China continues to maintain its dominant position in Ernst & Young’s (EY) latest Renewable energy country attractiveness index (RECAI), while the US overtook India’s second place in the ranking, with Germany holding onto third place in the rankings.
India dropped to fourth place in the ranking because of the threat of a 70 percent tariff on solar panel imports and lower power bids. This situation has created concerns with investors over the country’s “overly ambitious” 2022 solar power goals. Australia snagged fifth place in the 40-country rankings.
Renewables market in the U.S.
The renewables market in the United States, on the other hand, seems to have weathered President Donald Trump’s imposition of tariffs on imports of solar photovoltaic and modules. So despite the so-called protectionism imposed on the renewables industry, it turns out the tariffs are mostly absorbed and wind projects are not subject to subsidy cuts under the recently passed US tax reform bill, said EY in its report.
“Solar import tariffs imposed by the U.S. government in January are likely to have only a limited impact on solar energy development in the country but are likely to tip the scales toward wind projects at the utility scale,” the report said, according to Reuters.
“The solar tariffs — which are to be challenged under World Trade Organization rules — are neither expected to seriously derail U.S .solar investment, nor encourage much, if any, shifting of solar manufacturing back to the U.S.,” it added.
And the EY report is right on target, too. And what about the president’s thinking the solar tariffs would cause a boom in solar manufacturing in the U.S.? In a January Digital Journal story on the solar tariffs, Hugh Bromley, a Bloomberg New Energy Finance (BNEF) solar analyst said It won’t. “Anyone expecting a U.S. manufacturing renaissance as a result of these tariffs is set to be disappointed,” he said.
Renewables market continues to grow
The EY index also illustrates that rising interest rates and reduced government subsidies for clean power are “just headwinds as the renewable energy sector continues to mature and markets expand,” commented RECAI chief editor Ben Warren. “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,” he added.
Some notable upward movements in the index saw the UK move up three spots to seventh place, while the Netherlands moved from fifteenth place to ninth place in the rankings.
Besides India falling in the rankings, we can also include Chile; Mexico; and Argentina. Canada was also among the fallers as wind power capacity additions last year dropped to 340 MW from 702 MW in 2016. There were also four new countries to join the rankings – Taiwan, Poland, Norway and Indonesia.
