The attractiveness of the UK as a destination for renewable energy investment has decreased to its lowest level in five years, consultancy Ernst & Young (EY) has suggested.
In its latest Renewable Energy Country Attractiveness Index, EY ranked the UK at the seventh place among 40 renewable markets, a notch down in comparison to last year and the lowest level since 2009.
This was mainly the result of “policy mishaps” in subsidies allocations, according to Ben Warren, environmental finance leader at EY.
He pointed out that confidence in the UK’s solar sector has been affected by a recent proposal to withdraw Renewables Obligation (RO) support for projects above 5MW two years earlier than planned, with legal challenges and investor petitions launched as a result.
The Government has also already allocated the majority of the funding available to support renewable energy projects through to 2020, which left investors and developers concerned about budgetary constraints for future projects, said Warren.
“To continue to compete for international capital, the UK’s market reform and upcoming Contract for Difference regime will have to go a long way to repair the damage,” he added.
EY found China as the most appealing investment destination for renewable projects, followed by the US, Germany and Japan, Canada and India.