Worldwide investments in renewable energy projects rose by 17 per cent in 2014 thanks to a boom in solar in Asia and offshore wind in Europe.
Total spending reached $270-billion (U.S.) last year, up from $232-billion in 2013, according to a report released Tuesday by the United Nations Environment Program. That reverses a two-year decline.
The increase was driven by a big expansion of the solar industry in China and Japan, and continuing investments in offshore wind projects in Europe, the UNEP report said.
Because of the increased investment, renewable technologies such as wind, solar, biomass, geothermal, small hydro and marine power generated about 9.1 per cent of electricity production around the world at the end of last year, the report said, up from 8.5 per cent in 2013.
The UNEP renewable figures do not include investments in large-scale hydroelectric projects.
"These climate-friendly energy technologies are now an indispensable component of the global energy mix," UNEP executive director Achim Steiner said in a statement. "Their importance will only increase as markets mature, technology prices continue to fall and the need to rein in carbon emissions becomes ever more urgent."
Indeed, falling prices for renewable energy technologies was the major factor in the drop in the investment numbers in 2012 and 2013.
Over all, the biggest renewable energy investments last year took place in China, where $83.3-billion was spent. That's a 39-per-cent rise from 2013. The second biggest player was the United States, where $36.3-billion was invested, up 7 per cent from 2013. Japan was third followed by Britain, Germany and Canada, where new investments totalled $8-billion, up 31 per cent.
About $4.5-billion was invested in wind projects in Canada last year, and another $2.8-billion in solar, the report said.
The report's authors noted that the decline in the cost of renewable energy technology means that a dollar invested now buys far more generating capacity than it would have a few years ago. So the large increase in investment means an even higher boost to capacity.
Solar and wind are by far the biggest sub-sectors of the renewable energy business globally. They make up 92 per cent of the investment total.
Around the world, the wind industry rose 11 per cent to draw investments of $99.5-billion last year, while solar grew 25 per cent to $149.6-billion.
The slump in oil prices may dampen renewable energy investment somewhat in 2015, although the report noted that little electricity is generated by oil – except in some developing markets – and thus it doesn't compete directly with the sector.
Still, renewables face other challenges, including transmission issues, the intermittency of solar and wind power production, and a reduction in government support in some countries.