Investors have cooled their interest in the UK since the government announced a review of support for large-scale solar farms, according to Ernst & Young.
The consultancy firm’s latest renewable energy country attractiveness index shows the UK slipped down the quarterly rankings for the second successive time to sixth place.
“Policy tinkering and conflicting signals once again become too much for investors and developers to handle,” said Ben Warren, environmental finance leader at Ernst & Young.
“The recent carbon tax freeze, an energy market competition probe and Conservative Party plans to scrap onshore wind subsidies post-2015 are weighing heavily on the sector’s ability to assess the long-term outlook. In addition, the launch of a government consultation on future financial support for solar has taken the shine off the UK’s otherwise booming solar market,” said Warren.
The Department for Energy and Climate Change (DECC) last month announced a consultation on changes to support under the Renewable Obligation (RO) scheme that would see solar farms over 5MW competing with onshore wind from April 2015. This would require developers to take part in the auction process as early as October 2014.
“As ever with the renewables sector, more damaging than the outcome of any review itself is the uncertainty it creates and the trust it erodes. This last quarter has been no exception, with little done to foster sympathy from the renewable energy sector, which appears to be continuously caught in the firing line,” added Warren.
Canada leapfrogged the UK into fifth place with the US leading the top four chased by China, Germany and Japan.
Australia also fell, from eighth to ninth, as the Abbott government continued its reform of renewable energy support and financing.