China is leading the globe in renewable energy investments as the economy seeks a more sustainable source of growth, according to a recent report by the international accounting firm Ernst & Young.

China reached 42 gigawatts of wind power capacity in 2010, surging 64 percent from the previous year. However, Chinese companies are dealing with falling stocks, inflationary pressures, weak research and development capabilities, and limited grid capacity that may not be able to continue supporting the country's rapid growth in both wind and solar power, said the report.

Globally, however, the toxic legacy of the financial crisis continues to cast a shadow over the world renewable energy market, although new investment in clean energy climbed 30 percent year on year to $243 billion in 2010. Many countries sought to tackle budget deficits by trimming renewable energy incentives. For example, feed-in tariff incentives for solar energy were cut in Spain, Germany and Italy, while France imposed a three-month ban on new projects.

"The global transformation to a resource-efficient and low-carbon economy is a long journey. It is expected to have challenges along the way on local or regional levels," said Gil Forer, Ernst & Young's Global Cleantech Leader. "But the global drivers of this transformation, including imbalance of supply and demand of natural resources, energy security and energy prices, are solid."