The year 2015 witnessed the installation of more than 121GW of renewable power plants, a remarkable increase of 30% compared to 2014. With oil and gas prices tumbling down to unprecedented levels, 2016 should be a landmark year for all renewable energy technologies. As per industry trends, solar power is expected to be the fastest-growing renewable power generation technology in 2016, closely followed by wind energy. Among investment hotspots, Asia, Africa and the Middle East will be closely watched this year.

Renewable Energy Trends in 2015

Brushing aside the challenge of dipping oil prices, renewable energy investment worldwide totaled a highest-ever figure of $329 billion, with major investment hotspots being China, Africa, the U.S., Latin America and India. A significant chunk of this, around $199 billion, was in asset finance of industrial-scale clean energy projects, including solar, wind, biomass, geothermal and waste-to-energy. Among notable renewable energy projects in 2015, large offshore wind projects in the North Sea and China stole the limelight. These included the U.K.’s 580MW Race Bank project ($2.9 billion), Germany’s 402MW Veja Mate project ($2.1 billion) and China’s 300MW Longyuan Haian Jiangjiasha project ($850 million). As far as onshore wind is concerned, 1.6GW Nafin Mexico was the largest project, with investment of $2.2 billion.

The global solar PV sector experienced 25% growth last year, with the largest project being the Silver State South project (U.S.) at 294MW and $744 million investment. Morocco created ripples in concentrated solar power (CSP) and the solar thermal segment with the unveiling of its highly ambitious 580MW Noor project at Ouarzazate, costing more than $2 billion. Rooftop and small-scale solar projects saw remarkable progress in Japan, the U.S. and China, with investment totaling $67.4 billion in 2015.

Throughout the year, market investment in clean energy companies was $14.4 billion with top deals being a $750 million secondary share issue by Tesla Motors, a $688 million initial public offering by TerraForm Global and a $500 million VC/PE deal for Chinese electric vehicle company NextEV.

China continues to be the market leader in the global renewable energy sector worldwide, with investment of $110.5 billion last year, followed by the U.S., which invested $56 billion. Amid economic stagnation, Europe saw a big slump in clean energy investment at $58.5 billion, the lowest it’s been since 2006. In 2015, the renewable energy sector got a major boost with the emergence of several small countries, including Mexico ($4.2 billion, up 114%), Chile ($3.5 billion, up 157%), South Africa ($4.5 billion, up 329%) and Morocco ($2 billion, up from almost zero in 2014).

Forecast for 2016

Clean energy is rapidly becoming a part of mainstream investment portfolios all over the world. In 2016, greater attention will be focused on renewable energy, mainly on account of the Paris Framework and attractive tax credits for clean energy investments in several countries, especially the U.S.

In fact, the increasing viability of clean energy is emerging as a game-changer for large-scale investors. The falling prices of renewable power (almost 10% per year for solar), coupled with a slump in crude oil prices, is pulling global investors away from the fossil fuel industry. At the 2016 UN Investor Summit on Climate Risk, former U.S. Vice President Al Gore said: “If this curve continues, then its price is going to fall significantly below the price of electricity from burning any kind of fossil fuel in a few short years.”

There has been an astonishing growth in renewable generation in recent years. “A dozen years ago, the best predictors in the world told us that the solar energy market would grow by 2010 at the incredible rate of 1GW per year,” said Gore. “By the time 2010 came around, they exceeded that by 17 times over. Last year, it was exceeded by 58 times over. This year, it’s on track to be exceeded by 68 times over. That’s an exponential curve.”

As per industry forecasts, China will continue its dominance of the world PV market, followed closely by the U.S. and Japan. In fact, the U.S. is anticipated to overtake Japan as the second largest solar market this year. India, which is developing a highly ambitious solar program, will be a dark horse for cleantech investors. The top solar companies to watch include First Solar, Suntech, Canadian Solar, Trina Solar, Yingli Solar, Sharp Solar and Jinko Solar.

China will continue to lead the global wind energy market in 2016, and is on course to achieve its target of 200GW of installed wind capacity by 2020. Other countries of interest in the wind sector will be Canada, Mexico, Brazil and South Africa. The major wind turbine manufacturers to watch are Siemens, Vestas, Goldwind, Gamesa and FANUC.

Perspectives for MENA

MENA countries have tremendous potential for clean energy on account of their growing populations and abundant solar and wind resources. According to the International Renewable Energy Agency (IRENA), the region is anticipating renewable energy investment of $35 billion per year by 2020.

Jenny Chase of Bloomberg New Energy Finance expects the North Africa and Middle East market to grow rapidly. She said: “Despite the low price of oil [that market is] discovering that solar and wind can be a cost-effective part of their energy supply.” Recently, the MENA region has received some of the lowest renewable-energy prices awarded globally for both photovoltaic (PV) and wind power.

Morocco has swiftly become a role model for the entire of MENA. The government’s target of 2GW of solar and 2GW of wind power by 2020 is progressing smoothly. The current installed wind capacity is 787MW. As for solar, the 160MW Noor-1 CSP is already commissioned, while Noor-2 and Noor-3 are expected to add a combined 350MW in 2017.

As far as the GCC is concerned, the U.A.E. has also shown a serious commitment to develop solar energy. The 100MW Shams CSP plant has been operational since 2014 in Abu Dhabi while 13MW Phase I of Dubai’s solar park was completed in 2013. The business case for green energy proliferation in the GCC is strengthened by plentiful availability of natural energy resources and tumbling solar PV technology costs which are leading to record low renewable power generation costs. The recent auction for the Mohammed Bin Rashid Al Maktoum Solar Park 2 in Dubai yielded prices as low as 5.85 U.S. cents per kWh, which is one of the lowest worldwide.

The rapid growth of global renewable energy sector in the past few years is the strongest signal yet for investors and corporations to take the plunge towards green energy and low-carbon growth. As the UN Chief Ban Ki-moon famously said: “It marks the beginning of the end of growth built solely on fossil fuel consumption. The once unthinkable has now become unstoppable.”

By Salman Zafar, Founder of EcoMENA and CEO of BioEnergy Consult