U.S., European Renewables Hurt by ‘Perfect Storm,’ E&Y Says

Renewable energy projects in the U.S. and western Europe have been hurt by subsidy cuts, reduced access to finance and competition that are shifting markets to emerging economies and eastern Europe, Ernst & Young said.

Brazil became the third developing country to move into the top 10 of the consultant’s 40-nation quarterly Renewable Energy Country Attractiveness Index, rising one notch from 11th place, according to an e-mailed statement today. Tunisia, Argentina, Ukraine, Israel and Hungary were all added to the measure for the first time.

“The mature renewable energy markets of western Europe and the U.S. have been hit by a perfect storm of reduced government incentives, restricted access to capital and increased competition from abroad,” Gil Forer, Ernst & Young’s global cleantech leader, said in the statement.

“We are seeing growing support for renewable energy in emerging markets,” Forer said. “Such countries, with a strongly growing energy demand, are seizing this opportunity to leap-frog fossil fuel generation to secure a low carbon and resource-efficient future.”

China, which took the lead in August 2010, remains top with a score of 70, followed by the U.S., Germany, India and Italy, all of which held their positions. The U.K. moved up one spot from sixth to tie with Italy even though the government scaled back solar incentives.

Ernst & Young assessed criteria including regulations, planning barriers and access to capital, land and the electricity grid.

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