The US and China held joint first place the last time the index was published in June, after China had climbed two points to challenge the US for the top spot.
But in the latest edition of the indices the US slipped back two points following its failure to enact a Renewable Energy Standard this summer, giving China pole position.
The US had occupied the top slot since 2006, but E&Y said it expected US renewables new-build to slow this year after a deadline to extend a Treasury grant aid program expired in December with no assurance of renewal, leading to increased investor uncertainty.
"It is clear that recent events have stalled momentum. The US market continues to have significant potential but requires consistent political support to provide investors with the long-term confidence they need," said Ernst & Young’s Environment and Energy Infrastructure Advisory Leader Ben Warren.
China, meanwhile, which only entered the index in December 2004 has been climbing up the ranks as its government has made a firm and sustained commitment to investment in renewable energy, E&Y said.
"China’s surge to pole position has been underpinned by strong and consistent government support for renewable energy. This, together with substantial commitment from industry and the sheer scale of its natural resources, means that its position as top spot for renewable energy investment is well-merited," said Warren.
POLICY UNCERTAINTIES IN EUROPE
Germany was static in third place despite slipping back one point as a result of its decision to cut future solar feed-in tariffs.
India remained in fourth place despite a one point slide following a government decision to only use local photovoltaic manufacturers for its 22 GW solar program.
Italy remained in joint fifth place with the UK. Despite renewed commitments from the country’s new Conservative-Liberal Democrat coalition government, Warren said there was still uncertainty about policy detail, especially the proposed renewable heat incentive which is due to start next April, but on which the government has yet to make final announcements.
France stayed in seventh place, while Spain was static in eighth despite slipping back back one point because of its plans to impose retroactive cuts to feed-in tariffs for solar photovoltaic, which if implemented could have wider implications across the renewables sector in Europe, according to E&Y.
By Paul Whitehead, www.platts.com