China tops again EY’s renewables index, US regains positions

China has maintained its leadership position in Ernst & Young’s (EY) latest Renewable energy country attractiveness index (RECAI), while the US overtook India’s second place in the ranking.

The US climbed to the second spot in the 40-strong ranking, taking the place of India, where a looming threat of a 70% tariff on solar panel imports and lower power bids have spurred investor concerns regarding its “over-ambitious” 2022 solar power goals. The US, meanwhile, was aided to regain its positions in spite of rising protectionism in the renewable energy sector. The country benefits from the absorption of solar tariffs and the recently passed US tax reform bill that does not include subsidy cuts to wind projects, EY said.

China was at the helm of the green energy index for the third time in a row. The third position was secured by Germany, with India dropping to the fourth place. The other country in the top five was Australia.

Movements in the index illustrate that the rising interest rates and reduced government subsidies for clean power are “just headwinds as the renewable energy sector continues to mature and markets expand,” commented RECAI chief editor Ben Warren. “While the current economic climate has driven a relentless focus on costs, that focus is paying dividends with the global cost of electricity from renewable sources falling year-on-year. Combined with the plunging cost of battery technology, we anticipate further rapid growth of the evolving renewable energy sector in the coming years,” he added.

Most notable upward movements in the ranking include the UK’s positioning on the seventh spot and the Netherlands, which climbed to the ninth place. EY said that the UK’s bounce by three places was witnessed as the market adapted to the zero-subsidy mechanism in the solar sector and the country stepped up development of onshore wind projects for merchant generation. Netherlands, on the other hand, moved up from the 15th place, thanks to the expansion of its solar market and the subsidy-free offshore wind sector.

Apart from India, markets that moved down in the index include: Japan, which saw over 80 solar company bankruptcies in the past year due to steep cuts in feed-in tariff (FiT) rates and intense competition; Chile; Mexico; and Argentina. Canada was also among the fallers as wind power capacity additions last year dropped to 340 MW from 702 MW in 2016.

There were four new entrants — Taiwan, Poland, Norway and Indonesia.

The full EY ranking is available at:$FILE/ey-recai-51-pp-10-11-index-dps-27-april.pdf