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The United States beat China to become the world’s most attractive country for investments in renewable energy, and the prospects for the U.S. renewables sector after the pandemic are bright despite the current setbacks, E.Y. said in a new report on Tuesday.
The latest edition of the Renewable Energy Country Attractiveness Index (RECAI) developed by E.Y. showed the U.S. snatching the top spot away from China for the first time since 2016. The shift in attractiveness in the United States was largely due to the short-term extension to the production tax credit (PTC) for wind power and long-term growth in offshore wind plans, which envisage investments of US$57 billion for the installation of up to 30 gigawatts (G.W.) by 2030, E.Y. said.
At the same time, growth in China’s renewables market has slowed down because the authorities want to wean the renewables market off subsidies, the consultancy noted. The slashed subsidies and lower demand from the coronavirus pandemic bumped China off its first-place seat, according to E.Y.
Apart from the U.S. and China, the top ten most attractive markets for renewables investment include France, Australia, Germany, the UK, India, Denmark, the Netherlands, and Japan.
Of these, India slumped from third place in the previous index to 7th place now, as its “progress in renewables has been labeled as ‘disappointing’”, E.Y. said, adding that India could miss its target for 175 GW of renewables installed in 2020.
In the United States, the COVID-19 pandemic is currently disrupting the sector, and jobs are being lost like in every other sector in the country. But the prospects for after the pandemic continue to be favorable, E.Y. said in its analysis on the United States.
“While the COVID-19 pandemic presents near-term headwinds to renewables, the longer-term prognosis remains favorable. One powerful driver for the sector is the clean or renewable energy targets set by a growing number of states,” said Brian Murphy, Partner, Power & Utilities Tax at Ernst & Young.
Other major drivers of the U.S. renewables industry will be declining costs of renewables and increased calls for climate awareness and sustainability among ratepayers and corporate buyers, which have encouraged utilities to favor renewables for new capacity, Murphy said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.