is being inaugurated at the Frankfurt School.

Emerging world shines

China, with $48.9 billion in financial new investment in renewables (up 28 per cent), was the world leader in 2010. However, other parts of the emerging world also showed strong growth:

South and Central America: up 39 per cent to $13.1 billion; Middle East and Africa: up 104 per cent to $5 billion; India: up 25 per cent to $3.8 billion, and Asian developing countries excluding China and India: up 31 per cent to $4 billion.

Another positive development, highlighted in the report with implications for long-term clean energy developments, was government research and development. That category of investment climbed over 120 per cent to well over $5 billion.

Steiner said: 'The continuing growth in this core segment of the Green Economy is not happening by chance. The combination of government target-setting, policy support and stimulus funds is underpinning the renewable industry’s rise and bringing the much needed transformation of our global energy system within reach.’’

The report points out that not all areas enjoyed positive growth in 2010: there was a decline of 22 per cent to $35.2 billion in new financial investment in large-scale renewable energy in Europe in 2010. But this was more than made up for by a surge in small-scale project installation, predominantly rooftop solar.

Investments in Germany in 'small distributed capacity' rose 132 per cent to $34 billion, in Italy they rose 59 per cent to $5.5 billion, France up 150 per cent to $2.7 billion, and the Czech Republic up 163 per cent to $2.3 billion.

Prices fall

The price of PV modules per megawatt has fallen 60 per cent since mid-2008, making solar power far more competitive in a number of sunny countries.

Throughout the last decade, wind was the most mature renewable energy technology and enjoyed an apparently unassailable lead over its rival power sources.

Wind turbine prices have fallen 18 per cent per megawatt in the last two years, reflecting, as with solar, fierce competition in the supply chain.

In 2010, wind continued to dominate in terms of financial new investment in large scale renewables, with $94.7 billion (up 30 per cent from 2009). However, when investments in small-scale projects are added-in solar is catching up, with $86 billion in 2010, up 52 per cent on the previous year. With $11 billion invested, biomass and waste-to-energy come in third in front of biofuels, which boomed at $20.4 billion in 2006, but fell off dramatically — to $5.5 billion last year.