Sustainable Investing  

Falling prices open up new opportunities

This article is part of
Sustainable Investing - October 2016

Perhaps the most significant technology to watch is solar photovoltaic (PV) electricity. From a virtually standing start five years ago, almost 10 gigawatt hours (GWh) at peak times has already been installed in the UK. This is spread over a range of systems, from close to 750,000 small-scale domestic rooftops systems, to commercial-scale systems, to solar farms. These systems provide a wide range of opportunities for individuals and institutions, and prime minister Theresa May’s announcement in September that she will ratify the Paris Agreement on climate change indicates they will continue to benefit from government support.

A further boost has come from Bank of England governor Mark Carney, speaking at a Deutsche Bundesbank event in Berlin in September where he described green finance as “a major opportunity”. Professor Haigh agrees: “Investing in low-carbon, ‘clean-tech’ innovation would be a win-win situation for the UK’s environment and economy.”

Community investors in solar PV and wind farms in the UK have achieved steady returns of 6-7 per cent in recent years. Although there are risks attached to these investments, as they are not protected by the Financial Services Compensation Scheme, they are increasingly the focus of local authorities as they seek to manage their ratepayers’ funds efficiently.  

Given that efficiencies are improving as prices fall, if it’s a sustainable investment you are after, renewable energies are definitely worth a look.

Liam Kavanagh is founder and chief executive of Rockfire Capital