ABU DHABI, 22nd December, 2016 (WAM)– Green energy generation has reached a tipping point, the World Economic Forum, WEF, asserted in an investors handbook it released on Thursday, and called investors to shift towards more green energy investments, as investments remain below what is needed to reach the Paris Accord targets, despite the tipping point.

The cost of generating energy through solar and wind sources has dropped to the point of being competitive against coal and natural gas, a paradigm shift which should attract investors worldwide to the renewables sector, according to one of the findings of the “Renewable Infrastructure Investment Handbook: A Guide for Institutional Investors”.

The handbook analysed data from Open Energy Information, Bloomberg New Energy Finance, S&P Indices and UNEP and other sources on the efficiency and returns of renewable energy investments, and looked at the evolution of both global investments in renewable and the specific cases of some institutions investors.

“Renewable energy has reached a tipping point – it now constitutes the best chance to reverse global warming,” said Michael Drexler, Head of Long Term Investing, Infrastructure and Development at the World Economic Forum, in a statement on the website of the Geneva-based WEF.

“Solar and wind have just become very competitive, and costs continue to fall. It is not only a commercially viable option, but an outright compelling investment opportunity with long-term, stable, inflation-protected returns,” he added.

The cost of generating electricity from renewable sources is now on par or below that of coal and natural gas, the handbook finds. Just 10 years ago, solar costs would be around $600/MWh (megawatt hour) much above the widely-used coal and natural gas sources at $100/MWh. However, solar costs were halved five years later, and compressed again to around US$100/MWh today, while wind costs are around $50/MWh.

This tipping point was made possible in great part because of the gains in efficiency achieved, the handbook explains.

Solar panel efficiency has jumped from 15 per cent to 22 per cent , research cells have reached 46 per cent, while wind turbine efficiency grew from 25 per cent to 50 per cent.

Combined with economies of scale, solar panel costs compressed 80 per cent since 2009, while wind turbine costs dropped 30 per cent in 3 years The results of this turning point are already clear in the market, the handbook shows.

Investments in renewable energy capacity in 2015 have for the first time surpassed those in conventional sources. Investments in renewables in 2015 were $285.9 billion, a 5 per cent increase from $273 billion the year before, according the United Nations Environmental Programme, UNEP, and representing 53.6 per cent of total added capacity worldwide in 2015, according to Bloomberg New Energy Finance.

Investments in renewable energy happen all over the world, with Asia taking the lead. In earlier years, investments surged globally, with two thirds of investments happening in EMEA and the Americas.

The growth in the last few years, however, comes mainly from Asia-Pacific, including major countries such as China, which now counts for over half of clean energy investments.