Canada remains among the top ten countries in which to invest in renewable energy, but just barely. We are losing ground to other countries, according to the 2006 Ernst & Young Renewable Energy Country Attractiveness Indices.

The indices provide scores for national renewable energy markets and related infrastructure, and country-suitability for individual technologies.

A number of factors are taken into account to generate a Renewables Infrastructure Index, including electricity market regulatory risk, planning and grid connection issues, and access to financing.

The infrastructure score is then combined with a Technology index to generate a score for each individual renewable technology. The technology index considers power off take attractiveness, tax climate, Grant/soft loan availability, market growth potential, current installed capacity, resource quality, and project size. Technology indices are divided into four categories: Onshore wind, Offshore wind, Solar, and Biomass and Other Resources.

Canada received a score of 54 for the Overall Renewables Index, which was good for 10th place.

The top five countries for the Overall Renewables Index were Spain with a score of 69, the United States with 67, Germany with 62, India with 61, and the United Kingdom with 60.

Canada received the 8th highest score for Wind, 15th for Solar, and 17th for Biomass and Other Resources. Canada scored 4th highest for the Renewables Infrastructure component of the overall score.

Canada has made gains in past years with provincial policy developments, but lost ground this year because other countries have been ‘outstanding’, says Jonathan Johns from the Renewable Energy & Waste Group at Ernst & Young.

“It’s an intensely competitive worldwide market,” says Johns, and countries like India and Spain are leading the way with progressive policies that attract investment. “The United States is just a colossus in worldwide demand,” he adds, noting that international suppliers of goods such as wind turbines have struggled to keep pace with demand.

It appears that Canada has not gone backwards in its renewables policies, but has been overtaken by countries that have moved forward more quickly. With clean energy growing at a furious pace, supply shortages mean that investment will flow firstto those areas with the most favourable policies.

Top-ranking countries employed a variety of ‘push’ and ‘pull’ measures and incentives to encourage renewable technology development and grid uptake. In the United States, the Production Tax Credit (PTC) is seen as vital to maintaining a high level of renewables investment. Germany’s feed-in-tariff system remains one of the most effective models, and is similar to the Standard Offer Program initiated recently by Ontario.

Ontario is in fact largely responsible for Canada’s relatively high score, says Johns. Canada has strong natural resources for wind and biomass, but has been slow to bring renewables capacity online. Canada does employ a large amount of hydroelectric power, which is not considered a renewable in this study, even though it produces zero-emissions.

Natural resources aside, government support is the driving force for renewables growth, and Spain, India, Germany and the United States have enacted stronger incentives to promote clean energy. In order to remain with the pack, Canada will need more provincial regimes like Ontario’s.