India slips to eighth position in Renewable Energy Country Attractiveness Index

Greentech Lead Asia: India is losing sheen among foreign renewable energy investors, according to the latest report published by Ernst & Young.

The ‘Renewable Energy Country Attractiveness Index’ published by Ernst & Young in May 2013 says India’s ranking slipped from the fourth position in the previous quarter to eighth in the first quarter of 2013, Business Standard reported.

The rising cost of finance and entry barriers for external investors are some of the reasons attributed for this fall.

“A high barrier to entry for external investors causes India to score lower than most of its top 10 rivals. Also, bankability is jeopardized by the high cost of financing and significant infrastructure barriers here,” E&Y India partner and national leader for clean-tech, Sanjay Chakrabarti said.

However, India is gaining as the hot spot with increased focus on the role of renewable energy driving new levels of power sector investment and aiming to nearly double the amount it generates from renewable sources, E&Y said.

“Withdrawal of accelerated depreciation caused the overnight disappearance of the wind retail market. However, this has also brought to the fore the independent power producers, mostly backed by large PEs. The wind sector’s size has therefore shrunk, but it has also arguably resulted in a stronger market, with IPPs committed to setting up quality assets”.

On the solar energy front too, there has been active interest in the bids across states, the phase-II of the national mission is eagerly awaited, Chakrabarti said.

A significant concern affecting the solar market is the trade war sweeping through the global solar market.  The US lodged a complaint with the WTO that domestic content requirements attached to the National Solar Mission allegedly discriminate against US solar equipment imports.

“India is currently in talks with the US over the complaint, but the government insists that more than 70 percent of the 551 mw solar capacity installed since the start of the mission has been built using imported modules. Last November, the country began its own anti-dumping investigation for solar cells from the US, mainland China, Taiwan and Malaysia,” Chakrabarti said.

Countries like Germany, Japan, Italy, Australia and Canada have moved up with respect to India in the Renewable Energy Country Attractiveness Index.

editor@greentechlead.com