According to a recent report by Worldwatch Institute, global use of solar and wind energy continued to grow significantly in 2012. Solar power consumption increased by 58 percent, to 93 terrawatt-hours (TWh), and the use of wind power increased by 18 percent, to 521 TWh. Although hydropower remains the world’s leading renewable energy, solar and wind continue to dominate investment in new renewable capacity and are quickly becoming the highest-profile renewable energy sources.

The report found that global solar and wind energy capacities continued to grow even though new investments in these energy sources declined during 2012. Global investment in solar energy in 2012 was $140.4 billion, an 11 percent decline from 2011, and wind investment was down 10 percent, to $80.3 billion. But due to lower costs for both technologies, total installed capacities grew sharply.

Solar photovoltaic (PV) installed capacity grew by 41 percent in 2012, reaching 100 gigawatts (GW). Over the past five years alone, installed PV capacity grew by 900 percent from 10 GW in 2007. The countries with the most installed PV capacity today are Germany (32.4 GW), Italy (16.4 GW), the United States (7.2 GW), and China (7.0 GW).

Europe remains dominant in solar, accounting for 76 percent of global solar power use in 2012. Germany alone accounted for 30 percent of the world’s solar power consumption, and Italy added the third most capacity of any country in 2012 (3.4 GW). Spain added the most concentrating solar thermal power capacity (950 MW) in 2012 as well. However, Italy reached the subsidy cap for its feed-in tariff (FIT) program in June 2013 while Spain recently made a retroactive change in its FIT policies, meaning growth in solar energy will likely slow in these countries in the near future.

Total installed wind capacity edged up in 2012 by 45 GW to a total of 284 GW, an 18.9 percent increase from 2011. In keeping with recent years, the majority of new installed capacity was concentrated in China and the United States, which reached total installed capacities of 75.3 GW and 60 GW, respectively.

The United States was the world’s top wind market in 2012. Overall capacity increased 28 percent as the country added 13.1 GW, double the amount it added in 2011. Increased domestic manufacturing of wind turbine parts, improved technological efficiency, and lower costs helped spur this increase, but the greatest catalyst was the threat of expiration of the federal Production Tax Credit (PTC), that was extended at the end of the year.

“Although policy uncertainties and changes will likely challenge the growth of solar and wind in the future, these technologies are nonetheless well poised to grow,” said Matt Lucky, report co-author and Sustainable Energy Lead Researcher at Worldwatch. “Declining solar technology prices, while challenging for current manufacturers, are helping solar to reach near grid-parity in many markets. With the decreasing cost of operating and maintaining wind farms, wind power is already cost competitive with conventional power energy sources in many markets.”