Press release

19 May 2021

India ranks 3rd in the ‘Renewable Energy Country Attractiveness Index’ released by EY

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Related topics Energy and resources
  • US retains the top position with China and India bringing up the top 3 in the rankings
  • RECAI 57 finds that environment, sustainability and governance (ESG) goals are increasingly being prioritized on the investor agenda while institutional investors’ interest in renewables continues to grow.

New Delhi, 19 May 2021: India has moved up a position to the third spot in the 57th EY Renewable Energy Country Attractiveness Index (RECAI) released by EY. Also, India’s solar sector is expected to grow significantly post the COVID-19 pandemic, with generation from solar PV forecast to exceed coal before 2040. This dramatic change has been driven by the Indian government’s policy ambitions, which has led solar PV to be the most cost competitive source of power in the region and improving further with the passage of time.

In 2020, global renewable energy capacity investments grew 2% to US$303.5b, the second-highest annual figure recorded to date despite the impact of the global COVID-19 pandemic. However, the EY RECAI 57 estimates that future development to achieve net zero will require a further investment of US$5.2t and highlights the role institutional investors will need to play in financing the energy transition.

RECAI 57 finds that environment, sustainability and governance (ESG) goals are increasingly being prioritized on the investor agenda while institutional investors’ interest in renewables continues to grow.

Somesh Kumar, Partner and National Leader, Power & Utilities, EY India, says, “India has moved one position above (3rd) from the previous index (4th), this is primarily because of the exceptional performance on the solar PV front. Installed solar PV capacity in India has skyrocketed to 39 GW marginally overtaking the wind capacity for the first time. The economic attractiveness of solar PV and intense competition from the private sector has led to record low tariff bids. India also committed to set up 450 GW for renewable energy power capacity (installed) by 2030 in the recent climate summit hosted by US. This will likely increase the share of renewable energy in the overall power generation installed capacity to 54%, vis-à-vis share in overall gross generation to 36%.”

The forthcoming 2021 United Nations Climate Change Conference of the Parties (COP26) presents an opportunity to close the gap between what governments have promised to do and the level of action they have undertaken to date. RECAI 57 finds that current policy and pledge trajectories from leading nations indicate an increased commitment to greater accountability and transparency, with representatives expected to outline clear roadmaps and detail on policy measures to spur investment in renewables.

Ben Warren, EY Global Power & Utilities Corporate Finance Leader and RECAI Chief Editor, says, “The impact of the COVID-19 pandemic on economies across the globe seems to have refocused investors’ minds on the environmental, social and corporate governance agenda and there is a growing trend toward considering the climate crisis and the energy transition when deploying capital. As a result, interest in renewable energy development has risen among institutional investors who have pledged to incorporate climate-risk concerns into their decision-making processes, resulting in new models of investment to locate opportunities that satisfy their risk and return expectations.”

US retains the top position with China and India bringing up the top 3 in the rankings

The US retains top position on the Index and is expected to hold its position under President Biden. The reacceptance of the Paris Accord, coupled with the recent announcement to cut GHG levels by 50-52% as early as 2030 and achieve 100% carbon free power by 2035, will likely see increased investment interest in the US. Similarly, China has remained a buoyant market and maintains second position, adding 72.4GW of new wind power in 2020, as developers rushed to beat an onshore wind subsidy cut. In April, China and the US also announced that they would work together and with other markets to tackle climate change.

India rose one place in the rankings to 3rd position as the country’s solar sector is expected to grow significantly post the COVID-19 pandemic, with generation from Solar PV forecast to exceed coal before 2040.

East Asian markets Japan and South Korea (ranking in 8th and 17th positions respectively) also made commitments toward net zero in the past year. The report highlights that East Asia has a robust pipeline of clean-energy projects, with more than 800 shovel-ready schemes and with a total investment potential of US$316b.

Other markets have climbed the Index, as numerous governments take tentative steps toward launching new offshore wind projects. Poland, now in 22nd position, has adopted a new act to promote 5.9GW of offshore wind by 2030 through competitive auctions. And Brazil’s federal environmental authority has released licensing guidelines for offshore wind projects, seeing Brazil climb to 11th position.

Germany drops by one place in the ranking to 7th position, as last-minute changes to the design of future onshore wind tenders came under criticism. These changes would allow regulators to reduce the size of auctions if undersubscribed and developers believe that this uncertainty will lead to decreasing bid volumes.

Italy climbs two places in the ranking to 15th position after receiving a grant of €209bn from the EU Recovery Fund. The Italian government has also told developers that it is willing to extend its 4.7GW program of support auctions for onshore wind and solar PV into next year after the initial round was undersubscribed.

Arnaud de Giovanni, EY Global Renewables Leader, says, “There is a clear shift away from fossil fuel investment and toward environmentally sustainable projects by institutional investors who are typically more risk averse in their investing principles. Risk-mitigation tools, structured finance mechanisms tailored specifically to the renewables sector and regulatory commitment would therefore help increase investment flows. Committed action from COP26 delegates is a must to ensure that the legacy of Paris Agreement is brought to fruition. The leading developed nations must honor existing promises to deliver US$100b per year in climate financing for developing countries, and all countries must urgently set actionable near-term targets, rather than kicking the can down the road. There is not much road left.”

For the complete top 40 ranking and analysis of the latest renewable energy developments across the globe, visit


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About the EY Renewable Energy Country Attractiveness Index

The EY Renewable Energy Country Attractiveness Index (RECAI) ranks the top 40 markets in the world on the attractiveness of their renewable energy investment and deployment opportunities. The rankings reflect EY assessments of market attractiveness and global market trends. This edition reflects on the glimpse of what the energy industry might look like in the future based on COVID-19 lockdown measures, when large reductions in energy demand resulted in the share of renewables soaring across most regions.