The US has jockeyed forward to become the world’s most ‘attractive’ market for renewables investment on the back of President Joe Biden’s plans to massively boost federal spending on the country’s energy transition, according to the latest IHS Markit rankings table.
The analyst group’s Global Renewables Markets Attractiveness Rankings report – which evaluate countries based of categories including policy framework, market fundamentals, investor friendliness, infrastructure readiness, revenue risks and return expectations – judged America as the top target for capital expenditure in non-hydro renewables, that is, offshore and onshore wind and PV, in 2020.
“The US claimed top spot on account of sound market fundamentals and the availability of an attractive – though phasing down – support scheme,” said IHS Markit in its league table, which placed Germany in a photo-finish second place, with China – “weighed down” by difficulties of market access – coming third.
“Onshore [and] offshore wind and PV are set to account for over 80% of all new power generation capacity additions globally to 2030,” said Eduard Sala de Vedruna, executive director of IHS Markit’s global clean energy technology and renewables unit.
“While the lion’s share of 2020 capacity additions came from just two markets – China and the US – close to 50 markets recorded double digit growth in the past year. The investment opportunity in renewables is significant,” said IHS Markit.
France and Spain secured the fourth and fifth spot, respectively, “based on strong market fundamentals backed by stable procurement mechanisms and long-term clean energy targets”.
These metrics also boosted Japan to number 8 and the Netherlands to 9, with the latter “further supported by [its] strong impetus towards offshore wind”, which is expected to be the fastest growing clean-energy technology in the next decade, according to the analyst.
Indra Mukherjee, a senior analyst in HIS Markit’s global clean energy technology and renewables unit, said: “The ongoing transition to competitive procurement and a growing need for grid-parity renewable power has forced investors to look beyond just financial incentives and focus on factors including economic stability, market liberalisation and investor friendliness.”
The IHS Markit rankings, which are to be updated biannually, cross-compare views of 35 markets that are expected to account for 90% of non-hydro renewables capacity additions to 2030.