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China reaches pole renewable investment position

China overtakes US as most desirable location in which to invest in renewable energy projects according to Ernst & Young's latest Renewable Energy Country Attractiveness Indices.

Having entered the Country Attractiveness Indices table in December 2004 China has progressed steadily to the top of the All Renewables Index for investment in renewable energy.

"China's steady rise", as Ben Warren, Ernst & Young's Environment and Energy Infrastructure Advisory Leader, explains,  "has been underpinned by strong and consistent government support for renewable energy. This, together with substantial commitment from industry and the sheer scale of its natural resources, means that its position as top spot for renewable energy investment is well-merited.”

The USA has dropped two points in the indices after a Federal Renewable Energy Standard was not enacted this summer. Furthermore, construction of new renewable energy facilities is expected to further slow down following the December 2010 expiration of an important deadline in the Treasury grant programme with no assurance of renewal, generating investor uncertainty about the continuation of an effective incentive mechanism for renewable energy.

How other countries fared in the indices:

  • Spain has lost a point largely as a result of current deliberations regarding retroactive changes to the solar photovoltaic (PV) tariffs;
  • Germany also dropped a point due to announced cuts to solar PV tariffs which are set to limit future installations;
  • India suffered a one-point drop following its government's mandate to use local solar PV manufacturers for the 22 GW National Solar Mission. Indian solar PV module makers may not be able to keep up with the surging domestic demand, impairing the country's ability to meet its ambitious solar energy target.
  • Australia increased its rating by one point, following its Senate passing amended legislation that targets 20% of energy from renewable sources while committing A$652.5 million (€458m) over four years to set up a Renewable Energy Future Fund;
  • Japan saw a one-point increase, following a 2.6-fold growth in it solar cell market in the financial year to 31 March, owing to the country's aggressive climate policies; and
  • New Zealand also rose a point, following the launch of an emissions trading scheme in a bid to curb carbon emissions. As a result, energy, transport and manufacturing industries will have to pay for their emissions of gases which is expected to have a knock-on effect in boosting renewable deployment in the country.

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