U.S. leads solar photovoltaic and Concentrated Solar Power rankings

Ernst & Young Global Ltd. has released the May 2012 version of its renewable energy "Country Attractiveness Indices", noting that investment in renewables fell to the lowest level in three years in the first quarter of 2012. Despite this trend, the report notes significant funding deals in the solar sector.

The United States came in first in both solar photovoltaic (PV) and concentrating solar power (CSP) rankings, with India and Germany tied for second in PV, and Spain in second place for CSP. Ernst & Young notes that the gap between developed and emerging markets is shrinking.

"The growth of China’s wind energy sector continues to be stifled by insufficient access to the grid, while a boom-bust scenario appears to have returned to the U.S. as a result of uncertainty over the expiry of key stimulus programs," stated Ernst & Young Global Cleantech Leader Gil Forer.

"In Germany and Italy, tariff cuts and grid challenges have reduced short-term attractiveness, while the end of a key tax break incentive in India is likely to dampen wind power sector growth through 2012."

China leads "all renewables"

The report found the top nine nations in its "all renewables" index remain unchanged, with China in first place, followed by the United States and Germany, with India close behind. China also came in third behind the United States and India in the company’s "Solar index" ranking.

Mergers and acquisitions rise, IPOs decline

Ernst & Young records an estimated USD 21.7 billion worth of renewable energy merger and acquisition transactions in the first quarter of 2012, a 41% increase from the previous quarter. Solar transactions increased over the previous quarter, but were still 26% below transaction levels for the previous 12 months.

Renewable energy initial public offerings (IPOs) fell to only USD 14.3 billion raised from 157 issues in the quarter, a decline of 69% year-over-year. The company also predicts that "thin" issuance volumes in the next few quarters.

Big solar energy deals buck the trend of drop in asset financing

The report states that new build asset finance fell sharply, to its lowest levels since the first quarter of 2009, during the worst of the financial crisis. The report found USD 24.2 billion in renewable energy asset financing raised in the first quarter of 2012, a 30% sequential decline.

However, Ernst & Young notes a number of significant funding deals in the solar sector, noting MidAmerican Energy’s (Des Moines, Iowa, U.S.) USD 700 million bond financing of the Topaz Solar Farm, Soitec SA (Bernin, France) securing funding for the 50 MW Touwsrivier CPV plant in South Africa, and SunEdison LLC (Beltsville, Maryland, U.S.) securing funding for the 60 MW Karadzhalovo PV plant in Bulgaria.