€100 million have been invested into Solar21, the Irish renewable energy fund, for PV solar farms across Europe, focussing on economies with the most attractive long-term guaranteed FiT rates.
Pension investors are attracted to the secure environments created by 20-year sovereign guaranteed contracts which produce healthy and stable returns. They are typically investing, on average, between €100,000 to €250,000 and diversifying lump sums from conventional assets classes, such as equity and property. The concept appears to be receiving widespread approval from brokers and other investment advisers.
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Commenting on the success of the fund, Michael Bradley, CEO of Solar 21 Renewable Energy Ireland said, “When you contrast this stable investment environment with the current equity market volatility which has proven to be all risk and no return over the past 10 years, it's not difficult to see why so many people are drawn to the radically different solar energy investment concept. Many of those investing regard Solar 21 as a recovery plan for their pensions, believe that it may make up for the poor equity market returns over the past few years”.
“We anticipate growing the fund to €500 million over the next 18 months,” added Bradley.
The majority of Solar 21's funds are invested in photovoltaic solar farms to provide renewable energy to the German and Italian national grid backed by 20 year FiT agreements which are guaranteed by the EU and national governments.
The returns from the sales to the national grid are redistributed to the investor by way of a fixed 8.5pc annual coupon.
“People are so open to this new form of investment because it offers the type of investment security that is difficult to achieve elsewhere on the marketplace. It differs greatly from other more traditional investments such as equities, bonds or commodities in that it is not dependent upon some unknown future event in order to achieve a return. Solar Energy investment is not dependent on the healthy performance of economies or the financial markets to achieve a decent return. In essence, the volatility of the financial markets is completely removed”, said Bradley.