Consultants Ernst & Young have released their annual global renewable energy country attractiveness indices with the big news being that China has knocked Germany from its number one spot, a position which they have enjoyed for the last seven years. The report indicated that in the lead of attractiveness are the US and China followed by Germany, India and Spain.
With various leading economies around the globe vying to become leaders in the renewable energy sector the Ernst & Young indices provides a tangible demonstration of how attractive the competing markets are to investors based on the measures taken by the respective governments. The commitments by the Chinese government to slow climate change through the reduction of carbon emissions has certainly been reflected in their rise in the investment indices.
Once the pariah of the international community with regards to fighting climate change, the Beijing government has demonstrated through legislation that they have a very earnest desire to slow the effects of climate change.
Recently the Chinese government announced 1.8 GW of solar installation throughout the vast country with investment incentivisation coming in the form of the Golden Sun subsidy scheme designed to transform the Chinese solar market from a purely manufacturing base into a world leader in solar PV installation. This, the report indicated was the key feature in China moving up the table from sixth place in 2007 to the joint number one position enjoyed today.
The report will come as an early Christmas present for the nations perched in the top 5 positions as it gives investors a comprehensive assessment of the most viable markets in which to invest based on criteria such as existing infrastructure, incentives and location benefits.
With the success of China as a potential solar PV market, analysts in the UK will not have missed the direct correllation between government action and market attractiveness, something which the report explicitly highlighted. The UK enjoyed limited success, moving up one point to sixth, an increase based on limited government action taken so far in the form of the creation of the Department of Energy and Climate Change (DECC), the introduction of the Energy Act in November 2008 and the recent announcement of the Clean Energy Cash Back system, essentially a feed-in tariff to be introduced in April 2010.
The UK’s position of sixth could be bettered by the next indices published by Ernst & Young at the end of 2010 but will depend greatly on the initial successes of the UK market in the light of the newly implemented tariff system. At the present moment members of the lobby group We Support Solar are arguing that the UK government will have to increase the tariff rate if the UK is to compete with the emerging solar tiger economies with manufacturing bases much closer to home.
For more information on the Ernst & Young global renewable energy country attractiveness indices, please visit: