US loses allure as China, India become more attractive for RE investments, says Ernst & Young

China and India have overtaken the U.S. at the top of the latest EY Renewable Energy Country Attractiveness Index (RECAI), in what comes as the country’s first fall in the ranking of the 40 top countries since 2015.

The reasons behind the downturn are identified in the report as a major shift in U.S. policy under the new administration, which has seen climate change dismissed as a hoax, undone some of the Obama-era environmental regulations, attempted to revive the coal industry and scrutinized the Clean Power Plan.

“Movements in the index illustrate the influence of policy on renewable energy investment and development – both productive and detrimental. Supportive policy and a long-term vision are critical to achieving a clean energy future,” said Ben Warren, EY Global Power & Utilities Corporate Finance Leader, and RECAI Chief Editor.

In the wake of the National Energy Administration (NEA) announcement in January 2017 that it would invest $363 billion in developing renewable power capacity by 2020, which would account for half of all new generating capacity and create 13 million jobs, China secured its No. 1 position in the RECAI ranking.

Furthermore, China plans to launch a pilot tradable green certificate program in July, which is set to reduce government subsidies and provide guarantees that electricity was generated from renewable sources, as it continues to make strides towards its 2020 clean energy targets, including cutting greenhouse gas emissions by 18% per unit of economic growth under the Paris Agreement.

In the RECAI rankings, India came in second, continuing its upward movement. Aiming for 175 GW in renewable energy generation, 100 GW of which is to be solar, by 2022 and 40% of renewable installed capacity by 2040, the country has already installed more than 10 GW of solar capacity in the last three years – starting from a low base of 2.6 GW in 2014.

“The renewable energy industry is beginning to break free of the shackles that have stalled progress in the past. More refined technology, lower costs and advances in battery storage are enabling more widespread investment and adoption of clean energy,” Warren said.

The index welcomed Kazakhstan (37), Panama (38) and the Dominican Republic (39) as newcomers, whose turn to economically viable renewable energy alternatives was prompted by security of supply concerns.