The latest Ernst & Young Renewable Energy Country Attractiveness Index has found that Spain is set to surpass the UK as the most attractive spot for renewable energy investment.

Both the UK and Spain continue as the most attractive national environments for investing in renewable, but it is feared the UK could slide down the rankings if windfarm development continues to lag.

“The UK has recently been hit by increased costs under the government’s revised business rates regime for renewables and increases in transmission use of system charges with the introduction of BETTA (British Electricity Trading and Transmission Arrangements),” said Jonathan Johns, Ernst & Young’s head of global renewable energy, before adding, “It may not be long before the new markets steal the renewable energy industry limelight from the likes of the UK and Germany. The market should continue to watch this space where Canada, China and India are concerned.”

On a positive note Johns said, “The banks’ appetite for offshore wind has grown over the last few years and the key question is no longer if they will lend to offshore wind, but how. Early finance will come at a premium but, on the up-side, we anticipate that liquidity for refinancing should be up in 3 – 4 years time, bringing finance costs down for developers and reducing the banks’ long term risk.” European emissions allocations are also seen as an investment driver.