China retains crown as most attractive renewables market: EY report

Accountancy firm Ernst & Young (EY) has ranked China as the most attractive market for investment in renewable energy, despite the Asian powerhouse moving to cut subsidies for the industry last year.

China made first place in EY’s annual Renewable Energy Country Attractiveness Index (RECAI) for the fourth year in a row, ahead of the US in second – a non-mover from the previous year. France, India and Australia completed the top five.

Last year, China introduced cuts to its expensive feed-in tariff (FiT) regime, which resulted in solar PV capacity additions falling to 44.3GW, from a record 53GW in 2017. The government continues to offer FiTs to the wind energy sector, although rates are starting to decline.

The government has also proposed setting up an auction system to support renewables as it tries to move away from subsidising the sector.

“China’s renewable energy market is undergoing a transition as the government seeks to rein in the costs of the subsidies paid to the sector,” said EY in the report.

“With continuing concerns about pollution, falling technology costs and revived interest from international players, however, growth in the world’s largest clean energy market is set to continue.”

Other countries, such as Norway and Finland, have also attempted to move away from FiTs and towards power purchase agreements (PPAs) in the last year. Finland moved up the EY index after launching a renewable energy tender in November 2018.