China Tops Renewables Investment Rankings, U.S. Regains No. 2 Spot
The bi-annual Renewable Energy Country Attractiveness Index (RECAI) was released Tuesday by London-based accountancy firm Ernst & Young.
Despite being the world's largest emitter and remaining heavily dependent on coal, China is shifting towards clean energy amid concerns of air pollution and climate change. In its pledge as part of the Paris agreement, the country said it will aim to source 20 percent of its energy in 2030 from low-carbon sources.
China has emerged as a global leader in solar generation. Last July, the nation exceeded the government's 2020 goal of 105 gigawatts of total solar PV capacity, an amazing feat considering how it only had 100 megawatts of solar PV capacity installed a decade ago. China hit 130 gigawatts of total solar capacity in 2017, making up 32.4 percent of all installed capacity globally.
According to the latest RECAI, the U.S. and Germany leapfrogged over India, which fell from second to fourth place. India's threat of a 70 percent tariff on imported solar panels and low power bids sparked "investor concerns" regarding its "over-ambitious" 2022 solar power goals.
"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," Ben Warren, the chief editor of RECAI, said in a statement. "Combined with the plunging cost of battery technology, we anticipate further rapid growth of the evolving renewable energy sector in the coming years."
The U.S. was in third place in the previous RECAI due to President Donald Trump's energy policies. However, in the current index, a press release noted that Trump's 30 percent tariffs on solar panel imports have been mostly absorbed by the market and wind projects are not subject to subsidy cuts under the recently passed U.S. tax reform bill.
The report adds another reason why Trump will never stop the renewable energy revolution.
"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, as quoted by 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.