Investors are looking to renewables as a potential “safe haven” amid Covid-19 turbulence, said EY in its latest analysis of global markets that ranked the US above China as an attractive destination for investment for the first time since 2016.

The level of capital institutional investors are allocating to renewable energy infrastructure is increasing, with the sector set for a rapid bounce-back thanks to long-term drivers around sustainability and climate goals, said the business services group.

Ben Warren, EY global power & utilities corporate finance leader, said: “As a result of the pandemic, pollution levels have fallen dramatically through reduced fossil fuel consumption. A greater focus on a sustainable long-term energy future therefore works in favour of clean energy, in particular wind and solar, together with storage.”

Warren’s comments came as the US returned to the top of EY’s Renewable Energy Country Attractiveness Index (RECAI) for the first time since 2016, displacing long-time leader China.

EY cited a short-term extension to the federal Production Tax Credit incentive and prospects in US offshore wind thanks to plans to invest $57bn to install up to 30GW by 2030.

China is in a slower phase as the government applies the brakes to subsidies and moves projects to competition – but EY said the prospects there remain strong for the long-term.

France and the UK both move up a place in the latest RECAI thanks to positive policy moves around auctions and contract-for-difference (CfD) rules respectively.

India saw a steep fall from third place six months ago to seventh, as EY noted “disappointing” progress that will see it miss its flagship 2022 targets, a situation made worse by the Covid-19 crisis.

Renewable Energy Country Attractiveness Index May 2020

1. (2) US

2. (1) China

3. (4) France

4. (5) Australia

5. (6) Germany

6. (7) UK

7. (3) India

8. (9) Denmark

9. (10) Netherlands

10. (8) Japan

Source: EY