The UK is the fourth most attractive destination for renewable energy projects, according to a new ranking of 40 countries, with the US claiming top position.
China and India complete the top three places in the ranking by consultancy giant EY, with France in fifth position.
The US is expected to hold on to first place for the foreseeable future after it rejoined the Paris Agreement and president Biden announced an ambitious target of cutting the country's emissions in half by 2030.
Similarly, China has remained a buoyant market and claimed second position after adding 72.4GW of new wind power in 2020, as developers rushed to beat an onshore wind subsidy cut.
The UK was ranked fourth place after the government gave consent for development of it largest battery-storage project, and pledged £92m in funding for innovative green technologies.
EY also revealed that global renewable energy capacity investments grew 2% to $303.5bn (£215bn) last year – the second-highest annual figure recorded to date – despite the impact of COVID-19.
However, the researchers estimate that future development to achieve net zero will require a further investment of $5.2trn, and said that institutional investors will need to play a key role in financing the energy transition.
“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,” said Arnaud de Giovanni, EY's global renewables leader.
“Risk-mitigation tools, structured finance mechanisms tailored specifically to the renewables sector and regulatory commitment would therefore help increase investment flows.”
India rose one place in the ranking from the previous edition last November after the country's solar generation was forecast to exceed coal before 2040, while Italy climbed two places to 15th position after it received a grant of €209bn from the EU Recovery Fund
Germany dropped one place in the ranking to seventh position after last-minute changes to the design of future onshore wind tenders came under criticism.
EY said that the forthcoming COP26 climate summit presents an opportunity to close the gap between what governments have promised to do and the level of action they have undertaken to date.
“The leading developed nations must honour existing promises to deliver $100b per year in climate financing for developing nations, and all nations must urgently set actionable near-term targets, rather than kicking the can down the road,” Giovanni continued. “There is not much road left.”
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