China replaces the US as the most attractive place for renewables investors

The US has fallen to third place in the latest edition of the EY Renewable energy country attractiveness index (RECAI), following US energy policy changes implemented by the Trump administration. The fall means that China and India have surpassed the country to score the highest in EY’s metrics and move to the top of the RECAI table.

A shift in policy and the review of the US Clean Power Plan were responsible for the country’s drop – meaning it has moved from the top position for the first time since 2015. The drop also reflects the US government’s executive orders to roll back the Obama administration’s climate change policies and revive the US coal industry, says EY. 

Meanwhile in the US, President Trump has also signed an executive order that calls for a review of the Obama administration’s offshore drilling plan, seeking to undo the indefinite ban on drilling for oil offshore. Trump was also trying to scrap a rule limiting upstream methane emissions in oil and gas production, but this was ultimately rejected by the US Senate.

The US’ move to third place means that China is now top of the 40-strong RECAI index. Its National Energy Administration (NEA) announced in January this year that it will spend $363bn on renewable power capacity by 2020, leading to renewables accounting for half of all new Chinese generating capacity and the creation of 13mn jobs. The country also plans to pilot a tradable green certificate programme in July this year to prove that Chinese consumers are purchasing renewable energy.

India moved from third to second position. The Indian government has a programme to build 175 GW renewable energy capacity by 2022, and for renewables to account for 40% of installed power capacity by 2040. India has installed over 10 GW of solar capacity in the last three years – starting from a 2.6 GW in 2014.

May’s edition of RECAI sees new entrants in the form of Kazakhstan (position 37), Panama (38) and the Dominican Republic (39). 

Elsewhere, analysis from market research company Frost & Sullivan indicates that global investment in solar power technologies in 2017 will be higher than coal, gas and nuclear investment combined. The firm says that lower project costs and continued policy support will see global renewable power investment reach $243bn in 2017. Of this, solar PV will see $142bn in investment.

By 2020 the firm, in its Global Industry Power Outlook 2017, estimates that non-hydro renewables will account for 65% of global power investment. The company also tips India as the leading growth market, with it predicting renewable investment increasing by 24% per year to 2020.