The global renewables industry may have been hit hard by the coronavirus crisis, but it is well positioned to "bounce back quickly" and provide a relatively "safer haven" for long term investors as the economic recovery progresses.

That is the view of consultancy giant EY, which today published the latest edition of its influential Renewable Energy Country Attractiveness Index (RECAI).

The report highlights how even as the coronavirus-induced economic crash has played out, the clean energy sector has seen institutional investors increasing the capital they are allocating to renewable energy infrastructure as a means to hedge their climate exposure.

In the midst of the worst economic crisis in a century, oil majors have announced they are shifting their investment plans in favour of renewables development and leading investors have strengthened their divestment strategies. Meanwhile, falling energy demand has allowed renewables projects to showcase how power grids typically remain stable, even as record levels of electricity is provided by variable renewable sources.

"There was much discussion around ESG earlier this year and this, along with climate change, is still the dominant long-term driver for renewable investment, despite COVID-19," said Ben Warren, EY global power and utilities corporate finance leader and RECAI chief editor. "As a result of the pandemic, pollution levels have fallen dramatically through reduced fossil fuel consumption. A greater focus on a sustainable long-term energy future therefore works in favour of clean energy, in particular wind and solar, together with storage."

The index confirms a number of changes to its international rankings, with the US climbing to top spot for the first time, following the short-term extension to Congress' Production Tax Credit for renewables developers and encouraging progress from the country's emerging offshore wind industry.

The US offshore wind market remains small, but developers are now working on plans to invest $57bn to install up to 30GW by 2030 as technology costs across the sector continue fall.

The US replaces China as the top placed country, after Beijing trimmed subsidies as it looks to create a more competitive energy landscape. However, long term prospects for the world's largest energy user remain positive, given falling renewables costs and the government's continued commitment to tackling air pollution and curbing emissions.

France has moved up from fourth position to third in the rankings, following awards of 1.4GW for wind and solar developers in its latest auction.

Similarly, the UK has climbed on place to sixth, after the government's surprise decision earlier this year to open up future clean power auctions to onshore wind and solar projects and wider plans to strengthen the grid and develop new floating wind and marine energy technologies.

Spain was also a major climber in the rankings, gaining four positions to 11th place thanks to the government's ambitious new net zero plans and proposals to expand its wind and solar sectors.

The combination of supportive policies, falling renewables costs, and the prospect of focused green stimulus plans in a raft of key markets, all suggest the clean energy sector is likely to bounce back strongly compared to many other industries, the report concludes. 

The analysis also highlights the rapid progress being made by the fast-expanding energy storage sector, which is widely regarded as crucial to enabling the continued growth of the renewables industry as grids become more reliant on variable wind and solar output.

According to the report, 12.6GWh of battery storage is planned to be installed this year, making 2020 a record year for energy storage growth. And in the longer-term, a 13-fold increase in capacity growth, from around 17GWh currently to 230GWh by 2025, is anticipated.

Benoit Laclau, EY global energy leader, said that despite the coronavirus crisis the energy industry was facing a "defining and transformative moment".

"Stakeholders are looking to collaborate and invest in companies where climate change and sustainable development is embedded in their strategy," he said. "Energy leaders should take action to invest in renewables and related sustainable long-term projects, including energy efficiency, smart power networks and low-carbon transport infrastructure."