May 17, 2017 This article is more than 2 years old.

India has zoomed past the US to take the second spot on a list of the world’s most attractive renewable energy markets.

In their annual ranking of the world’s top 40 markets for investing into renewable energy, consultancy firm EY named China (pdf) the world’s most attractive renewables market for 2017, followed by India. The US, which held the top rank last year fell to third, mostly due to a shift in domestic energy policy under president Donald Trump.

The 2017 list also includes new entrants such as Kazakhstan, Panama, and Dominican Republic, indicating efforts made by smaller countries to decrease dependence on fossil fuels and reduce greenhouse emissions.

Top 10 most-attractive renewables markets for 2017, according to EY

Rank Country 1 China 2 India 3 US 4 Germany 5 Australia 6 Chile 7 Japan 8 France 9 Mexico 10 UK

India had lagged in the renewable energy space for many decades. However, since his ascent to power in 2014, prime minister Narendra Modi has turned largely towards renewable energy to fix India’s chronic power shortages and reduce dependence on coal. In 2015, Modi called solar energy the “ultimate solution” to India’s energy crisis.

In 2015, India even held its first conference on renewable energy investment, where private companies committed some $200 billion in investments into green energy. These included large investments into solar and wind power by companies such as SunEdison Energy, ReNew Power, and the Adani group.

“A combination of strong government support and increasingly attractive economics has helped to push India into second place in the latest issue of our Renewable energy country attractiveness index,” EY said in its report (pdf). ”This follows recent dramatic growth in renewables, with more than 10 GW of solar capacity added in three years—from a low base of just 2.6 GW in 2014—and record new wind capacity installed in 2016–17 of 5.4 GW, according to official figures.”

In 2016, India was ranked third on the list behind the US and China. In 2014, the country stood seventh on the list, while it was at ninth in 2013 (pdf).

As of March 2017, India has a combined renewable energy capacity of 57 GW. Over the next five years, the country hopes to grow that to 175 GW, mostly helped by solar, which has seen a significant drop in tariffs in recent months.

“In recent tenders, solar developers [in India] have offered to supply power at lower prices than new-build coal plants, effectively blocking new coal capacity,” according to the EY report. Since 2010, solar-power tariffs have dropped over 70% and are now lower than the average cost of electricity supplied by the National Thermal Power Corporation, the country’s largest power generator, that heavily uses fossil fuels for power generation.

The 2022 renewable energy target of 175 GW includes 100 GW of solar power—60 GW ground-mounted and 40 GW from rooftop—while wind energy is expected to deliver 60 GW. The remaining 15 GW will come from biomass and small hydro projects.

The country’s wind energy installations are ahead of schedule; the country set a goal of 4 GW of new wind power capacity in 2016, and ended up installing 5.4 GW.

Solar, though, is not quite there. “Despite impressive growth of 6.8 GW in 2016, solar is lagging its target of 12 GW (7 GW of utility-scale and 5 GW of rooftop solar), showing just how ambitious the government’s goals are,” says the EY report. “The government’s additional emphasis on PV parks (solar parks) will help to plug the gap, but it needs to do more to encourage rooftop solar installations.” India’s current rooftop solar energy capacity is just 740 MW.