Renewable energy expansion will slow down in the next five years as a result of policy uncertainty, according to the International Energy Agency (IEA).
It warns of growing risks to deployment unless governments put more stable policies in place for green growth.
The IEA’s new report suggests power generation from renewable energy sources including solar, wind and hydro grew strongly in 2013, reaching almost 22% of global production.
However, despite predicting renewable output to increase by 45% and making up nearly 26% of global electricity generation by 2020, it expects annual growth to slow after 2014.
The IEA also predicts a decline in investment, forecasting spending in renewable energy to average around $230 billion (£139bn) annually compared to $250 billion (£150bn) of investment last year.
Maria van der Hoeven, IEA Executive Director said: “Renewables are a necessary part of energy security. However, just when they are becoming a cost-competitive option in an increasing number of cases, policy and regulatory uncertainty is rising in some key markets.”
She added: “Many renewables no longer need high incentive levels. Rather, given their capital-intensive nature, renewables require a market context that assures a reasonable and predictable return for investors. This calls for a serious reflection on market design needed to achieve a more sustainable world energy mix.”