The highlight of the past week for the clean energy sector was the State-of-the-Union address by Barack Obama. The US President announced a target of generating 80% of the country’s energy from “clean” sources by 2035, setting up quite a task for the world’s largest economy.

“Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all,” Obama said without giving details on how the target will be apportioned between different technologies, or what investment it would involve, or where the funding would come from.

He also set a target of having 1m electric vehicles on US roads by 2015, while committing to direct investment and incentives for research in clean energy. This would partly be paid for by ending tax subsidies of about USD 4bn a year given to oil companies. “So instead of subsidising yesterday’s energy, let’s invest in tomorrow’s,” Obama said in what is being seen as one of his strongest endorsements of clean energy. The administration’s budget, to be released in mid-February, will seek USD 8bn for clean-energy programmes, which is a one-third increase in funding for such projects.

Across the Atlantic, the European Commission also asked member countries “rapidly” to double annual capital investment in clean energy to EUR 70bn, to reach the 20% renewable energy target by 2020. However boosting production of renewables is undermining the region’s competitiveness as it is leading to higher electricity prices, according to the Czech minister for industry and trade.

The week also saw a spate of announcements cutting feed-in-tariffs for solar power projects, to reflect lower costs. Taiwan slashed the tariffs for 2011 by about 30%. Spain’s lower house of Parliament approved the decree lowering solar tariffs. There were reports that Japan may cut the rate that utilities pay for surplus solar power supplied by households by 12.5%. A panel of experts that advises German Chancellor Angela Merkel said that solar power subsidies should be cut and capped once capacity-add exceeds 1GW nationally in a year. And it looks like Italy is likely to reach its 2020 targeted capacity of 8GW this year itself.

In Australia, the government said it would cut or delay some USD 500m of funding for solar power and carbon capture products to release funds for floods-related reconstruction.

China decided to tighten the solar supply chain by mandating minimum size, and efficiencies, for polysilicon factories, a move that is likely to spur consolidation. Factories must have the capacity to produce more than 3,000 tonnes of polysilicon a year to continue to operate after 2011.

Interestingly, falling costs of photovoltaic technology means that it is a more economically attractive option than oil-fired electricity generation in the oil-rich Gulf region, according to Bloomberg New Energy Finance. A White Paper published in January says that the states of the Gulf Cooperation Council should be replacing oil-fired electricity generation with large-scale PV, while reserving their oil for sale on international markets.

In the wind sector, the positive news came from offshore. France announced it would invite bids to build 3GW of offshore capacity in the second quarter. This would involve an investment of over USD 13bn. It plans to have 6GW of offshore wind energy by 2020. According to the European Wind Energy Association, offshore wind installations surged 51% in Europe in 2010, though new onshore wind installations dropped by 14%.

Correction: In last week’s Week in Review, we said that the sale of some used carbon credits by Hungary was illegal. In fact, the actual sale was legal. It would have been illegal for someone to try to use the credits for compliance in the EU ETS.