Recently, the research firm BloombergNEF released a report stating that in 2016, global total investment in the clean energy sector reached US$287.5 billion, a year-on-year decrease of 18% compared to 2015. However, despite this overall decline, the total investment in offshore wind power projects in 2016 hit a new historical high, reaching US$29.9 billion—a 40% increase over 2015.

The report analyzes that in 2016, global investment in clean energy cooled down, a trend foreshadowed by weaker data from previous quarters. This slowdown was partly driven by further sharp declines in equipment prices, particularly for photovoltaic systems. Meanwhile, clean energy investment activity in two key global markets—China and Japan—also slowed down. In 2016, China’s total investment in clean energy amounted to $87.8 billion, a 26% drop from the record-high of $119.1 billion in 2015. Japan’s total clean energy investment reached $22.8 billion, representing a 43% year-on-year decline.

Data shows that in 2016, U.S. clean energy investment declined by 7%, reaching only $58.6 billion. The slowdown in investment was largely influenced by the U.S. Congress’s decision in December 2015 to extend the investment tax credit policy. With the favorable policy extension now in place, developers had no reason to accelerate the construction of wind and solar projects. Canada’s total clean energy investment amounted to $2.4 billion, a drop of 46%. Overall, in 2016, the Asia-Pacific region—including India and China—saw total clean energy investment reach $135 billion, down 26% from the 2015 level and accounting for roughly 47% of global investment. Despite this decline, India’s clean energy investment in 2016 remained nearly flat compared to 2015, staying around $9.6 billion, thanks to several large-scale photovoltaic power plant projects currently under development within the country.

Overall, although total global investment in the clean energy sector declined in 2016, new capacity additions did not decrease. In 2016, global photovoltaic capacity surged by 70 GW, up from 56 GW in 2015, reaching a new all-time high. Newly installed wind power capacity reached 56.5 GW; although this figure was down from the 63 GW recorded in 2015, 2016 still remains, aside from 2015, the year with the fastest expansion of global wind power capacity to date.

“In recent years, thanks to the high profit margins from feed-in tariffs for clean energy generation projects, global investment in clean energy has repeatedly reached new highs. However, starting in 2016, China and Japan began to slow down the construction of large-scale power generation projects, shifting their focus instead toward absorbing existing capacity,” said Wu Jing, Head of BloombergNEF’s Asia-Pacific region.

Regarding the reasons for slowing down the construction of large-scale power-generation projects, an industry insider told a reporter from the Securities Daily, “The issue of wind and solar power curtailment has made the market realize that the key to the healthy development of this industry should still be placed on grid infrastructure development and electricity market reform—meaning we shouldn’t blindly pursue installed capacity but rather ensure that the existing renewable energy capacity can fully play its role. Moreover, as the economic viability of ‘self-consumption’-type distributed systems continues to improve, in the future, the growth of the clean-energy sector in China and Japan may increasingly rely not on large-scale ground-mounted power stations and other centralized projects at the power plant level, but rather on rooftop photovoltaic systems on the consumer side.”

The report shows that offshore wind power development was a major highlight in the global clean energy investment sector in 2016. According to the report, global investment in offshore wind power reached an all-time high in 2016, partly due to the advancement of what is described as the “largest-ever” offshore wind project: Denmark’s energy company Dong Energy’s $5.7 billion Hornsea super-large wind farm, with a capacity of 1.2 GW, being built off the coast of the United Kingdom. In addition, more than 100 MW of installed capacity came from another 14 offshore wind projects located in waters off the coasts of the United Kingdom, Germany, Belgium, Denmark, and China. The total investment for these projects ranged from US$391 million to US$3.9 billion.

“At the same time, last year’s record-breaking investment in offshore wind power demonstrates that this technology has already achieved significant improvements in cost-effectiveness and has successfully proven its reliability and performance,” said Jon Moore, CEO of BloombergNEF.

Data shows that, by region, in 2016, total investment in offshore wind power in Europe reached 25.8 billion U.S. dollars, while mainland China saw approximately 4.1 billion U.S. dollars. In addition, new offshore wind markets are also emerging in regions such as North America and Taiwan, China.