Although Germany is still the leading nation in total grid-connected solar photovoltaic capacity, this news now means Spain has surged into second place there. The report comes as an embarrassment for a floundering Japan, who used to lead the world, but now has fallen to third place in total capacity and forth place in added capacity.

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Spain added 1.7 million kilowatts of capacity in 2008, followed by Germany at 1.5 million kilowatts. The United States lagged behind in a distant third place at 300,000 kilowatts, followed by Japan with only 240,000 kilowatts. The news is disappointing for Japan, but it should be equally as distressing for the United States, which continues to show only slow improvements year to year.

The big difference between the top two countries and the U.S. and Japan appears to be public policy. In Germany and Spain, power companies are required to make long term purchases of renewable energy at uniform prices. Although similar requirements exist in the U.S. and Japan, they are so small that they lead to policy failure, which in turn prompts legislators to be apprehensive when it comes to strengthening those policies.

Nevertheless, Spain has become a shining example of how more ambitious policies can lead to real improvements.

Image Credit: Schwarzerkater on Flickr under a Creative Commons License

The REN21 Renewables 2007 Global Status Report found that last year, wind power capacity increased about 28 percent and solar power capacity went up 52 percent. Renewable energy employs 2.4 million people and 65 countries now have national standards for accelerating the use of renewables. Investors and businesses of all sizes have followed suit. And while that’s impressive, Mohamed El-Ashr, Chair of Ren21, had this interesting comment:

“So much has happened in the renewable energy sector during the past five years that the perceptions of some politicians and energy-sector analysts lag far behind the reality of where the renewables industry is today … This leadership has never been more important, as renewable energy has now reached the top of the international policy agenda under the United Nations and the G8.”

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