China is the most attractive country to build new renewable energy projects

China has come out on top in latest rankings highlighting the best places to invest in renewable energy.

The renewable energy attractiveness index (RECAI), published twice a year by EY, ranks the top 40 countries for investment and deployment in the sector.

The latest report, released today, sees India falling from second place to fourth. The US now sits in second with Germany rounding off the top three.

Key highlights from the index include the possible rise of protectionism as a result of President Trump’s 30 percent tariffs on solar imports. The Indian Government is similarly considering a 70 percent import tariff on solar panels. Despite this, the market in the US remains strong with incentives for wind projects withstanding the new tax bill in the country.

The UK also fared well in the index, climbing three places to seventh position on the back of new subsidy-free solar and onshore wind projects. The country has also made moves to repower old wind farms. The Netherlands rises to ninth place from 15th as a result of the high uptake in new renewable projects since the last report was published six months ago.

Ben Warren, EY’s chief editor behind the rankings commented that “while the current economic climate has driven a relentless focus on costs, that focus is paying dividends with the global cost of electricity from renewable sources falling year-on-year. Combined with the plunging cost of battery technology, we anticipate further rapid growth of the evolving renewable energy sector in the coming years.”

Rising interest rates and cuts to subsidies could pose a problem for developers of new renewable energy projects. While this might make building out new wind and solar farms more expensive, Warren believes these developments are “just headwinds as the renewable energy sector continues to mature and markets expand.”