Solar shines brightest for renewables-keen investors

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
Institutional investors ranked uncertainty with energy prices as a top obstacle (Source: Karnakata Tata)

Institutional investors surveyed by the Octopus Group have ranked grid-scale solar power as their top deployment target, amid plans to inject US$210 billion in the broader renewable sector within five years.

A poll of 100 names published by the firm on Monday found 43% of those managing a portfolio of renewables were invested in solar, ahead of firms invested in onshore and offshore wind (28% each), hydropower (27%) and waste-to-energy and biomass (an aggregate 24%).

Of the respondents – a mix including pension funds, insurers and banks with US$6.8 trillion in combined assets under management – Australians (63%) were keenest on solar, followed by EMEA (58%), Asian (45%) and UK firms (29%).

The industry was the most sought-after also among firms currently not invested in renewables, although some appeared sceptical. Some 58% of those managing a renewables-free portfolio claimed to be considering solar plays, while 21% were not contemplating it and another 21% felt unsure.

Five years to unlock US$210 billion

Even as they singled out grid-scale solar as their top target, the polled investors promised to scale up allocations to all forms of renewables, with US$210 billion set to be deployed within five years.

Private banks appeared the most ambitious, sharing plans for renewables to represent 9.7% of their portfolios over the period. They were followed by strategic investors (8.9%) and pension funds (7.8%), while high-net-worth individuals and family offices (5.5%) and insurers (4.7%) were the most reluctant.  

The Octopus survey evidenced the renewables momentum won’t be challenge-free, though. Energy price uncertainty, liquidity challenges and skills shortages ranked as the top concerns for the polled investors, although costs and regulatory barriers were also seen as obstacles.

Europe before its subsidy-free hour

The Solar Finance and Investment conference held in London in late January identified investors as the key enablers of subsidy-free solar in Europe. Corporate PPAs and other emerging arrangements are easing – although not fully dispelling – investors’ unease around merchant risks and potentially low returns, it was argued.

The Octopus poll placed the continent as the most in-demand destination for renewables investors. Of the top 10 countries and region, only Australia (seventh) and Japan (10th) were non-European.

The survey produced a finding likely to be welcomed by subsidy-free players. Almost one-in-two institutional investors piling into clean energy worldwide was driven by stable cash flows (a driver for 48%) and attractive risk-adjusted returns (40%); only diversification and ESG considerations placed higher.

See here to read the full findings of the Octopus survey

Read Next

October 15, 2021
Doral Renewables has broken ground on the 1.65GWdc Mammoth Solar project in Indiana, set to be the US’ largest solar farm once complete.
October 15, 2021
European renewables investment management firm Greencoat Capital has confirmed its entry to the US renewables market and is plotting to invest up to US$5 billion over the next five years.
October 13, 2021
Calling for a three-fold increase in renewables investment in the next decade, the International Energy Agency’s (IEA) latest edition of its World Energy Outlook, published today, has been largely welcomed by analysts and industry observers, who are urging world leaders to respond accordingly at the COP26 Climate Change Conference.
October 13, 2021
EDF Renewables has targeted Vietnam’s solar market by investing in rooftop PV installer SkyX Solar, a subsidiary of investment management firm VinaCapital.
October 13, 2021
While solar PV and wind deployment will far outstrip additions from other electricity sources over the next decade, clean energy progress is still lagging behind what is needed to put global emissions into sustained decline towards net zero, the International Energy Agency (IEA) has warned.
October 13, 2021
Reliance New Energy Solar (RNES) has invested US$29 million in German wafer technology company NexWafe’s Series C financing round as it looks to establish wafer production facilities in India.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 19, 2021
Upcoming Webinars
November 10, 2021
8am (PST) | 5pm (CET)
Solar Media Events
December 1, 2021