With austerity coming to Europe, the renewable energy sector has floundered over the last few years. Strict budget cuts in nations like Spain, has caused a variety of feed-in tariffs and subsidies to fall by the wayside. Both Germany and Italy, which represent the two biggest solar markets on the continent, have recently put in place plans to reduce these critical production incentives in order to reduce the burden on consumers. Similar plans have begun to spring up all across the European Union (EU) as soaring public debts need to be addressed.

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However, while the Old World has been pushing alternative energy sources towards the back burner, Asia continues to be the driver in the sector. Faced with exponentially rising energy demand, the region has embraced renewables with fervor. For investors in the sector, placing their bets on the continent makes sense.

Explosive Growth
Confronted with reduced government incentives, lack of capital and increased competition, renewable energy adoption in the developed west has hit a wall. However, on the other side of the globe, the green energy sector is booming. Faster growing populations in Asia are assuring higher energy demand. To that end, many governments across the region have begun the task on including both solar and wind into their power generation plans.

Already, China has invested nearly $50 billion annually into its renewables market since 2009. The Asian Dragon is expected to add nearly 5 Gigawatts (GW) worth of solar capacity this year, with a new annual capacity rising to 10GW by 2016. Likewise, China has doubled its wind capacity, both onshore and off, year over year. Not to be outdone, fellow BRIC superstar India has unveiled aggressive plans within the renewables sector. In 2011, the nation spent more than $10 billion on clean energy investment, rising 52% from the numbers in 2010. However, that could be a drop in the bucket compared to its potential. India has plans to install 20GW of solar capacity by 2022 as well as add 4,000 Megawatts (MW) of wind generation annually over the next five years.

However, it's not just the two emerging market staples that are experiencing high renewable growth. Nations such as Malaysia, Cambodia and Indonesia have also embraced the sector, by adding new solar, wind and hydroelectric capacity to their respective energy mixes. Even Japan has continued to add solar capacity to its grid as it has been trying to move away from nuclear power in the wake of the Fukushima disaster.

SEE: Clean Or Green Technology Investing

Playing the Shift
Given Asia's continued adoption of renewable energy, investors may want to focus on the region. Funds like the PowerShares Global Clean Energy (ARCA:PBD) or First Trust Global Wind Energy (ARCA:FAN) can be used to provide broad-access to the renewables theme. However, the bulk of Asia's green dominance is being capitalized by Asian firms. These represent the best bets in the sector. Here a few picks.

As solar photovoltaic prices have plummeted over the last year, so have shares of the producers. That includes many of the Chinese firms responsible for the lower prices. As one of the largest module manufacturers in China, Trina Solar (NYSE:TSL) provides some of the most efficient panels based on cost per kilowatt. The bulk of its business has traditionally stemmed from Europe, but new demand from India as well as its homeland has helped see increased demand for its products. With shares now in the single digits, Trina could now be a deep value play. Equally as compelling are Yingli Green Energy (NYSE:YGE) and ReneSola (NYSE:SOL) as they have seen their prices fall by the wayside.

Perhaps some of the deepest values in Asia's renewables sector can be found in Japan. The bulk of the nation's high tech exports are bound for China and the rest of emerging Asia. That includes various clean energy products like solar panels and energy efficiency equipment. Kyocera (NYSE:KYO) recently unveiled proposals for a new 70MW solar farm in Japan as well as further investments in utility scale solar plants. This follows Panasonic's (NYSE:PC) recent moves into utility scale solar. Finally, Mitsubishi Heavy Industries (OTCBB:MHVYF) remains one of the leading wind turbine manufacturers on the island nation.

SEE: Top 10 Green Industries

The Bottom Line
With tariffs and subsidies for renewable energy ending in Europe, Asia is picking up the slack. Faced with a growing demand for energy, governments across the region are adding green solutions to their grids at a fast pace. For investors, focusing portfolios towards the continent could produce some green as well. The preceding picks along with Suntech Power (NYSE:STP) make ideal selections to play Asia's continued dominance and adoption of renewable energy.

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At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.

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