US Reaches India In Renewables

The US has reached India in EY’s latest Renewable energy country attractiveness index (RECAI), notwithstanding the US pressure of a 30% tariff on imports of cells and modules earlier this year.

The American market resiliently rose from third to second place in the index, since the solar tariffs are often absorbed and wind projects are not subject to subsidy reductions under the recently passed US tax reform bill, said EY.

India’s attractiveness has itself been thwarted by the looming threat of Safeguard Duties on imports, which could be placed as high as a recommended 70%. Investors are also treated by low prices in Indian procurement. This also helped Germany overtake India to reach third place in EY’s RECAI.

Third Time Now

For the third time in a row, China topped the index. Other significant changes included the UK and the Netherlands climbing to seventh and ninth sequentially, while Taiwan has re-entered the top 40 ranking. Despite a significant fall in renewables financing in 2017, the UK saw its market adapting to subsidy-free solar PV, onshore wind projects and progresses to repower old wind farms, while the Netherlands had current offers for unsubsidized offshore wind and has a developing solar PV market.

EY also noted the rising course of oil and gas companies making significant expenditures in low-carbon energy, but added: “the pace of transition among oil majors remains uncertain.”

The statement further highlighted a trend of rising protectionism in the renewable energy industry, citing the US and India as key cases.

Ben Warren, EY Global Power & Utilities corporate finance leader and RECAI chief director, said: “Rising interest rates are likely to increase the cost of cheap capital that has underwritten the dramatic roll-out of renewable energy capacity over recent years. Government subsidies for clean power are being reduced around the world and financiers are anticipating tougher times ahead for project developers. However, movements in the Index suggest that these developments are just headwinds as the renewable energy sector continues to mature and markets expand.”

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