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Cleantech arms race: China, Germany, Italy rise in 2010; U.S., U.K. fall

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The U.S. and U.K. are falling behind China, Germany, Italy and India in cleantech investment. Here's a look at global financing in 2010, according to Pew research.

When it comes to financing cleantech, the U.S. is losing its grip in the race to beat China, Germany, Italy and India.

Global investment in clean energy grew by 30 percent in 2010 to $243 billion, according to new research by The Pew Charitable Trusts, but the U.S. slipped to third place behind China and Germany in the race for green technology.

According to the report, China, Germany, Italy and India were among the nations that most successfully attracted private investments.

The top spot is without question held by China -- "the world's clean energy powerhouse," the authors write -- with a record $54.4 billion in investments in 2010, a 39 percent increase from 2009.

Germany came in second place in the G-20, swapping spots with the U.S. from last year, thanks to a 100 percent increase in investment, to $41.2 billion.

The U.S. used to inhabit the top spot until 2008, when China supplanted it; in 2010, it fell another rung to third, with $34 billion.

In the grand scope of things, Americans have nothing to worry about -- not like their cousins across the Atlantic, at least. The United Kingdom experienced the largest decline among G-20 nations, falling from fifth to 13th, thanks to "uncertainty surrounding clean energy policies" that lead investors to look elsewhere for returns.

The dark horse in the race in 2010 was Italy. The nation managed to attract $13.9 billion in clean energy financing last year, moving its global standing from eighth to fourth. Most notably, Italy is the first country in the world to achieve grid parity for solar energy, where the cost of the renewable source is competitive with fossil fuel sources.

Finally, India joined the top 10 ranking for the first time, attracting $4 billion in investment, a 25 percent increase.

SOLAR GAINS ON WIND IN RENEWABLE RACE

Wind power remains the dominant renewable energy source for investors, with $95 billion in 2010.

But solar is picking up steam. (No pun intended, concentrated solar fans.) The renewable experienced significant growth in 2010, with a 53 percent increase in investment to a record $79 billion. That's more than 17 gigawatts of new generating capacity across the world.

(Tellingly, Germany accounted for 45 percent of the world's solar investments. Sunny, sunny Germany.)

A regional look:

  • Europe remains the region with the most investment, attracting $94.4 billion. (Germany, $41.2 billion; Italy, $13.9 billion.)
  • The Asia/Oceania region continues its growth, attracting $82.8 billion. (China leads.)
  • The Americas saw investment grow 35 percent in 2010, but "remain a distant third" with $65.8 billion.

A few more stats:

  • Small-scale, residential solar investment grew by 100 percent to $56.4 billion in the G-20. (Germany leads; followed by Japan, France, Italy, U.S.)
  • Installed generating capacity for renewables increased to 388 gigawatts. (Includes wind, small-hydro, biomass, solar, geothermal and marine/tidal). China accounts for a quarter of the global total.
  • Global investment totaled $198 billion in 2010, excluding $35 billion for R&D.
  • Venture capital investments in clean energy increased 26 percent to $8.1 billion in 2010. (The U.S. led with $6 billion.)

If you're interested in deep dives by sector or country, you can read the entire report here (.pdf), which is chock full of data.

Perhaps the most interesting insight for the U.S.: despite leading in VC investment, America lags the world in cleantech manufacturing. Sounds like it's time to get production lines back online.

Bloomberg New Energy Finance partnered with Pew on the study.

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Andrew Nusca

Editor Emeritus

Andrew Nusca is editor of SmartPlanet and an associate editor for ZDNet. Previously, he worked at Money, Men's Vogue and Popular Mechanics magazines. He holds degrees from the Columbia University Graduate School of Journalism and New York University. He is based in New York but resides in Philadelphia. Follow him on Twitter. Disclosure