US succeeds China as world’s top renewables market, EY study shows

The US has overtaken China as the most attractive country in the world for renewables investment and the global cleanenergy sector is expected to bounce back quickly despite the coronavirus pandemic, research showed on Tuesday.

In an annual ranking of the top 40 renewable-energy markets worldwide by consultancy EY, the US was ranked first for the first time since 2016, followed by China.

US growth is largely due to a short-term extension of a production tax credit for wind projects and plans to invest $57bn to install up to 30GW of offshore wind by 2030, the report said.

Wind projects that began construction in 2016 need to be operational by the end of the year to qualify for the US tax credit, which is forecast to create a surge in installations this year.

China’s growth in renewables has slowed, as the government looks to wean the market off subsidies.

This, coupled with reduced demand as a result of Covid-19, has caused China to drop to second in the index from first last year, but forecasts remain optimistic for long-term growth, the report said.

France was ranked third, followed by Austria, Germany and Britain. India slumped to seventh place, having been third last year, due to warnings it might miss its 175GW installation target by 2022.

Despite delays to some projects due to logistic issues amid the coronavirus pandemic, the global renewables sector is expected to bounce back quickly as the long-term drivers for investment remain strong, the report said.

“There was much discussion around environmental, social and governance issues earlier this year and this, along with climate change, is still the dominant, long-term driver for renewable investment,” said Ben Warren, EY global power and utilities corporate finance leader and chief editor of the report.

“As a result of the pandemic, pollution levels have fallen dramatically through reduced fossil fuel consumption,” Warren said.

“A greater focus on a sustainable, long-term energy future therefore works in favour of clean energy, in particular wind and solar, together with storage,” he said.