China has succeeded the U.S. as the most attractive location in which to invest in renewable energy projects, according to Ernst & Young's latest renewable energy country attractiveness indices.
The U.S. dropped two points in the indices, falling behind China, after a federal renewable energy standard was not enacted this summer. Construction of new renewable energy facilities is expected to further slow down following the December expiration of an important deadline in the Treasury grant program with no assurance of renewal, generating investor uncertainty about the continuation of an effective incentive mechanism, according to the report.
‘China's steady rise to pole position has been underpinned by strong and consistent government support for renewable energy,’ says Ben Warren, Ernst & Young's environment and energy infrastructure advisory leader. ‘Although the United States remains a highly attractive location for investors in renewable energy, it is clear that recent events have eased momentum. The U.S. market continues to have significant potential but requires consistent legislative support to provide investors with the long-term confidence they need.’
Other markets, most notably Spain, are also showing signs of wavering support largely due to tariff deficits and the underlying affordability of support mechanisms. This may remain a feature for some time, and it points to the need for governments to continue to make the case for renewable energy and how it can add value to their economies, the report says.
SOURCE: Ernst & Young