The report says that financing costs have risen to new highs in the most vulnerable economies, while less-exposed markets are experiencing a return to more competitive funding terms. However, institutional capital is now starting to look at infrastructure projects like wind as a relatively safe haven to deploy its funds.
Ben Warren, Ernst & Young's Environmental Finance Leader, said: "The dual pressures of the continuing sovereign debt crisis and government austerity measures in a number of renewable-energy markets are weighing heavily on the global renewable-energy sector. The cost of finance is proving reasonably volatile, with sovereign risk being only partly countered by increased competition from lenders."
Once again, China was top of Ernst & Young's renewables attractiveness index, reflecting the Chinese government's continued support for offshore wind by announcing tenders for 2GW of projects.
In the lower half of the table, Romania was the biggest climber as the European Commission approved its green-certificate programme, which is likely to stimulate what Ernst & Young calls "significant investment" in onshore wind development.
In terms of the impact of wider global events on the attractiveness of wind energy, Gil Forer, Ernst & Young's Global Cleantech Leader, said: "Government and corporate responses to the Fukushima nuclear disaster and the Arab Spring put more emphasis on the strategic importance of the energy mix which will have an increased role for renewable energy."