Japan leapfrogs UK in EY RE list

Japan overtook the UK as an attractive destination for renewables investors in the latest country rankings from accountants EY.

Japan climbed to fourth place in the quarterly Renewable Country Attractiveness Indices (RECAI) thanks to its “rapidly growing solar markets, a burgeoning offshore sector and proactivity in addressing infrastructure barriers”.

EY noted that Japan’s generous FITs had spurred almost 7GW of solar installations last year.

While the Japanese grid had proved a hindrance to renewables growth, the Tokyo government appears to be tackling the issue, it added.

By contrast, EY’s analysts said the UK, down one place to fifth, had suffered from a lack of policy clarity.

Ben Warren, EY’s environmental finance leader said: “The UK’s fading appeal is the direct result of the lack of clarity on the Government’s long-term energy strategy at a time when energy security is a concern and investors are looking for commitment.

“Recent announcements around CfDs have been perceived by some investors as a risk to investment stability, for onshore wind in particular, given the regime changes and subsidy cuts already planned," Warren added.

“At the same time, the UK offshore sector has also taken a battering, with a number of high-profile projects being mothballed in recent months.”

The US stayed as number one in the RECAI rankings ahead of China – but EY said the gap between the two had narrowed as Beijing “accelerated its deployment efforts, while Congressional gridlock continues to hamper US policy”.

The renewable market in third-placed Germany took what EY called “a battering” in 2013 as "rhetoric" about energy costs failed to translate into policy, “making developers and investors nervous and contributing to a staggering 46% fall in new investment”.

Canada, India and Australia, France and South Korea complete the RECAI top 10.