“Clean energy is here to stay,” Cuttino said. “It’s a quarter-of-a-trillion-dollar industry, despite all of the many challenges it had.”

For the United States — again the world’s second-largest clean energy investor after China — the decline came about largely due to the federal production tax credit, which expired at the end of 2013. While wind investment fell 1 percent in 2013 globally, installations fell a whopping 21.6 gigawatts. The United States accounted for the vast majority of that drop, the report notes.

“Wind is really, I think, the story of 2013,” Cuttino said. She noted that while the United States leads in energy efficiency technology, biofuels and a few other areas, deployment of wind “cratered” when the tax credit ended. Just a year earlier, the United States saw more than 13 GW of wind installed, while less than 1 GW was installed in 2013.

“It’s pretty shocking,” she said. “If there was any question about the impact of policy … all you have to do is look at that.

Earlier this week, Sens. Ron Wyden (D-Ore.) and Orrin Hatch (R-Utah) proposed to extend a wide range of temporary tax incentives for two years, but the production tax credit (PTC) — which gives a 2.3-cent-per-kilowatt-hour subsidy to wind farms for the amount of renewable electricity produced — was not included.

Advocates said they expect it to be added into the package as it moves through the Senate this week, though it faces an uphill battle against conservative opponents. The tax “extenders” bill will be marked up today in the Senate Finance Committee and then would have to face stiff opposition in the House.

Wind drops; solar sector’s growth continues

Opponents of the PTC argue that the tax break will cost more than $7 billion, paid for in part by more than two dozen states that don’t receive wind subsidies. Some analysts maintain that it distorts the electricity markets and props up an industry that should by now be standing on its own feet.

Ethan Zindler of Bloomberg New Energy Finance, which co-produced the clean energy report, ascribed some of the drastic drop in U.S. wind deployment last year to developers “trying to beat the clock” on the PTC. “So that created some strange patterns,” he said. But he also noted that the solar sector continued to grow in the United States, attracting $17.7 billion and adding a record 4.4 GW — a nearly 30 percent increase over the previous year.

That still wasn’t as good as China, though. Still the leading clean energy investor in the world, China attracted $54.2 billion in investment. Solar deployment there grew almost fourfold in 2013 to 12.1 GW.

“Germany never did that in any other year,” Cuttino said. “That’s a lot of solar in one year.” China’s previous record had been 3.2 GW of solar deployment in 2012.

Zindler said overall, the investment climate for renewable energy is in what he called a “challenging period” that’s shifting fast.

“In my view, we’re in an interesting transitional period whereby the industry traditionally was driven, to a large degree, by where the most supportive subsidies are. Actually, what’s starting to change is that the technologies are starting to become cost-competitive without subsidies,” Zindler said.

But, he added, “That doesn’t happen all at once at the same time everywhere. It’s a little bit of a challenging period as the traditional markets are seeing subsidies withdrawn or pulled back or removed entirely. On [the] other hand, you have situations where literally it is making more sense for someone to install clean energy than fossil generation purely on the merits of the economics.”