For many people, investing in renewable energy is first and foremost an ethical choice. With environmental issues now part of the public consciousness the idea of investing in something that is of a value over and above that of financial gain is not only laudable, it is possible.
But investing in renewable energy projects isn’t just about “saving the planet”. There’s cold hard cash to be made too. UN figures from 2009 showed renewable energy investments outstripping fossil fuel investments for the first time with wind, solar power and other clean technologies attracting $140billion (£88.5billion) of investment compared with $110billion (£69.5billion) for fossil fuels for electrical power generation. Over a third of this green investment was destined for Britain and the rest of Europe.
According to the Global Trends in Renewable Energy Investment 2011 report, global investment in renewable energy jumped a further 32% in 2010, to a record $211billion (£133billion) with China and developing nations beginning to take a bigger role. Whichever way you look at it, renewable energy is a burgeoning market and investors are making money.
For the small investor there are a few ways of getting involved. Wind and solar generated energy are amongst the most visible and the most popular ways of generating renewable energy. Many small investors are profiting from simply generating their own energy, using these methods on a micro scale, and benefitting from the Feed-in Tariff scheme to generate a small income and save on their energy bills.
It is also possible to invest directly into renewables without having to have a wind turbine in the garden or solar panels on the roof. The best and easiest way to do this is via a renewable energy fund. The funds allow you to invest in small to medium scale UK renewable energy projects. For example the The Ventus Funds won the "Development or Private Capital Investment" award at the 2010 Climate Change Awards.
The Invicta Energy Fund LLP (incorporating an Exempt Unit Trust for SIPP and SSAS investors), and The Invicta Solar EIS Fund, are two more funds from Invicta that offer investment opportunities in British-based solar energy installations. These benefit from the Feed-in Tariff Scheme (as described above) and, again, allow investment without being physically involved with the electricity generation. The portfolio for The Invicta Energy Fund, LLP has been structured to offer a target annual distribution of 8% (post tax) per annum and a total annualised target IRR of 20% (post tax).
Bio mass energy is also a growing field of renewable energy generation, and as such is of interest to investors. Unless you are a large scale farmer, investing in a fund is really the only way to become involved in this. Brazil is leading the way in biomass production and with its growing economy, government subsidies, development bank loans, burgeoning middle class and a highly skilled labour force it is becoming increasingly attractive to investors across the board.
There are numerous biomass investment opportunities in Brazil. Bauhaus Capital Partners run several schemes, including the installation of a 60 million litre per year biodiesel production facility and a planned pelletized biomass production facility.
If you are interested in investing in renewable energy production across the board then you are well catered for here too. Ethical investment bank Triodos has a number of packages available that should fit your criteria. Of particular interest is their Triodos Renewables Fund which offers investors the chance to buy shares in a PLC owned by over 4,000 like-minded investors who want their money to accumulate at the same time as contributing to cleaner energy technology and contributing towards “significant and much-needed changes in how we generate and distribute energy”.
The renewable energy sector is growing at a massive rate and, having surpassed fossil fuels in investments, can now be considered the major player in energy generation. Investment opportunities abound and if you look around you can use your money to the greater good and generate a nice bit of profit.
- Carbon offsetting, carbon trading
- Emissions trading
- Feed-in tariff (FIT)
- Green oil investment
- Renewable energy investment
- Solar investments
There are many renewable energy investment schemes in the UK, all are known as green investments and these allow you to profit whilst still doing well for the environment. While investing in timber, bamboo, teak and forests are known as ethical investments.