We may have spent 23 per cent less globally on renewables in 2016, but falling prices mean more capacity was installed than ever before, according to the latest figures from the UN.

Global investment in renewables was US$241.6 billion in 2016, the lowest level since 2013, according to Global Trends in Renewable Energy Investment 2017, published by UN Environment, the Frankfurt School-UNEP Collaborating Centre and Bloomberg New Energy Finance.

But this figure added 138.5 gigawatts to global power capacity – a new record in renewables, and up eight per cent on the previous year.

The report said falling prices were a key reason for a reduction in expenditure, with the average dollar capital expenditure per megawatt for solar photovoltaics and wind dropping by more than 10 per cent.

For example, solar expenditure was $113.7 billion, down 34 per cent from the record expenditure in 2015. But capacity was a record 75 gigawatts.

“Ever-cheaper clean tech provides a real opportunity for investors to get more for less,” executive director of UN Environment Erik Solheim said. ”This is exactly the kind of situation, where the needs of profit and people meet, that will drive the shift to a better world for all.”

However, the other factor for the decrease in spending isn’t such a great news story, with a decrease in financing in China, Japan and emerging markets. Wind energy also saw both falls in expenditure and capacity.

But the investment market is still favouring renewables, with double the money flowing towards them than is entering the fossil fuel sector, the report found – providing 55 per cent of all new power.

“The investor hunger for existing wind and solar farms is a strong signal for the world to move to renewables,” Frankfurt School of Finance & Management president Dr Udo Steffens said.

A hopeful sign there will be an uptick in financing activities were record low bids for renewables auctions last year, with a tariff of $29.10 a megawatt-hour set for solar in Chile, and $30 a MWh for onshore wind in Morocco. The report said these prices would have been “inconceivably low” only a few years ago.

Chairman of the advisory board at BNEF Michael Liebreich said the conversation had now moved on from asking when renewables would be “grid competitive”.

“After the dramatic cost reductions of the past few years, unsubsidised wind and solar can provide the lowest cost new electrical power in an increasing number of countries, even in the developing world – sometimes by a factor of two,” he said.

Strangely in the Australian context, it was the Adani Group that was called out in the foreword for taking advantage of the falling costs for renewables.

“[Adani] has completed a massive solar plant in India, where generating energy from renewables now costs almost the same as traditional methods,” the foreword states. “The plant in Tamil Nadu covers 10 square kilometres and can power 150,000 homes. As well as making money, this will help India meet its commitment to the Paris Agreement, by generating 40 per cent of its electricity from non-fossil-fuel sources by 2030.”

Globally renewables now account for 11.3 per cent of all power produced, excluding hydro.