The US and China are the most attractive locations in the world in which to invest in renewable energy projects, according to a new report by Ernst & Young (E&Y).

China has moved ahead of Germany for the first time in the report’s six-year history to rank just behind the US.

China has been improving its position in renewable energy as it increases its commitment to reduce emissions through its carbon intensity reduction plans.

E&Y’s environment and energy infrastructure advisory leader Ben Warren said China was increasingly focused on its renewable energy industries.

“China is also relaxing its restrictions on the amount of non-domestic components used to manufacture generation technologies,” he said.

“In fact, China is now expected to lead the world in terms of investment in renewable energy in 2009.”

The E&Y indices rank countries based on their desirability as locations for investing in renewable energy technologies such as wind and solar power.