Clean Energy Investment Hit By Debt Crisis

The ongoing debt crisis in Europe and the recent negotiations over the U.S. debt limit are having a significant impact on the financing of global renewable energy projects, according to the latest Renewable Energy Country Attractiveness Indices (CAI) report [PDF] from Ernst & Young. The indices, which are released quarterly, score 35 countries on the investment potential of their national renewable energy markets, renewable energy infrastructures and their suitability for individual technologies.

Although there was little movement among the top 10 countries compared to the last report, the new report noted that financing costs have risen to new highs in the more vulnerable economies, while less exposed markets were returning to innovative financing options from the private sector. China maintained its first place position in the index. The Chinese government recently announced that it will hold tenders for a total of 2 gigawatts (GW) of offshore wind capacity in order to reach its target of 5 GW by 2015. The United States remains in second place behind China after a relatively subdued quarter. The U.S. Department of Energy (DOE) continues to offer loan guarantees for solar and onshore wind developers, but uncertainty surrounds the future of DOE Treasury grants for solar and wind, which are scheduled to end in September and December, respectively.

renewable-energy investment

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The ongoing debt crisis in Europe was countered by increased incentives for offshore wind in France and Germany. France released tenders for 3 GW of offshore wind projects, and Germany launched a €5 billion incentive program for the sector. Further down the list, Romania’s Green Certificate program was approved by the European Commission, and is likely to stimulate onshore wind development in the country.

The Fukushima nuclear disaster received mixed responses from governments. Japan fell one place in the index, and Germany climbed to third place, having announced its commitment to ending its nuclear program in 2022. France remained static in the index, despite having reaffirmed its support for nuclear power.

Lauren Craig is a writer and consultant living in Seattle, WA. She holds an M.S. in International Development from Tulane University, and is co-founder of Sustainable Systems Integrators, LLC., an employee-owned solar energy design and installation firm in New Orleans, LA. She is also certified in PV design and installation by the North American Board of Certified Energy Practitioners (NABCEP).