China retook its top spot as global leader in the clean energy race, attracting nearly twice the green energy investment dollars last year as the United States did.
Investors plowed $65 billion into Chinese wind farms, solar panel arrays and other clean energy projects in 2012, a 20% increase over the year prior, according to a report released Wednesday by Pew Charitable Trusts and Bloomberg New Energy Finance. The numbers reflect only private investments in power projects, and do not include government subsidies or R&D money.
China's total made it the world's top destination for green energy investments in 2012, a position it held in 2009 and 2010 but lost to the United States in 2011.
In the United States, green energy investments last year plummeted 37% to $35.6 billion, although the country still came in second worldwide.
Analysts attribute China's success to its stable, long-term incentives, such as its target goal to get 20% of its energy from renewable sources by 2030. China's clean-energy push is spurred partly by its mounting pollution problems.
While some U.S. states have set their own targets, there is no federal policy on the matter. The federal approach mainly consists of a variety of tax breaks that depend on being renewed every few years.
"When a country has a strong target and a consistent policy, investors will go invest," said Phyllis Cuttino, director of the clean energy program at Pew.
Worldwide, private investments in clean energy totaled $269 billion, down 11% from the year earlier. Cuttino said the declines reflected expiring subsidies and incentives in a number of key markets, including the United States and Europe, amid ongoing fiscal pressure.
Even though investment declined, the amount of renewable energy that can be generated grew 16%. The report credited falling prices for things like solar panels -- which have dropped 75% over the last three years -- with the increase in output.
At $126 billion, solar attracted the most investment cash among all the clean energy technologies surveyed by the report, even though it generated only about a third as much power as wind.
The size of that investment highlights investors' enthusiasm for the technology. While falling solar panel prices have been painful for panel makers, they've been a boon to companies and investors developing solar power projects.