In 2009, for the second year in a row, both the United States and Europe added more power capacity from renewable sources such as wind and solar than conventional sources like coal, gas and nuclear.

Renewables accounted for 60 percent of newly installed capacity in Europe and more than 50 percent in the U.S. in 2009, according to twin reports launched by the United Nations Environment Programme (UNEP) and the Renewable Energy Policy Network for the 21st Century (REN21).

The reports detail trends in the global green energy sector, including which sources attracted the greatest attention from investors and governments in different world regions.

Globally, nearly 80 gigawatts (GW) of renewable power capacity was added in 2009, including 31 GW of hydro and 48 GW of non-hydro capacity. This combined renewables figure is now closing in on the 83 GW of fossil-fuel, thermal capacity installed in the same year.

If the trend continues, then 2010 or 2011 could be the first year that new capacity added in low carbon power exceeds that in fossil-fuel stations.

The UNEP report was prepared by London-based Bloomberg New Energy Finance. The REN21 report was produced by a team of authors in collaboration with a global network of research partners.

Global investments in renewables also top

The reports say investment in core clean energy - new renewables, biofuels and energy efficiency -
decreased by 7 percent in 2009, to USD162 billion. Many sub-sectors declined significantly in money invested, including large utility-scale solar power and biofuels.

However, there was record investment in wind power. If spending on solar water heaters, as well as total installation costs for rooftop solar PV, were included, total investment in 2009 actually increased in 2009, bucking the economic trend.

New private and public sector investments in core clean energy leapt 53 percent in China in 2009. China added 37 GW of renewable power capacity, more than any other country.

Investment in renewable energy power capacity (excluding large hydro) in 2009 was comparable to that in fossil-fuel generation, at around USD100 billion each. If the estimated USD39 billion of investment in large hydro is included, then total investment in renewables exceeded that in fossil-fuel generation for the second successive year.

China surpassed the US in 2009 as the country with the greatest investment in clean energy. China's wind farm development was the strongest investment feature of the year by far, although there were other areas of strength worldwide in 2009, notably North Sea offshore wind investment and the financing of power storage and electric vehicle technology companies.

Wind power and solar PV additions reached a record high of 38 GW and 7 GW, respectively. Investment totals in utility-scale solar PV declined relative to 2008, partly a result of large drops in the costs of solar PV. However, this decline was offset by record investment in small-scale (rooftop) solar PV projects.

Pro-renewable policies critical to continuing growth

The reports also show that countries with policies encouraging renewable energy have roughly doubled from 55 in 2005 to more than 100 today - half of them in the developing world - and have played a critically important role in the sector's rapid growth.

"Favorable policies now in place in more than 100 countries have played a critical role in the strength of global renewable energy investments recently," said Mohamed El-Ashry, Chair of REN21.

"For the upward trend of renewable energy growth to continue, policy efforts now need to be taken to the next level and encourage a massive scale up of renewable technologies," he added.

"The relatively resilient performance of the sector during the current economic downturn shows that clean energy was not a bubble created by the late stages of the credit boom, but is instead an investment theme that will remain important for the years ahead," said Michael Liebreich, chief executive of Bloomberg New Energy Finance.

"There remains however a serious gap between the ambition and the science in terms of where the world needs to be in 2020 to avoid dangerous climate change. But what this five years of research underlines is that this gap is not unbridgeable," said UN Under-Secretary-General Achim Steiner, UNEP's Executive Director.

"Indeed, renewable energy is consistently and persistently bucking the trends and can play its part in realizing a low carbon, resource efficient Green Economy if government policy sends ever harder market signals to investors," he concluded.