Ernst & Young: Germany Takes Lead for Renewable Energy Investment
The United States has seen its position as the most attractive destination for investment in renewable energy nose dive, helping Germany move to joint first place according to Ernst & Young’s latest renewable energy country attractiveness indices, according to a December press release.
The indices - which track and score global investment in renewable energy – also reveal that there has been a record reduction in the attractiveness of all 20 countries included for the first time since its creation five years ago.
Jonathan Johns, head of renewable energy at Ernst & Young says, “Although the financial crisis has negatively impacted the attractiveness of all countries in the indices, the U.S. has borne the brunt of the economic slowdown.”
The economic situation in the United States has restricted access to finance and slowed the recycling of Production Tax Credits (PTC) and Investment Tax Credits (ITC), which allow corporations to gain tax breaks by purchasing credits from renewables developers.
“This has allowed Germany, almost by default, to take the position of most attractive destination for renewable investment alongside the U.S., largely as a result of its feed-in tariff making the German market more resilient,” Johns adds.
The United Kingdom moved one place to joint fifth in the All renewables index, sharing the position with Spain. The attractiveness of the United Kingdom was boosted by the government’s announcement in its Pre Budget Report to extend the renewables obligation to 2037, as well as the enactment of the Energy and Planning Act 2008, which includes the establishment of a new feed-in tariff for small wind farm projects with up to 5 megawatt capacity.
“The path followed by the U.S. is critical to the industry and measures announced by the impending Obama presidency will be keenly monitored. Worldwide growth of renewables is likely to continue, albeit at reduced levels, but if the U.S. were to stall its plans, there would be significant reverberations for the global industry,” adds Johns.