A total of 4,995 MW of offshore wind capacity is currently producing electricity in Europe's waters, but EU countries had planned to have 5,829 MW of capacity installed by the end of 2012, data published by the European Wind Energy Association (EWEA) shows.
The EU wants to generate 20% of its energy consumption from renewable sources by 2020 in a bid to cut climate-harming emissions and its member states must estimate yearly targets outlining how they will help meet the overall goal.
A comparison against the countries' 2012 targets for offshore wind showed France and Germany lagging far behind their goals.
France had not installed a single turbine by the end of last year despite a target of 667 MW, while Germany counted 280 MW against a goal of 792 MW.
France only launched its first tenders for offshore wind sites last year while in Germany, investors were scared off by liability questions over delays in connecting offshore wind farms to the grid.
Despite the slow progress, Europe installed a record-breaking 1,166 MW in offshore wind capacity last year, a figure representing €4 billion of investment, and an increase by a third on the 2011 figure.
"Solid installation figures do not alter the fact that the wind industry is being hit by political and regulatory instability, the economic crisis, the higher cost of capital and austerity," said Justin Wilkes, policy director at the EWEA.
Britain rules the waves?
Britain remained at the forefront of new and total installations, with around 73% of new turbines in 2012, and nearly 60% of total turbines placed in British waters.
British green energy association RenewableUK said the country's offshore wind farms produced enough power to supply 1.9 million homes.
The European offshore wind market also remained dominated by two manufacturers: Germany's Siemens and Denmark's Vestas, who together made 86% of Europe's installed offshore wind turbines.
No turbines from the Danish manufacturer were installed last year. Vestas’ share price is around 40% below last year's, as it struggles to compete in an oversupplied market, while Siemens' products were used in 860.4 MW of new capacity, EWEA data showed.
Even so, the EWEA predicted an active year in 2013, with 14 offshore projects under construction in the next two years that are expected to increase installed capacity by 3,300MW.
"Europe is a world leader in offshore wind energy and could be creating even more jobs if governments gave greater policy certainty to investors, and resolved grid connection problems," Wilkes said.